U.S. President Donald Trump dubbed it “Liberation Day” as he unveiled reciprocal tariffs on Wednesday, but the move risks political backlash and economic fallout if his ambitious promises to revive U.S. manufacturing and reshape global supply chains fall short, according to experts.

In the meantime, consumers are likely to see higher prices, the economy could enter a downturn, and allies will put their own levies on American products – effects that Trump has called a “disturbance” but that voters may not be willing to accept going into the midterm elections next year.

Trump’s Republicans control the House of Representatives and the Senate with narrow margins. Tariff-driven losses in the midterms could hand power of one or both chambers to opposition Democrats.

“He (Trump) has a high tolerance for pain, but it could turn into real pain at the ballot box (in) November 2026,” said Mike Dubke, a former communications director for the president during his first term. “The concern here is what point are we going to see the benefits that he and his advisers believe we’re going to reap? Because he’s only got 18 months before the midterms.”

Economists say tariffs translate to taxes on consumers, and a broad majority of Americans – 70%, including 62% of Republicans – believe that increased tariffs will drive up the price of groceries and other consumer goods, according to a Reuters/Ipsos poll.

About 53% of respondents to the poll agreed with the statement that increased tariffs would do more harm than good, while 31% disagreed. The rest were unsure or did not answer about the potential risks of Trump tariffs.

Just 31% of respondents agreed that U.S. workers come out ahead when the country charges tariffs on imported goods, while 48% disagreed.

“The principal risk is around the economy,” said Lanhee Chen, a fellow at the Hoover Institution and former adviser to Republican leaders Mitt Romney and Marco Rubio, referring to the tariffs.

“One is an immediate risk on prices and what that means for a president who was elected in part to bring prices down,” he said. Another is the potential for the economy to enter a recessionary phase, said Chen, who cautioned that describing the potential economic impact was speculative and expressed support for the use of tariffs as a public policy tool.

Trump promised as a presidential candidate to bring prices down, and voters’ concerns about inflation hurt his 2024 opponent, former Vice President Kamala Harris, the Democratic presidential nominee.

On Wednesday, Trump said tariffs ranging from 34% on Chinese goods, in addition to a 20% levy that has already been imposed, to 20% tariffs on goods from the European Union, would enrich U.S. coffers.

“Now it’s our turn to prosper, and in so doing use trillions and trillions of dollars to reduce our taxes and pay down our national debt, and it will all happen very quickly,” he said.
Tariffs are paid by importers, not foreign countries, and they typically pass along the extra costs to consumers.

Electoral Risk

Hints of dissatisfaction with Trump are beginning to show among Republicans.

Republican candidates won two special elections in Florida on Tuesday by much slimmer margins than Trump won the state last year. In Wisconsin, an important political swing state that Trump carried, a liberal candidate won a seat on the state’s Supreme Court in a repudiation of Trump and his billionaire adviser Elon Musk, who had backed her conservative rival.

The U.S. Senate on Wednesday passed legislation that would terminate new tariffs on Canada in a 51-48 vote that drew support from four Republicans. On Thursday, one of the four and a senior Democrat introduced legislation to rein in Trump’s ability to impose tariffs. Both measures are likely to fail in the House.

Trump’s tariff announcement sent U.S. and global stocks tumbling. The president largely dismissed that on Thursday.

“The markets are going to boom, the stock is going to boom, the country is going to boom, and the rest of the world wants to see is there any way they can make a deal,” he told reporters at the White House.

A broad decrease in stock markets would hurt Americans’ retirement savings 401k accounts.

“Liberation Day appears to be about liberating American businesses and consumers from their money,” said one former Republican congressional aide, who spoke on the condition of anonymity. “You can’t stop an aircraft carrier on a dime and you can’t completely reshape the global economy in a day.”

The White House, which blames inflation on former President Joe Biden, says the Trump administration is doing everything it can to bring down the cost of living and dismisses concerns about the political ramifications of his trade agenda.

“President Trump’s first and only concern is the welfare of the American people. His historic trade action … reflects his commitment to restoring American Greatness for our industries and workers – not to indulging mindless political hypotheticals,” said White House spokesman Kush Desai.

Biden, a Democrat, also sought to increase domestic manufacturing and production with three landmark laws that directed trillions of dollars toward rebuilding U.S. infrastructure and promoting investment in strategic sectors such as semiconductors, energy production and electric vehicles.

Democrats are likely to pound Republicans over the economic impact of the tariffs.

The healthy economy Trump inherited from Biden – growth came in at nearly 3% in 2024, with unemployment around 4% and inflation under 3% – is showing signs of fraying, although the “hard” data economists use to measure things such as gross domestic product and employment has shown little evidence of a near-term slowdown.

Still, surveys measuring confidence in the economic outlook among households and businesses have turned uniformly downward in the last two months since Trump began his drumbeat on tariffs, a stark reversal of the optimism that greeted his election in November.

“From a political risk standpoint, this is a really bad idea,” said Philip Luck, director of the economics program at the Center for Strategic and International Studies and a former deputy chief economist at the State Department under Biden, noting the chance of retaliation from U.S. trading partners.

Barbara Trish, a political science professor at Grinnell College in Iowa, said Trump faced significant anxiety among voters, but in the past had always been able to escape deeper criticism.

“How many times have observers legitimately thought, OK, this is the last straw, the Teflon is going to take a hit, and it hasn’t happened?” she said.

Small business owners gave mixed reviews.

In Baltimore, a historically Democratic city, Drew Greenblatt, owner of Marlin Steel, said Trump’s tariffs were already helping boost orders as customers shift to American-made products.

But Michelle Lim Warner, the owner of DCanter wine boutique in Washington, D.C., was more pessimistic. European wines make up two-thirds of her selection, she said. “Who is going to pay $75 for what was a $25 bottle of wine?”

(With inputs from Reuters)