Following President Trump’s Liberation Day announcement of sweeping reciprocal tariffs, the world watched as markets convulsed, consumers recoiled, and economists scrambled to recalibrate. The stock market nosedived, crypto cratered, and within 48 hours, headlines were predicting a new era of economic instability—one whose ripple effects will be felt long beyond America’s borders.
Uncertainty Surges: A New High-Water Mark
The Global Economic Policy Uncertainty Index has now surpassed pandemic-era highs. In fact, only COVID-19 has triggered a similarly acute spike in unpredictability in more than 30 years. This is not merely a market story—this is a consumer story, a confidence story, and potentially a crisis story.
The Cost of Everything, the Burden on Everyone
Tariffs, by design, are meant to protect. In practice, they distort, and they have the potential to penalize. The prices of everyday essentials like coffee, bananas, toys, and toilet paper are projected to rise. While those increases haven’t hit shelves yet, our research shows 38% of consumers say they are concerned about rising prices.
This hurts all consumers, but it hits lower-income households hardest. These families feel the strain first and most acutely. Yet, higher-income households aren’t immune either. Consumer confidence had already been on the decline before Americans watched the value of their 401(k) retirement accounts and 529 college savings plans tumble. The result? Real fears of a ‘negative wealth effect,’ where consumers pull back spending as they feel financially diminished.
Wall Street in Shock, Main Street in Flux
The Federal Reserve Bank of Atlanta projected an economic slowdown in Q1 2025, and Wall Street revised its economic playbook almost overnight. Once predicting two interest rate cuts in 2025, some analysts now expect as many as four, betting that the Federal Reserve will be forced into stimulus mode to combat a rapidly cooling economy. As investors flee to safer ground, the 10-year Treasury yield has dropped, pulling mortgage rates down with it. Ironically, borrowing may become cheaper, but the broader economy may become far more fragile.
A World Watching—and Resisting
Globally, America’s unilateral tariff stance has not been well received. Anti-American sentiment is rising, threatening to isolate US firms and dampen international enthusiasm for American brands. What’s at stake is more than supply chains; it’s the global perception of ‘Brand America.’
Following Donald Trump’s re-election, our research showed half of Brits and Germans said visiting the US was less appealing, and that was before Liberation Day. Canadian travel to the US has plummeted by 70%. Consumers in many countries are looking for ways to boycott American goods. This reputational damage could reshape global trade relationships in unpredictable and possibly irreversible ways.
What Comes Next?
We are in uncharted waters. Trade wars rarely end cleanly, and economic nationalism, while politically potent, often leaves households holding the bill. For now, all eyes are on the consumer. Their confidence, behaviors, and resilience will determine how (and whether) the economy bends or breaks. Mintel will continue to monitor this evolving landscape. One thing is clear: this isn’t just a headline. It’s a household issue.
What Should Brands Do Now?
Brands can’t control geopolitics, but they can control how they respond. Remember what we learned from the pandemic—agility, empathy, and proactive communication? They remain more relevant than ever.
Lead with valueWith consumers concerned about rising prices, value becomes more important than ever. Whether through pricing strategies, promotional offers, or loyalty programs, brands have an opportunity to show up for consumers in meaningful ways. Now is the time to double down on affordable alternatives, bundled value, and budget-conscious innovations that help consumers feel in control of their finances.
Invest in innovation that resonatesFrom ‘Made in America’ messaging to flexible financing options, brands that align innovation with current consumer sentiment and economic reality will be better positioned for whatever comes next. Periods of uncertainty often present unexpected openings. Many iconic household brands were forged during economic downturns. Under the new administration, innovations that emphasize domestic sourcing, and economic resilience, or mitigate consumer risk, such as price guarantees or pay-over-time options, will strike a powerful chord.
Communicate clearly and confidently The pandemic taught brands the importance of proactive, transparent communication and responsiveness. Applying these lessons to support consumers now can help brands navigate current economic uncertainties more effectively. Clarity of message and empathy of tone will be critical to maintaining consumer confidence.
Scenario plan for prolonged painTariffs often take time to filter through supply chains. The bigger question: Is this a temporary shock, or the beginning of a longer stagflation cycle marked by rising unemployment and persistent inflation? Brands must prepare for any and all outcomes, building flexible strategies that can weather slower demand and shifting consumer behaviors. Scenario planning isn’t just a boardroom exercise; it’s a brand survival tool. The brands that think three moves ahead will be the ones still standing when the dust settles.
One More Thing—Why Clarity Matters
In moments like this, clarity matters more than certainty. Brands that stay close to their consumers by listening, adapting, and responding with empathy will not only endure this turbulence, but they’ll also emerge more trusted, relevant, and resilient than before.
Continue discovering more Mintel insights on this rapidly evolving landscape. Check out How Food and Drink Brands Can Soften the Impact of Trump’s Tariffs. Or, for a deeper dive into how CPG brands navigate these changes, read What a Trump Presidency Means for CPG Brands.
If you want to talk to a specialist in this space, contact us today!
