Recession odds are rising as Trump’s trade war escalates, Goldman Sachs says.

The US economy faces a growing risk of a recession as surging tariffs threaten to stunt growth, reignite inflation and lift unemployment, according to Goldman Sachs.

The Wall Street bank warned clients in March that it now sees a 35% chance of a recession in the next 12 months, up from 20% previously.  Goldman Sachs also increased its inflation estimate, slashed its 2025 GDP forecast to just 1% and bumped up its year-end unemployment rate outlook by 0.3 percentage points to 4.5%.

Market Close as of April 10th, 2025

This story was originally published in BeyondKona on March 29, 2025 …

Bloomberg reported last week that US consumer confidence fell this month by the most since August 2021 on concerns about the outlook for the broader economy, adding to a growing stack of indicators that uncertainty over President Donald Trump’s policies has Americans increasingly worried about their economic future.

Consumer confidence fell to its lowest level since January 2021. This marks a continuation of a downward trend that began after the December 2024 election. The Conference Board survey highlights increasing concerns about inflation and a potential economic downturn, resembling stagflation. Expectations for income, business, and labor market conditions also dropped to a 12-year low

Rising inflation and tariffs are key factors driving pessimism among Americans. A CBS News poll revealed that 67% of participants expressed concerns about the economy. The sharp decline in consumer confidence since Trump took office and has raised recession fears among economists.  University of Michigan Consumer Sentiment Index reflects a dropped to 57.0 in March, down from 64.7 in February and 80.4 a year ago. This marks a monthly decline of 11.9% and an annual drop of 28.2%, indicating worsening sentiment regarding personal finances and business conditions

The drop in confidence was broad across age groups and incomes.

Consumers were more pessimistic about current and future labor-market conditions as well as the outlook for incomes and business conditions. Perceptions of present and future financial situations worsened and the share of respondents expecting a recession in the next year rose to a nine-month high.

That pessimism has Americans cutting back their spending: According to a new study from Wells Fargo, more than half of consumers are delaying major life plans due to uncertainty over the economy and the consequences of Trump’s tariff threats. layoffs and chaos in cutting federal agencies impacting most Americans.

American consumers confidence in Trump policies continue to retreat: Consumers surveyed this week stated;

• a third said they were putting off buying a home
• one in six have postponed education plans, and
• one in eight have pushed back retirement plans

President Donald Trump signaled tariffs on American’s former NAFTA trading partners Mexican and Canadian imports will go ahead and he’s also stepping up pressure on other traditional trading partners and allies, adding to inflation pressures and threat of a global trade war.

Several factors contributed to this downturn in consumer sentiment:

1. Inflation fears: Consumers expressed increased worry about persistent inflation, with expectations for higher prices in the coming years.

2. Disruptions and widespread layoffs in Federal agencies by Trump administration: actions ranging from the threat of agency shut downs to benefit cutbacks in healthcare, amplifying financial concerns of most American pocketbooks, directly and indirectly.

3. Trade policy uncertainty: There is growing apprehension regarding President Donald Trump’s stringent tariff policies and their potential impact on the economy and consumers pocketbooks

4. Labor market concerns: Consumers became more pessimistic about future employment prospects, with this pessimism reaching a ten-month high

5. Income outlook: Americans reported feeling less optimistic about their future income prospects

Trump signed a proclamation earlier this week to implement a 25% tariff on auto imports and pledged harsher punishment on the EU and Canada if they join forces against the US, expanding a trade war and triggering threats of retaliation.   “What we’re going to be doing is a 25% tariff on all cars that are not 100% made in the United States,” Trump said at the White House on Wednesday as he pushed ahead with a program seeking to bring more manufacturing jobs to the US.

Hours later, Trump suggested further tariffs would be imposed on the European Union and Canada if they worked together “to do economic harm” to the US. The reaction in currency markets including the euro and Canadian dollar was muted. Taken together, Trump’s escalating trade actions appear likely to deepen tensions with key trading partners even before his promised so-called reciprocal tariffs on April 2.

Key Impacts on Hawaii’s Economy

Federal Funding Cuts and Layoffs

• Trump’s administration has implemented sweeping federal funding cuts and layoffs, which could result in the loss of approximately 2,200 federal jobs in Hawaii. These layoffs are expected to offset growth in construction and other sectors, contributing to stagnant job growth in 2025, and minimal growth in 2026.

• Federal grant rescissions have already affected projects like wildfire mitigation efforts in Waikōloa Village, further straining local initiatives.

Tariffs and Rising Costs

• New tariffs include a 10% levy on Chinese imports and a pending 25% tariff on steel and aluminum. These measures are increasing uncertainty and driving up costs for materials like aluminum and steel, which are critical for construction projects.

• Tariff-related price hikes could deter new development projects as contractors face unpredictable cost pressures.

Tourism Decline

• Trade wars linked to Trump’s tariffs have weakened international economies, leading to reduced visitor arrivals from key markets like Canada. Canadian visitors to Hawaii dropped significantly in 2024, impacting spending and overall tourism revenue.

• Additional travel restrictions for federal employees have also hurt Hawaii’s hospitality sector, leaving hotel rooms empty unexpectedly.

Inflation and Consumer Behavior

• Tariffs are expected to raise prices on goods and services, potentially causing mainland U.S. consumers to cut back on luxury spending like long-haul travel to Hawaii. This could further dampen tourism, a cornerstone of Hawaii’s economy

• Inflationary pressures from tariffs are compounded by external factors like the bird flu, which has driven up poultry and egg prices nationwide.

Construction Sector Challenges

• While construction remains a bright spot due to ongoing federal contracts, tariffs and potential labor shortages caused by deportations may push costs higher. Uncertainty surrounding future projects could slow long-term growth in this sector.

Vehicle Sales

• Hawaii’s auto industry is experiencing declining sales, with optimism for recovery in 2025 dampened by tariff-related uncertainties affecting consumer confidence.

Overall, Trump’s tariff policies, combined with federal funding cuts and immigration measures, are creating headwinds for Hawaii’s economy. These factors threaten job stability, increase costs across industries, and weaken key sectors like tourism and construction. Economists warn that these challenges could lead to a recession or significantly slower growth over the next few years

One of the key talking points of the 2024 election results (often repeated by Republicans and President Trump) and justification for the political rollercoaster ride the nation has experienced since Trump and the GOP took control of all three branches of government last month, goes like this … President Trump has an election mandate. A more truthful statement in this case would be …winner takes all.

The 2024 election results favoring Donald Trump were anything but a national mandate for Trump or his party claim. The 2024 election results favoring Trump produce a winner with less than 50% of the vote, and less than a 1.6% percent majority of the popular vote — hardly a national mandate, but enough votes to squeak across the finish line and onto the presidency.

As president, Trump can and does anything he likes with no political repercussions, so far at least. The daily chaos of his administration is simply following Steve Bannon’s election playbook; if you win… “flood the zone”.

Trump and his agents of chaos have indeed flooded the zone with executive orders without much consequential forthought.  Voters on both side of the political fence generally agree that government (and the private sector) can both benefit from less waste, greater efficiency, and operate with lower costs where possible.

The claims of vast fraud exists throughout key Federal agencies – an allegation without substance is one totally false, and otherwise unfounded.  But, it is still a repeated taking point of Trump and his minions without supporting facts to back up such wild claims, yet some believe it to be true true because they have told it is so.

Somewhere lost in translation is any consideration towards greater accountability in governance.  The very thing America’s founding fathers had in mind freeing the Country from the rule of King George III, and transforming the American colonies into a Democracy governed by its people, free of tyranny, and English taxes.

Project 2025 – the Trump Administration’s Disruptive Playbook

In the 21st century, America has been and remains the global leader in ending the tyranny represented by dictatorships since the end of Second World War and in advancing the international rule-of-law through freedom and democratic reforms. America’s leadership was not limited to addressing the global challenges following the end WWII.

For nearly 80 years, the USA has taken the lead role in advancing global stability and democracy.  America’s 2024 national election was less a turning point, and more (as some have describe it) a fork in the road. In Trump’s case, that fork in road is an opportunity to remake America into his image, following the Project 2025 playbook written by the far-right think tank; the Heritage Foundation.

Most Americans have not read the foundation’s playbook written for Trump and his party. But Project 2025, since Trump and his administration were sworn into office has been the GOP’s script for remaking America in “their image”. More than an outline, “Project 2025” is today’s GOP roadmap.

The Project 2025 Presidential Transition Project was a well-funded (eight-figure) effort published by the Heritage Foundation with more than 100 organizations participating in a future vision of an America with the most anti-democratic presidential administration in modern times. It is mandate and call to take swift, far-right actions that would cut wages for working people, dismantle environmental, climate, and social safety net programs, and to redefine the way our society operates.

Popular national policies and trends supporting the current national and global transition into a clean energy economy are to be sweep away, beginning with Trump’s very first national policy statement upon being sworn to the nation, drill-baby-drill (for oil and gas) with the promise to roll-back America’s back to it unfettered hey days of the 19th and 20th centuries.

Trump was merely following the Project 2025 playbook on energy, which is to roll back the clock on climate science and clean energy technologies, increase oil and gas profit subsidies and turning America into the next Saudi Arabia.  Not factored in this energy policy of abandon are the public costs of such an about face on climate science and pollution abatement technologies. It is an energy policy of which will be measured in many impactful ways beyond the direct social and climate costs of a cheaper gallon of gas, and greater profits for an industry with little regard to the impacts of their outdated energy business practices.

Trump in the following the Project 2025 script, recently appointed fossil fuel CEO Chris Wright appointed as Energy Secretary, who vows to “unleash” US fossil fuel development at a scale not seen since the 1920’s. As energy secretary, Wright is expected to promote President Trump’s efforts to achieve U.S. “energy dominance” through dirty energy dominance lead by the United States, and at a global scale.

The Project 2025 playbook further calls for President Trump to not only roll-back progress, it calls for the eventual demise of key Federal agencies responsible for protecting and reporting on escalating climate threats to the nation and the planet, while protecting Americans health from the social impacts of pollution and industrial-linked diseases.   The Project 2025 playbook specifically targets key Federal agencies responsible for the economic and social welfare of the nation.  One example closer to home is NOAA (National Oceanographic and Atmospheric Administration).

NOAA plays a critical role in helping Hawaii, and the nation understand the effects of human behavior on the world’s oceans and atmosphere.  NOAA issues “daily weather forecasts,” “severe storm warnings,” and more. It also monitors and reports on climate changes, manages fisheries, restores coastal environments, and supports marine commerce. According to NOAA, the agency’s “products and services support economic vitality and affect more than one-third of America’s gross domestic product.

Project 2025’s policy agenda would also trade the federal government’s vast institutional knowledge and forward momentum on climate solutions for dangerous climate denialism and obstructionism. These policy proposals threaten America’s role as a leader in the global clean energy transition, supported by Inflation Reduction Act investments that have ignited job creation and economic growth in communities across the world

For details on Project 2025, BeyondKona recommends reading and referring to : https://democracyforward.org/wp-content/uploads/2024/06/2024-05_Peoples-Guide-Pro-2025.pdf  

One final thought …

As Trump and his team — most notably Elon Musk — run roughshod over legal and ethical boundaries, it’s been hard not to notice how unprepared the Federal government system is prepared for the internal threat now unfolding in Washington D.C.

One would in fact be justified in assuming that Trump’s failures to comply with the law might trigger no repercussions whatsoever, just as they didn’t during his first term in office and largely didn’t during his interregnum.

Presently, significant questions remain unanswered.  Who will police the new president and his loyalist political party in complete control of all branches of government in 2025?  Barring an outbreak of self-respect at the Capitol, the answers are unsatisfying.

There are the courts, though that path tends to be slow and deliberative, and depends on respect for the courts’ authority, something Trump has demonstrated repeatedly he does not have respect for any legal system which challenges his actions.

America has also repeatedly demonstrated over history a surprising ability to self-correct itself in times of national challenge — now is certainly one of those times…

Hawaii’s economic dependency and recent relationship with the U.S. federal government

Hawaii historically received significant federal aid, loans, and financial assistance. The state has received billions in new federal funding for various programs and initiatives udinr the Biden administration, but has changed with the election.

Here are some, not all, specific examples of recent and anticipated Federal funding rollbacks impacting Hawaii’s economy, now in jeopardy with a new administration with very different national priorities:

2023 Federal dollars flowing to Hawaii in the form of economic support

1. Homelessness Assistance: $4 billion was allocated nationwide, with Hawaii receiving a portion of this funding.
2. Small Business Loans: The U.S. Small Business Administration provided more than $151.2 million in federal disaster loans for Hawaii businesses impacted by the Maui wildfires.
3. Homeowner and Renter Assistance: More than $244.7 million was provided to homeowners and renters to help them rebuild and recover from the Maui wildfires.
4. Maui Wildfire Recovery: FEMA and federal partners were on track to provide approximately $3 billion towards Maui wildfire recovery.
5. State and Local Government Support: In fiscal year 2021, Hawaii received about $6.2 billion in federal transfers to state and local governments, which likely continued or increased in 2023.
6. Unemployment Benefits: $808,419,350 was allocated for repayment of a U.S. Department of Treasury loan to pay for unemployment benefits.
7. Disaster Declaration Funding: Following the August 2023 wildfires, President Biden approved a disaster declaration, making federal funding available for temporary housing, home repairs, and other recovery efforts.

While the exact total for 2023 is not provided in the search results, these figures indicate that Hawaii received several billion dollars in federal aid, loans, and financial assistance throughout the year.

2024 Federal dollars flowing to Hawaii in the form of economic support

The new federal funding will support several specific projects in Hawaii:

1. Broadband Connectivity: A $72 million grant from the Biden-Harris Administration will expand broadband connectivity on Hawaiian home lands, bringing high-speed internet to thousands of DHHL lessees throughout the state.
2. Coastal Resilience Projects: Over $8 million in grant funding will support projects on Oahu, Maui, and Molokai, including:
   • Tipu Tipu Restoration and Sustainability ($3.1 million) to implement nature-based practices for sediment erosion prevention.
   • Department of Land and Natural Resources ($1.67 million) to protect and restore native vegetation.
   • Healthy Climate Communities ($1 million) to restore 5 acres of land with 2,000 native trees in the Puu O Ehu watershed.
   • Hawaii Department of Transportation ($1 million) to engage Oahu communities on resilience needs for coastal highways and communities.
3. Affordable Housing Infrastructure: A $6.6 million federal grant will be used to design infrastructure for high-density residential areas on neighbor islands, including around public housing on Maui and the Big Island.
4. Community Health Centers: A projected $1.3 million increase in funding for Hawaii’s 14 federally-qualified community health centers2.
5. Native Hawaiian Education and Community Development: $5 million for Native Hawaiian-serving institutions and $1 million for non-profit organizations supporting Native Hawaiian communities.
6. Energy Transitions Initiative: $15 million (shared with Puerto Rico) to help remote and island communities design clean energy and resilience solutions.
7. Ocean Carbon Removal Research: A portion of $10 million nationwide funding for research into biological processes like using kelp or algae to manage carbon emissions.

The above 2023-24 federally funded projects through the previous Biden Administration were designed to address and improve Hawaii’s infrastructure, housing, healthcare, education, and environmental resilience across the state.

The future of Federal funding as exemplified by the previous Biden administration remain in doubt under the Trump administration, and certainly did not fit within the Project 2025 profile for qualified Federal priorities.

Yes, today (Monday, January 20, 2025) is a nation holiday, but not for the reasons some may think or mistakenly assign it to the Presidential Inauguration ceremony of the newly ratified 47th president of the United States, Donald Trump.  Instead it is a national holiday honoring Martin Luther King Jr.

For Donald Trump his inauguration today and return to the Presidency was an act of retribution and validation not traditionally associated with Presidential Inaugurations.

 The 47th president’s 29-minute address on Monday, just after noon ET, painted a familiar Trump theme of a country in disarray, one seized by “years of a radical and corrupt establishment,” with the pillars of society “broken and seemingly in complete disrepair.”  Trump went on to say that America “cannot manage even a simple crisis at home, while at the same time stumbling into a continuing catalog of catastrophic events abroad.”

The reality counter-balance to the newly inaugurated President’s rant was its misleading and incomplete assessment of a country that has had under the previous leadership (President Biden) a growing economy, falling inflation, slowing illegal immigration, a record-breaking stock market, the lowest levels of violent crime in years, a revolutionary national clean energy policy advancing the County’s energy economy, lowering of consumer energy prices at home, and a military that has limited engagement in conflicts around the world.

Trump’s message to the Country earlier today went to the core of his political appeal: convincing his supporters that he — and he alone — can fix what ails (or does not ail) the country. And it represented a reprise of how he framed his first presidency — as a constant fight against enemies, foreign and domestic.

“My recent election is a mandate to completely and totally reverse a horrible betrayal and all of these many betrayals that have taken place and to give the people back their faith, their wealth, their democracy and, indeed, their freedom from this,” President Donald Trump told the Country on Monday, and what proved to be the longest inaugural address in modern history.  “America’s decline is over,” he declared.

Eight years ago, Mr. Trump described “mothers and children trapped in poverty in our inner cities,” “rusted-out factories scattered like tombstones across the landscape of our nation,” schools that teach students nothing, and “the crime and the gangs and the drugs that have stolen too many lives and robbed our country of so much unrealized potential.”

In Monday’s inaugural address Trump was more prescriptive and detailed as he ticked off a variety of policy goals that he said he intended to achieve.  “The entire nation is rapidly unifying behind our agenda,” he said on Monday, “with dramatic increases in support from virtually every element of our society, young and old, men and women, African Americans, Hispanic Americans, Asian Americans, urban, suburban, rural.”

National Mandate?

“Very importantly,” Trump added, “…we had a powerful win in all seven swing states and the popular vote. We won by millions of people.”  Donald J. Trump (Republican) won 77,284,118 votes, which accounted for 49.8% of the total votes cast, the second-highest vote total in U.S. history, only behind Joe Biden’s (Democratic) 2020 vote result was still higher in the number of votes than Trump received in 2020 vote count, and lost to Biden.

Biden’s 2020 presidential garnered 306 electoral votes and 81,283,098 popular votes, accounting for 51.3% of the votes cast. Trump’s 2024 results neither merit the popular myth Republicans and Trump himself often cite as justification of a so-called sweeping agenda that his election in 2024 enabled and a landslide for him resulting a national mandate for his agenda.

The 2024 United States presidential election results did not reflect a national mandate, in spite of Republicans statements. The election did produce an outcome of Republican control of the Senate, and the narrowest of margin in the House resulting in complete party control of both congressional bodies as the 2025 legislative session begin.

Donald Trump (Republican) won the presidency with in 2024 with:

• 77,296,195 popular votes (49.8%)

Kamala Harris (Democratic) lost less than 1.5% of the total vote:

• 75,004,726 popular votes (48.3%)

Energy Markets React to Trump’s Inauguration Speech — a big oil win

“Companies involved in oil and gas exploration, and extraction stand to gain as U.S. environmental safeguards and a national climate policy are dismantled and replaced by increases in national fossil fuel investments and greater taxpayer subsidies supporting dirty energy interests”, Reuters reported.

The White House also declared on Monday that President Trump would withdraw the United States from the Paris Agreement, the global pact among nations coordinating the fight to slow planetary climate change.  

 By withdrawing from the accord, the United States will join Iran, Libya and Yemen as the only four countries not party to the agreement, under which nations work together to keep global warming below levels that could lead to to environmental catastrophe.  The move, one of several energy-related announcements in the hours immediately following Trump’s inauguration, represents an about-face in United States participation in the global climate agreement and future negotiations.

 During his first term Mr. Trump withdrew from the Paris accord, but then President Biden quickly rejoined in 2020 after winning the White House. Scientists, activists and Democratic officials assailed the move as one that would deepen the climate crisis and backfire on American workers.

 Coupled with Mr. Trump’s other energy measures on Monday, withdrawal from the pact signals his administration’s determination to double down on fossil-fuel extraction and production, and to move away from clean-energy technologies including electric vehicles,  solar power, wind turbines, and other successful clean energy options now addressing global warming and other fossil fuel impacts…

Editorial

The Heritage Foundation’s total revenue in 2022 was over $106 million USD ($106,329,524).  As a non-profit, Heritage is not required by law to disclose all of its donors. Needless to say the Heritage foundation is politically powerful, financially powerful, and certainly influential with an audience of ideologically far-right supporters.

The organization’s most recent policy accomplishment is its political roadmap for Donald Trump and other Republican candidates of the 2024 election cycle entitled Project 2025.

Candidate Trump and many GOP party’s candidates for Federal office view Project 2025 as their guide or bible to policy.  What makes Project 2025 significant is the level of GOP attention and support garnered for the 920 page manifesto, with little intellectual engagement and investigation into to the public effects and assumptions contained within the document.

Overall, Project 2025 advocates a significant reduction and elimination of state and federal public and environmental protections. The manifesto effectively calls for the elimination of climate change mitigation policies and regulations.   The plan further targets environmental science and protections of Federal agencies currently charged with enforcement and management by e.g.,

• Abolishing the National Oceanic and Atmospheric Administration (NOAA)
• Reducing and eliminating federally-funded climate research efforts
• Downsizing the Environmental Protection Agency (EPA) with the goal of creating an operational state of ineffectiveness by eliminating and-or reducing both the agency’s effectiveness and ability to engage in enforcement activities supported by science and research, both essential the agency’s environmental protection mission.

Project 2025 further calls for increased government support of the fossil fuel industrial sector — a common theme throughout the foundation’s 2025 policy manifesto, and today’s Republican party at large.

Project 2025 is also a playbook calling for the wholesale retrenchment from a national climate policy and public protections. It is a retreat from policies supporting a national transformation into a clean energy economy, and the defunding of key government programs design to protect the public interest and health.

Project 2025 further ignores the reality of a global race to a net zero, and as the world advances, the need for the United States to lead by example in the global effort to reduce the harms of climate change.

Last year, the US alone saw a record 28 climate disasters that cost $1 billion or more while this year, searing heat waves and massive wildfires have delivered and offer a peek at an increasingly climate-dangerous future, unless the world adapts to changes already in the pipeline.  The world’s climate is changing and it will continue to change as we continue to emit more greenhouse gas emissions and pollutants.

President Biden’s signature climate and energy law, the 2022 Inflation Reduction Act (IRA), is fueling the growth of a unprecedented national clean energy transition. One which has been enabling the adoption of zero emissions and renewable wind and solar energy sources, battery storage, and other clean technologies reducing local and global emissions along with consumer energy costs.

The IRA is already lowering consumer costs in both the electric utility and ground transportation sectors of our economy — and that’s just the beginning of the IRA’s public and planetary benefits with a multiplier effect in the decades to come.

The threat Project 2025, if adopted, poses to clean energy is important to the economy of Hawaii, and the United States in whole, and by extension, the future in addressing a world of warming climate impacts.

Project 2025 is little more than a how-to guide to repealing the IRA’s policy pathway to a national clean-energy economy benefiting most, if not all Americans. Its adoption will represent a significant step backwards in saving a planet on which all humankind depends, regardless of political beliefs.