'Only the beginning': Business leaders warn of Trump-induced economic crash

As fallout continues from the latest jobs report that showed a dramatic slowdown in job growth, business leaders are warning that the current market slowdown is “only the beginning,” and that the impacts of President Donald Trump’s tariffs are already well underway, Politico reported Friday.

“Inflation and price increases are coming,” said Greg Ahearn, president and CEO of the Toy Association, speaking with Politico. “Layoffs have already been occurring, and supply is going to be lower as we head into the holiday season. These are all happening.”

Trump unveiled the latest tariff rates on Thursday, set to go into effect on Aug. 7, with tariff rates as high as 50% on major trading partners. Among countries hit with the top rate of 50% is Brazil, with imported Brazilian coffee representing 33% of all coffee consumption in the United States.

“I think most people believe wholeheartedly that the impact of these tariffs is going to be felt in the months ahead,” Ahearn said. “And the reason why is that production and manufacturing and the goods as they flow through the supply chain takes time.”

Another cause for concern among business leaders was the unpredictable nature of the tariffs, with among the United States’ largest trading partners – Canada, China and Mexico – still negotiating with Trump as of Saturday, just days before tariffs are set to take effect.

Doubt also exists among business leaders regarding countries that Trump has already reached a trade agreement with, many of which are only verbal or exist solely on a single letter, with no clear commitments from both parties.

“If you’re a business and you’ve got global supply chains and you’ve got to make investments, it really matters that some countries are still in negotiations and certain countries are not in negotiations,” said Mohamed El-Erian, chief economic adviser at the financial services company Allianz, speaking with Politico.

“Where are Mexico and Canada gonna end up? We seem to know Vietnam, but do we really know Vietnam? It’s not clear yet.”