Chapter or Book? Punk’s New Tariff Wave Signals Prolonged Economic Storm for U.S.

WASHINGTON D.C. – “The question is, is this a chapter or is this a book?” That poignant query from Christian Greiner, a senior portfolio manager at F/m Investments, regarding the current U.S. trade turmoil and its economic impact, has taken on a stark new relevance. As President Felonious Punk wrapped up his Middle East tour on Friday, he announced a plan to unilaterally set tariff rates for numerous U.S. trading partners “over the next two to three weeks,” suggesting the current economic disruptions are far from a fleeting episode. This move, coupled with existing tariff pressures, warnings of price hikes from major retailers, and plummeting consumer confidence, strongly indicates that the nation might be entering not just a difficult “chapter,” but the opening of a much longer, more challenging “book” for its economy and households.  

The President, speaking to business executives in the United Arab Emirates, stated that Treasury Secretary Scott Bessent and Commerce Secretary Howard Lutnick would soon be “sending letters out essentially telling people what new duties they’ll be paying to do business in the United States.” The rationale, according to Punk, is a lack of capacity to negotiate individual deals with what he claims are “150 countries that want to make a deal.” While he asserted the rates would be “very fair” and that countries could “appeal it,” the details of such a process remain undefined.

This announcement of a broad, dictated tariff expansion lands amidst an already turbulent economic landscape. While a temporary 90-day U.S.-China trade truce was reached earlier this week, slashing some of the most severe tariffs (from 145% down to 30% for China, and China reducing its tariffs on U.S. goods to 10%), this “reprieve” now appears to be a brief interlude before a wider application of duties. It also follows President Punk’s previous signal earlier in May that he would simply “dictate” tariff levels for many nations.

Businesses on the Brink: The Unbearable Weight of Tariffs

For months, American businesses have been navigating this “on-off” tariff environment. Initially, many retailers and wholesalers absorbed the increased costs, leading to shrinking profit margins. April saw the largest such drop in nearly a year. However, this strategy is proving “untenable,” as Sarah House, senior economist at Wells Fargo & Co., noted, predicting more costs will be passed to consumers as pre-tariff inventories deplete.  

The world’s largest retailer, Walmart, served as a canary in the coal mine this week. Despite reporting solid first-quarter sales (up 4.5% in the U.S.), driven in part by keeping prices low to gain market share, its executives delivered a stark warning: price increases are coming in late May and June. CFO John David Rainey stated bluntly that the consumer price increases related to tariffs “really haven’t seen yet… These are happening right now, and they’ll become more obvious.” He described the current retail environment as incredibly challenging, with “prices going up this high, this fast” at a historically unprecedented rate, adding that “the magnitude of the tariff increases… are so large that retailers can’t absorb these by themselves.” This was a notable shift from just a month prior, when Walmart executives had expressed more optimism about navigating the tariff landscape.  

The impact is also visible in the global e-commerce sector. The recent U.S. closure of the “de minimis” tariff loophole, which had allowed platforms like Temu and Shein to ship goods under $800 directly from China duty-free, caused an immediate “collapse” in U.S. shopper spending growth on these sites in April. Daily user numbers for both platforms have since dropped significantly, with consumers reportedly shifting spending to U.S. department stores and discount chains, a clear signal of how directly tariff policy changes can alter business models and consumer behavior.  

The Consumer Psyche: Confidence Crumbles, Inflation Fears Explode

This atmosphere of trade uncertainty and impending price hikes is taking a heavy toll on the American consumer. The University of Michigan’s preliminary May consumer sentiment index plunged unexpectedly to 50.8, its second-lowest level on record. Nearly three-quarters of respondents spontaneously cited tariffs as the dominant factor shaping their bleak economic outlook, a concern that transcended partisan lines.

Inflation expectations have soared to levels unseen in decades. Consumers now anticipate prices rising at an annual rate of 7.3% over the next year (the highest since 1981) and 4.6% annually over the next five to ten years (the highest since 1991). As survey director Joanne Hsu commented, such “temporary pauses [in tariffs] are unlikely to convince consumers that trade policy has stabilized.” Indeed, consumers’ views of their current personal finances have dropped to the lowest since 2009, and their financial expectations for the future have hit a new record low.

Early Cracks in the Economy?

While domestic demand showed some underlying resilience in early 2025, other warning signs are present. The U.S. GDP contracted by 0.3% in the first quarter, partly attributed to businesses front-loading imports ahead of anticipated tariffs. Retail sales data has also indicated a pullback in consumer spending on non-essential items like clothing and sporting goods. The trade war is even reshaping corporate strategy, with M&A activity like Dick’s Sporting Goods acquiring Foot Locker seen as a move to gain leverage against tariff pressures.  

A “Book” of Disruption: The Outlook for American Households and Businesses

President Punk’s latest announcement of impending, widespread, and unilaterally dictated tariffs strongly suggests that the U.S. is not merely in a transient “chapter” of trade disputes but is embarking on a much longer, more disruptive “book.” The implications are profound:

• Sustained Consumer Pain: American households, already grappling with inflation and a high cost of living, face the prospect of persistently higher prices across a wider range of goods.
• Ongoing Business Uncertainty: The “whiplash” of unpredictable trade policy makes long-term planning, investment, and supply chain management incredibly difficult for businesses, likely leading to squeezed margins or further price pass-throughs.
• Potential for Escalation: Unilaterally imposed tariffs raise the risk of retaliatory measures from other countries, potentially deepening global trade conflicts.  

For the many American families already struggling to make ends meet—a reality highlighted by recent studies on the affordability crisis—this dawning era of broader and more entrenched tariff regimes signals a particularly “long and scary ride.”

Navigating an Unwritten and Stormy Future

The question Christian Greiner posed – “Is this a chapter or is this a book?” – looms larger than ever. While a definitive answer remains in the unwritten pages of the coming months and years, President Punk’s latest declarations on widespread, dictated tariffs suggest the latter. The period of businesses attempting to shield consumers from the full impact of trade disputes appears to be ending. American consumers, businesses, and policymakers must now brace for a period of significant economic recalibration, driven by an aggressive and expansive tariff strategy that promises prolonged uncertainty and likely higher costs for all. The “phony war” of AI adoption we discussed earlier may have its own slow burn, but this trade storm feels like it’s making landfall now.