U.S. consumers are starting to cut down on their spending in anticipation of absorbing price increases resulting from President Donald Trump's tariff strategy. Surveys indicate that people are becoming more concerned about inflation and unemployment, and are considering reducing both essential and optional purchases if tariffs lead to inflation. Consumer spending plays a crucial role in the U.S. economic growth, and a slowdown in spending could raise the risk of a recession.

President Trump's tariffs are already influencing how individuals allocate their money, indicating potential challenges for the economy down the line. There is growing evidence that consumers are tightening their financial belts in response to expectations of price hikes on various imports due to tariffs. Recent data reports from the Bureau of Economic Analysis suggest that U.S. households scaled back on services spending while increasing purchases of goods in February, hinting that people may be rushing to buy before tariffs take effect.

A recent survey conducted by the University of Michigan shows that expectations for future inflation are at their highest since 2022, and concerns about unemployment are at their highest since the Great Recession. This signals that households might be preparing to cut back on their shopping. Economists are becoming more wary of the impact of Trump's fluctuating tariff policies on the economy, as consumers facing higher prices may reduce their spending.

Households are planning substantial spending reductions on essential and discretionary items if tariffs lead to inflation, based on a recent survey by Morning Consult. Across income groups, a significant portion of respondents expressed intentions to cut back on groceries, dining out, and clothing. The rise in inflation concerns and financial vulnerability among U.S. consumers could change the trajectory of consumer spending compared to previous shocks like the pandemic or previous tariff introductions by President Trump.

The anticipated higher cost of living due to Trump's import taxes is expected to be passed along to consumers by merchants. Additionally, reduced competition from imports could enable U.S.-based companies to raise their own prices, as projected by several economists.