Uncertainty brought by U.S. President Donald Trump‘s threats of tariffs and his shape-shifting trade policies are starting to have a chilling effect across many industries, businesses warn, as consumers pull back on everything from basic goods to travel.

Trump’s back-and-forth tariff moves against major trading partners have kept businesses, consumers and companies on edge, prompting companies to warn they may have to raise prices, which could boost inflation and dent economic growth.

While Trump has said his policies could cause short-term pain, concerns about their economic fall-out intensified over the weekend after he declined to predict whether his economic policies would cause a recession.

On Monday, such fears fuelled a stock market sell-off that wiped nearly $5 trillion from the S&P 500’s peak last month, when Wall Street was cheering much of Trump’s agenda.

Speaking after the market close on Monday, Delta Air Lines CEO warned that economic worries among consumers and businesses were already hurting domestic travel.

“We saw companies start to pull back. Corporate spending started to stall,” CEO Ed Bastian told CNBC on Monday. “Consumers in a discretionary business do not like uncertainty.”

Cuts by Americans to discretionary spending knocked airline stocks on Tuesday and with each day, evidence is mounting across the corporate world that the chaotic implementation of Trump’s tariffs is translating into caution on Main Street.

Trump is expected to speak with around 100 CEOs at a regular meeting of the Business Roundtable in Washington, an influential group that includes bosses of major U.S. companies from Apple to JPMorgan Chase and Walmart. The Republican president met with technology company executives at the White House on Monday.

The latest round of Trump tariffs – 25% levies on imported steel and aluminium – kick in on Wednesday. 

The tariffs will apply to millions of tons of steel and aluminium imports from Canada, Brazil, Mexico, South Korea and other countries that had been entering the U.S. duty free under the carve-outs. 

Trump has vowed the tariffs will be applied “without exceptions or exemptions” in a move he hopes will aid the struggling U.S. industries.

On Tuesday, he said he was doubling the planned tariff on all steel and aluminium imports from Canada, bringing the total to 50%, in response to the province of Ontario imposing a 25% surcharge on electricity it exports to the United States. 

In a post on Truth Social, Trump also threatened to “substantially increase” tariffs on cars coming into the United States on April 2 “if other egregious, long time Tariffs are not likewise dropped by Canada.”

Ahead of these measures, a range of recent surveys of U.S. businesses and consumers have shown deteriorating sentiment, which, if sustained, could hamper investment and household spending. 
The National Federation of Independent Business – a Washington lobby group whose members staunchly supported Trump in the 2024 election – reported small business sentiment weakened for a third straight month, erasing the bump from Trump’s election victory.

“Uncertainty is high and rising on Main Street, and for many reasons,” said NFIB Chief Economist Bill Dunkelberg, without elaborating.

That followed Monday’s monthly New York Fed survey of consumer expectations showing households were growing more pessimistic about their financial prospects in the year ahead and a higher share of respondents expecting a rise in unemployment.

U.S. businesses broadly had greeted Trump’s election with optimism, fuelled by pledges of deregulation and tax cuts.

But Republicans in Congress have yet to agree on a plan that would allow them to cut taxes and instead are focused this week on averting a government shutdown when funding expires at midnight on Friday. 

Companies sensitive to shifts in consumer and business sentiment are sounding the alarm about slowing demand for household and industrial goods.

Germany’s Henkel, which makes Sellotape and Schwarzkopf hair products, said on Tuesday that Washington’s policies were hurting the U.S. market disproportionately. 

The company which also makes adhesives, currently sees a “reluctance” in terms of demand in the U.S. for both consumer and industrial segments, CEO Carsten Knobel told reporters.

It was too early to quantify a possible impact on its business as the situation remains volatile, he said.

Kohl’s Corp forecast profits below Wall Street estimates, as the U.S. department store chain grapples with uneven demand.

Larger rivals Macy’s and big-box retailers Walmart and Target have also tempered expectations as U.S. inflation risks rise and recession fears mount.

Telecom firm Verizon Communications’ shares fell after it said first-quarter growth will probably be “soft”.

Christian Schulz, deputy chief European economist at Citi, said growing fears about a U.S. recession will make life even harder for companies.

“Companies will have a tougher time in the short term to make investment decisions for the long term,” he said.