White House Deputy Chief of Staff Stephen Miller and press secretary Karoline Leavitt speak to reporters at the White House briefing on May 1, 2025. (Photo by Ashley Murray/States Newsroom)

WASHINGTON — Despite news that the U.S. economy has contracted since January, White House Deputy Chief of Staff Stephen Miller said Thursday that President Donald Trump’s policies are working to “unleash this era of American prosperity.”

Miller, also a top adviser for Trump on immigration, dismissed fears from the small business community and American consumers when pressed by reporters during the final in a series of press briefings marking Trump’s first 100 days.

Questions centered on Trump’s steep 145% tariffs on any goods, including manufacturing parts, imported from China, as well as baseline 10% tariffs on products brought into the U.S. from nearly every other country.

Tariffs are an import tax paid to the U.S. government by American companies and individuals who purchase goods from abroad. A broad consensus among economists is that those costs are passed to consumers.

When asked what the administration’s end goal is for its trade war with China — the nation now charges 125% tariffs on American products entering its borders — Miller said “we need to have a trade relationship with China that does not do harm to our nation’s economic and national security.”

“At the same time, tariffs will bring significant revenue into this country that will allow us to pursue our dramatic plan of tax cuts and reforms,” he said, referring to the massive budget reconciliation package underway in the Republican-led House and Senate.

Tariff order, then a pause

Trump initially triggered much higher rates on products from major trading partners — for example, 20% on European Union goods and up to 46% on products from Vietnam — but paused them for 90 days at a baseline 10% after investor panic erased trillions from the U.S. stock market. The administration maintains it will have new trade agreements in place by the July deadline.

The Institute for Supply Management’s April manufacturing report cited tariff concerns and an “unknown economic environment” for the manufacturing sector’s second month of contraction.

Department of Commerce figures released Wednesday showed the U.S. gross domestic product — a country’s total value of goods and services — decreased at an annual rate of 0.3% since January, the first time GDP dipped into the negative since the first quarter of 2022.

Meanwhile, U.S. consumer sentiment saw its steepest percentage decline over a three-month period since the 1990 recession, according to the University of Michigan’s April survey of consumers.

Tax plans

In response to an inquiry about a U.S. Chamber of Commerce plea for small business tariff relief, Miller said Thursday, “The relief for small businesses is going to come in the form of the largest tax cut in American history.”

At the heart of congressional Republicans’ massive budget reconciliation package is the extension of Trump’s 2017 tax law. Wholesale extending the 2017 Tax Cuts and Jobs Act is expected to reduce federal revenue by roughly $4.5 trillion over a decade. And, depending on how or if lawmakers pay for the tax cuts, the costs could shrink the economy in the long run, according to the Committee for a Responsible Federal Budget’s analysis of Congressional Budget Office figures.

Miller said Trump’s promise to businesses to revive and expand 100% expensing for business investments in the U.S. will make it “the most pro-small business tax bill in American history.”

House and Senate Republican leaders have indicated differing timelines for final passage of the tax deal — varying from Memorial Day to July 4.

Business community worries

An April 30 letter from the Chamber of Commerce to the administration warned of “irreparable harm” to small businesses, even if the administration strikes new tariff agreements over the next weeks or months.

“The Chamber is hearing from small business owners every day who are seeing their ability to survive endangered by the recent increase in tariff rates,” the letter stated.

Three Republican senators broke with the GOP Wednesday night and voted to rebuke Trump on tariffs. The largely symbolic measure ultimately failed after Republican opposition.

Treasury Secretary Scott Bessent told reporters Tuesday the administration is in conversations with 17 trading partners but would not give any details on talks with China.

Economists are now awaiting Friday’s “all-important” jobs report for any further snapshot of U.S. economic health, as Mark Zandi of Moody’s Analytics wrote Sunday on X.

“If payroll jobs increase by 150k, give or take, which is the consensus, all the weak economic data released during the week will be forgotten, at least for a bit. Fingers crossed. If employment increases by less than 100k, watch out,” he wrote.

An engineer works at a cargo port storage yard. Tariffs imposed by President Donald Trump have generated uncertainty about the economy for many businesses and consumers, according to economic forecasters. (Photo by Vithun Khamsong/Getty Images)

Over a buffet lunch Wednesday, a roomful of bankers got a mixed picture of the national economy in the short term. For Wisconsin, the longer term outlook appears more certain, although there may be little comfort from that.

Speaking at an economic forecast luncheon hosted by the Wisconsin Bankers Association and the news outlet WisBusiness, part of WisPolitcs.com, Dale Knapp, director of research at Forward Analytics, reviewed the persistent demographic slump that has put Wisconsin on a troubling trajectory for the coming decades.

That trajectory has been evident already for some 20 years, Knapp said, and it centers on the population bulge from baby boomers — people born between 1946 and 1964. That generation was 65% more numerous than the group born in the previous 19-year period, he said. And the subsequent generations have been about 20% smaller in number or even less.

The baby boom produced an explosion of demand for everything from toys to homes to schools and universities, Knapp observed. Now the last of that generation is passing into retirement, and with smaller populations in the generations that follow there are “worker shortages all across the state,” Knapp said.

Between 2020 and 2040, the working age population, ages 18 to 64, is projected to fall by 15% on average in all but six Wisconsin counties, Knapp said. Automation may pick up the slack in some industries, including manufacturing and possibly fast food service, he suggested.

Immigration is another remedy, Knapp said — but also “a challenge given what’s going on in the White House now.”

“We need to fix the border problem to a degree,” Knapp said. “If you do that, then maybe you can get the two parties in Washington together and say, ‘OK, we need to fix legal immigration by expanding it.'”

Knapp’s other proffered solution is to invest funds to offer families $16,000 to move to Wisconsin from out of state. With 3,000 families a year, the money could be repaid with the added income and sales tax revenues, “and we could fund it forever,” he said.

National economic uncertainty

Outlining the current state of the nation’s pocketbook and its near-term forecast, economist Andrea Sorensen of US Bank in Minneapolis said that the economy “is actually doing probably better than most people think.”

That’s despite the uncertainty that has ballooned since President Donald Trump took office in January, she said. That uncertainty also looms over the horizon, however.

The nation’s Gross Domestic Product (GDP) — the broadest measure of the overall economy — has been growing by more than 2% over the last couple of years through the end of 2024.

Data issued Wednesday morning showed GDP shrank 0.3% in the first quarter. Sorensen said that was for an unusual reason, however.

U.S. businesses stocked up on goods from overseas to get ahead of the tariffs Trump imposed after taking office, she said. She attributed the slight first-quarter dip to those imports, because their value is subtracted from GDP.

The GDP estimate released Wednesday is the first of three that will be produced for the quarter, and Sorensen said her economic team believes the next two estimates will be better.

She views other indicators as relatively favorable.

The national labor market remains strong. Month-to-month employment growth has cooled some since the hiring spikes that followed the economic crash from the COVID-19 pandemic.  Still, “we still consider it to be quite healthy,” she said.

“People who have jobs have money to spend,” Sorensen said. “So as long as the labor market is holding up, we think the economy could be OK.”

Consumer spending also remains strong, she said, even though surveys show dramatic declines in both consumer and business confidence.

“We know it means people are not happy and they don’t have high hopes,” Sorensen said. “But if we’re talking recession, that sort of depressed sentiment needs to translate into actual economic activity. And so far, it hasn’t. And we’re not actually sure if it will.”

Tariffs are a wild card

The Trump administration’s tariff policies, however, remain a major wild card.

A broad 10% tax on imports that took effect April 5 remains in place with a few exceptions. Tariffs of up to 50% on about 60 countries are on a 90-day pause. An active tariff remains on goods from China — initially 125% and more recently raised to 145%.

Overall that’s netted out to a U.S. effective tariff rate — the net tariff on all imports from other countries — between 25% and 30%. That’s 10 times the effective tariff rate of 2.5% a year ago.

“This hasn’t happened in over 100 years,” Sorensen said. “The economy is just structurally very different, and we can try to make forecasts and comparisons —  and we do all day every day —  but we don’t know. There is just so much unknown what this will do.”

For that reason, economic uncertainty is “sky high,” she continued. “I don’t think anyone really knows what’s going on.”

Businesses “are kind of paralyzed,” Sorensen said. “How can you make a business investment decision if you have no idea what tariffs are going to be tomorrow, next week, next year?”

Some larger employers have already begun announcing plans to reshore work in the U.S. But Sorensen said in response to one audience member’s question that isn’t an option for many smaller employers.

A company that sources products overseas might gain a temporary advantage by returning production to the U.S., she said.

“They can’t risk making the wrong choice,” however, Sorensen said. “What we’re hearing is they don’t trust that that tariff will remain in place. So, they can’t make the investment decisions to bring production back to the U.S. because they might want to undo it again as soon as policy changes.”

In addition, “our supply chains are so intertwined that everything has some input that’s imported,” she said.

Tariffs will also squeeze low- and middle-income households, where spending takes a larger share of their earnings — “households that were already struggling,” Sorensen said.

Migration presents another pressure point. Policies to reduce immigration and deport immigrants will hurt some states and some sectors of the economy more than others, she said.

Yet an additional unknown is how the escalating trade conflicts with the rest of the world will affect services — where the U.S. has a trade surplus.

“President Trump has never mentioned that, because he probably doesn’t want us to know that, right? It makes trade look a little more fair, but that’s not the story he wants,” Sorensen said.

So far, other countries haven’t targeted U.S. services in retaliation for the tariffs it has imposed.

Nevertheless, “if countries really want to get us economically, they would go after services,” Sorensen said.

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Sen. Rand Paul, R-Ky., speaks during a nomination hearing with the Senate Committee on Homeland Security and Governmental Affairs on Capitol Hill on April 03, 2025, in Washington, D.C.  Paul was the sole GOP co-sponsor on Wednesday, April 30, 2025, of a resolution to terminate President Donald Trump's tariffs. (Photo by Anna Moneymaker/Getty Images)

WASHINGTON — Senate Republicans defended President Donald Trump’s emergency tariffs Wednesday, blocking a largely symbolic measure to terminate the president’s import taxes that have shocked the economy.

The resolution failed in a tied 49-49 vote Wednesday evening. Vice President J.D. Vance broke the tie on a subsequent procedural vote to stop the measure from receiving another chance on the floor.

Republicans Susan Collins of Maine, Lisa Murkowski of Alaska and Rand Paul of Kentucky were the only three to break with their party in support of reining in Trump’s use of emergency powers to trigger tariffs on nearly every other nation across the globe.

Paul was the lone Republican co-sponsor on the Senate resolution, which was likely to go nowhere under House Republican leadership.

Sen. Sheldon Whitehouse, a Rhode Island Democrat, and Kentucky Republican Mitch McConnell missed the vote. Earlier in April McConnell joined Collins and Murkowski in voting to halt Trump’s tariffs on Canada.

‘Devastating’ economic news

The vote came hours after the release of figures showing the U.S. economy shrank during the first quarter of 2025. 

“The devastating economic news we got this morning should be enough for senators to vote yes tonight. The only winner today is China, which is scooping up markets and allies Donald Trump has left in the dust,” Democratic Sen. Ron Wyden of Oregon said on the floor just before the vote.

Wyden and Paul co-sponsored the resolution that aimed to block Trump’s “Liberation Day” tariffs announced April 2 that caused market upheaval.

The president’s shockingly high taxes on goods imported from some of the nation’s closest trading partners — 20% on the European Union, 24% on Japan, 46% on Vietnam — rocked global markets, erasing trillions in wealth. Trump triggered the levies by declaring foreign trade as a national emergency.

Trump announced a 90-day pause on the tariffs starting April 9, but left in place a 10% universal import tax on nearly every country across the globe — excluding China.

The White House is now in an all-out trade war with the world’s no. 2 economy, raising tariffs on Chinese goods to 145%. China stopped at a 125% levy on American goods.

Kaine warning

Democratic Sen. Tim Kaine, who also co-sponsored the resolution, told reporters on a press call Wednesday that he’s willing to “link arms” with Trump to fight what the U.S. views as China’s unfair trade practices, but he said Trump needs to “wake up and smell the coffee” on the damage to relationships with trading partners.

“When you put tariffs on allies what you do is push away the very nations you could be joining with to counter China,” the Virginia Democrat said.

Kaine also blamed Trump’s trade policy for Wednesday’s negative economic headlines.

The Bureau of Economic Analysis report showed the U.S. gross domestic product decreased at an annual rate of 0.3% in the first three months of this year.

“It’s the wrong economic strategy to turn the strongest economy in the world to one that has red flashing lights on it,” Kaine said.

Kaine said he believed some House Republicans would support the resolution but that “leadership has bottled it up.”

Trump blames Biden

Trump’s administration officials and his allies in Congress continue to defend the tariffs. The president himself blames former President Joe Biden for the economic “hangover,” as he described it in his Truth Social post Wednesday.

“This will take a while, has NOTHING TO DO WITH TARIFFS, only that he left us with bad numbers, but when the boom begins, it will be like no other. BE PATIENT!!!,” Trump wrote.

Senate Majority Leader John Thune similarly told reporters on Capitol Hill Wednesday that economic reports are “short term.”

“They measure it sort of day by day, month by month, quarter by quarter. And as I said yesterday, I think that with the tariff issue that they’re playing the long game, but we’ll see,” the South Dakota Republican said.

Treasury Secretary Scott Bessent defended Trump’s import taxes Tuesday from the White House briefing room, but also announced the administration’s reprieve on 25% taxes on foreign cars and auto parts.

Senate Minority Leader Chuck Schumer slammed the vote Wednesday night.

“Leader Thune and Senate Republicans tonight voted to keep the Trump tariff-tax in place. They own the Trump tariffs and higher costs on America’s middle-class families,” the New York Democrat said in a statement.

Foreign-made semiconductors are facing scrutiny and tariffs by the Trump administration, which would cause a ripple effect for manufacturing and price of most electronic goods, experts say. (Photo by Narumon Bowonkitwanchai/Getty Images)

The price of technology goods and services in the U.S. will likely rise in the next few months, experts say, as the White House continues to shift its strategy on tariffs for imported electronic hardware.

After initial reports that Chinese goods would receive as high as a 145% tariff, President Donald Trump said on April 13 that electronics like smartphones, computers and semiconductors — chips that process, power and transmit information — would be exempt. But Trump said later that day that imported semiconductors, and the electronics they’re embedded in, will likely be facing their own tariff structure in the coming weeks.

In tandem with Trump’s announcement, the U.S. Department of Commerce announced an official investigation into semiconductor imports, aiming to study the national security implications of importing manufacturing equipment and derivative products. The move is likely two-fold, tech experts say — Trump’s aim with foreign tariffs is to pressure American manufacturers to make more goods in U.S. facilities.

But his administration is also likely looking for cybersecurity risks that could be introduced through foreign manufacturing, like in compromised operating systems, embedded malicious code, or flawed designs, said Derek Lemke, senior vice president of product level intelligence at risk management firm Exiger.

“They power everything from advanced weapons systems and critical infrastructure to smartphones and laptops,” Lemke said. “Many of these components are manufactured abroad, often in regions with rising geopolitical tensions or limited transparency into supply chain practices.”

The U.S. is currently upping its manufacturing of semiconductors. It produced about 10% of the world’s semiconductors in 2022, and is projected to reach 14% by 2032 with the additional funding and infrastructure provided by the CHIPS and Science Act, passed during the Biden administration. But while many advanced chips are designed by American companies like Nvidia, Apple, Qualcomm and AMD, they are manufactured in Taiwan, which is currently negotiating tariff deals with the U.S.

Many electronics involve manufacturing processes from all over the world, making the tariff structure involved a complicated one. And while it’s a good idea for Americans to manufacture more of their semiconductors to diversify the global supply chain of chips, the country is nowhere near prepared to make as many as we need, said Nikolas Guggenberger, an assistant professor of law with a focus on antitrust, law and technology, privacy, and regulation at The University of Houston Law Center.

Guggenberger called semiconductor manufacturing “among the most complex industrial processes on Earth,” which would require years of planning, training and billions in investment for the U.S. to become a leader.

While the U.S. awaits more clarity over tariffs on electronic goods and the findings of the semiconductor probe, Guggenberger and Lemke say that American consumers should prepare themselves for higher prices on smartphones, laptops and other personal devices. Because semiconductors are used in so many everyday products, those price hikes could seep into wider spending, Guggenberger said.

“From a computer to everyday devices, like a garage opener, or a toaster,” he said. “It’s everything, it’s absolutely everything.”

Guggenberger said there’s a possibility that very high tariffs could also lead to a pause or slowdown in manufacturing in general, meaning consumers may see emptier shelves or a backlog on products in a few months.

Those on the software side of the tech industry will feel the effects, too, Lemke said. Software companies, AI developers and cybersecurity experts all rely on computing power from chip hardware, and disruption in the supply chain could slow innovation in these businesses, he said.

Even just the discussion of tariffs is having a ripple effect through the tech sector, Lemke said. Companies are having to evaluate their supply chains, their sourcing and maybe stockpile some components to their products.

“The uncertainty alone is enough to influence pricing, procurement strategies and investment decisions across the tech ecosystem,” Lemke said.