Judging from email and social media, my last column, which revised my 2025 economic forecast in light of President Trump’s tariffs, seems to have angered a lot of folks.

I’m sorry, but Trump has pushed the U.S. into an economic downturn that will be especially hurtful to Hoosiers. The numbers make that clear. So, if you are among the 37% of Americans who approve of Trump’s economic policies (see https://www.reuters.com/world/us/americans-sour-trumps-handling-economy-reutersipsos-poll-finds-2025-04-23/), this column is for you.

As of Jan. 1, Hoosier factory owners could have expected to pay $2.8 billion in total taxes this year. Then Trump introduced new tariffs April 2, which he labeled Liberation Day. Those tariffs exploded taxes on factory owners to $22.4 billion.

To put that in context, Indiana’s total state general fund for this fiscal year is in the $20.1 billion range.

The good news for businesses—and it is hardly good news—is that most of those taxes will be passed onto consumers. The Yale Budget Lab estimated the 2025 effect would be equivalent to roughly $4,600 of income for the average family. That’s like a wage cut of 5.8%.

That is a recession, a deep recession.

On April 9, which I label Bond Market Freakout Day, Trump changed his tariff policy on 189 out of 193 countries. He dropped all but Chinese tariffs to 10%, raising China’s to 145%. That changed the tax rate on Hoosier businesses from 18.7% of GDP to 18.8% of GDP—a virtual wash that had no effect on consumers.

That is still a deep recession.

By the first week of May, seaborne transport to the U.S. from China virtually stopped. We buy and sell more than 16 million TEUs (20-foot shipping containers) with China. Nearly all of them travel by truck at some point. The end of that container traffic alone accounts for 325,000 truck driver jobs in the U.S.

Trump singlehandedly fixed the alleged truck driver shortage in just a few weeks—by slashing demand.

By early May, every forward-looking indicator of the real economy was flashing bright red. Trump had taken a solid economy, the strongest in the developed world and which had grown consistently since COVID-19, into a downturn.

Almost 2,000 economists signed an open letter criticizing these tariffs (see https://anti-tariff.org/signatures/#co-signers). This list included people from across the political spectrum, from Libertarian Nobel Laureates to former heads of the Council of Economic Advisors for both Democratic and GOP presidents, to university professors hailing from the Ivy League, Hillsdale College and Liberty University.

The only economist I’ve ever read or heard of who favors tariffs is Peter Navarro, the Democratic congressional candidate-turned-Trumpist, who serves as Trump’s senior counselor for trade and manufacturing. Navarro is perhaps best known for inventing a pro-tariff businessman—Ron Vera—to provide fabricated quotes for books (see https://www.npr.org/2019/10/18/771396016/white-house-adviser-peter-navarro-calls-fictional-alter-ego-an-inside-joke/).

Apparently, Trump got the message that tariffs are pushing the economy into recession and will cut family incomes, leave millions unemployed and cripple his already low popularity. That gave us Capitulation Day.

Trump on May 12 announced tariffs on China would be cut to 30% for 90 days. That is a major reduction—except that there’s a nearly 200-page list of items with an additional 25% remaining on them (see https://ustr.gov/issue-areas/enforcement/section-301-investigations/tariff-actions/). So, for most manufactured inputs, the effective Chinese tariff rates are at 55%.

Trump’s caving on these tariff rates brings the taxes on Hoosier businesses down to 11.9% of GDP—still a fourfold increase from January totaling $14 billion.

Let me go over that again. Trump just raised taxes on Indiana manufacturing firms by 400%, from $2.8 billion to $14 billion.

That leads to recession.

In the coming months, consumers will feel heavy losses due to this tax increase. The Yale Budget Lab estimates the new tariff formula costs families an average of $2,500 for items they were going to buy this year.

Businesses will need to plan for erratic tariff changes. For example, is it wise to purchase inventory for Halloween—which if ordered today will arrive in late August—when the tariff might be anywhere from 0% to 145%?

Everything from cars and RVs to Halloween costumes to auto and home insurance will be more expensive. None of this will be accompanied by a manufacturing renaissance, but rather job losses across most sectors.

All Trump had to do in 2025 to claim a record year of factory production was to have let well enough alone. He blew it, and two-thirds of Americans know that. Pointing out the imbecility of his tariff policies is not Trump Derangement Syndrome. That diagnosis is best left for those who think this guy is going to deliver prosperity.