President Donald Trump campaigned on a promise to cure what he said was an ailing U.S. economy. Little more than a month into his second term, he’s starting to hint that the treatment might hurt.

The administration is still lavishing Americans with visions of a golden age to come. Yet in the course of a madcap week – which saw a flurry of tariffs and reversals, sparking a global trade war and a sharp stock-market decline – the tone changed a bit.

“There’ll be a little disturbance, but we’re OK with that,” Trump told Congress on Tuesday, defending his plans to throw up a protectionist barrier around the U.S. with the biggest tariff increases in almost a century. By Friday, Treasury Secretary Scott Bessent was arguing that the world’s biggest economy needed some “detox” to wean it off dependence on public spending.

As Trump barrels forward with his agenda, he’s facing some cold realities that didn’t look so troublesome not long ago. Inflation won’t be easy to quell, especially as the president is determined to pile on new tariffs even as he walks back some of the early ones. Consumers and investors are getting anxious, and the economy appears vulnerable to a slowdown.

A president who once measured his performance by the stock market is now brushing aside such worries. Hours before his address to Congress, the S&P 500 Index hit a post-election low as Trump’s threats of trade wars with Canada and Mexico turned into reality. It closed even lower on Friday. Treasury bonds declined on the week too, though a drop in oil prices – holding out hope for cheaper gasoline – was a brighter spot.

‘Not even looking’

Trump’s message is that any short-term pain will be worth it to bring manufacturing back to the country. “I’m not even looking at the market, because long term, the United States will be very strong with what’s happening here,” he said at the White House Thursday.

“It’s going to take an adjustment period for folks on Wall Street,” said EJ Antoni, a research fellow at the conservative Heritage Foundation. “The sky is not falling just because we implement tariffs.”

Bessent said earlier in the week that the administration’s focus was not on Wall Street, but on main street. There, the big economic data release of the week — Friday’s jobs report — offered a mixed picture. Payrolls increased by 151,000, solid enough, but a little below estimates, while unemployment ticked up to 4.1%.

Trump, who’s empowered Elon Musk with recommending job cuts in the federal bureaucracy, pointed to higher factory employment in the February report. “The labor market’s going to be fantastic, but it’s going to have high-paying manufacturing jobs, as opposed to government jobs,” the president said.

Kevin Hassett, director of the White House’s National Economic Council, said next steps in the administration’s economic program would push the gains further. “We’ve got to pass the tax cuts and get the deregulation train rolling,” he told Bloomberg Television on Friday. “We’re going to be reducing government employment and reducing government spending, and increasing manufacturing employment.”

Still, there are plenty of signs that American industry — from small firms to giants like Ford Motor Co. — is worried about the trade war. That’s poised to escalate if trade partners retaliate, as they’re threatening to do, with their own duties that will hurt U.S. exporters. The mounting uncertainty may not encourage hiring or investment.

Trump initially pledged tariffs on Canada, Mexico and China in February, but then deferred the ones on the U.S. neighbors. This week, he let the deadline pass and imposed 25% duties on Canada and Mexico, before rushing to offer exemptions, first to the auto industry and then to all trade conducted under the USMCA deal he brokered in his first term. Trump also doubled the China tariff rate to 20%.

‘Probably get kicked out’

Few industries face a bigger shift than autos, and their reprieve came after bosses from the Big Three carmakers appealed to Trump. But he only gave them a month to rearrange supply chains across North America that have been years in the making. What’s more, Trump warned further delays were unlikely, even though auto companies are about to get hammered by a wave of other measures, too.

Aides are downplaying hopes. “He really doesn’t like the word exemption,” Hassett told reporters Friday. “If I walk in and offer an exemption, then I’ll probably get kicked out of the office. We’ll see how it goes.”

Next up for the auto firms and other industries is the 25% charge on steel and aluminum that’s scheduled to begin March 12 and will rattle supply chains once again. April is when the most sweeping measures are supposed to take effect. One set is the so-called “reciprocal tariffs,” which the U.S. will impose on all countries, at a rate deemed equivalent to their own trade barriers. The other will single out specific products, from automobiles and semiconductors to lumber and copper.

‘The great fleecing’

Trump’s frenzied trade campaign may be distracting Americans from other policies in the pipeline that will disproportionately help the wealthy, according to Heather Boushey, who served in the Biden administration on the Council of Economic Advisers. She cited Republican efforts to renew tax cuts and reduce the workforces and spending at government agencies.

“It is pure chaos and I worry every day that the chaos is aimed to distract us from the great fleecing of America,” Boushey said. “They have a very clear plan that will require cutting support for Medicaid and other really important programs.”

Alongside spending cuts, Trump is on the hunt for new revenues to offset tax cuts, and tariffs are part of the plan. “The president believes if we can replace income tax revenue with tariff revenue, we can make everybody better off,” Hassett said.

All this sets the stage for another showdown in a month’s time that will again test appetites – among consumers, businesses and investors — for a more wide-ranging trade war.

A Harris poll taken for Bloomberg News last month found that almost 60% of US adults expect Trump’s tariffs will lead to higher prices, and that 44% believe the levies are likely to be bad for the U.S. economy. Tariffs also have come up a record 700 times during quarterly earnings calls for S&P 500 companies, according to a Bloomberg analysis of transcripts.

One thing that could dispel some of the mounting economic angst would be lower interest rates, but Federal Reserve officials have indicated they’re not likely to move for some time. They want more confirmation that inflation is on track to come down to their 2% goal – and more time to evaluate how Trump’s policies will affect the economy.

At a New York event on Friday, Fed Chair Jerome Powell — who’s been careful to remain noncommittal on that topic until more hard data comes in — said the economy was basically in good shape, but acknowledged “elevated levels of uncertainty,” especially around trade.

Powell’s description of what the Fed is doing right now may resonate for many Americans, after a roller coaster week. “As we parse the incoming information,” he said, “we are focused on separating the signal from the noise.”

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(With assistance from Jonathan Ferro and Jenny Leonard.)

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