Counter/Consensus: Trump's Tariff Pump Fake, Anti-American Sentiment in the Americas, and Softening Russian Consumer Sentiment

1. U.S. Tariffs (Consensus)

This analysis is the latest in a series on U.S. consumers’ reactions to the Trump tariffs, including analysis of price sensitivity by product category, consumers’ systematic underestimation of tariff-related costs and how political views interact with support for tariffs. See our latest analysis here, including our assessment of corporate narratives most likely to resonate with consumers.

Tariff pump fake. Last Friday, the Trump administration reiterated its intention to place 25% tariffs on Canada and Mexico and 10% tariffs on China on Feb. 4, causing a scramble among politicians and businesspeople alike to prepare for them and assess their impact. U.S. consumers were spooked, with many convinced the tariffs would hurt their household finances as our U.S. consumer confidence index dropped sharply.

Consumers were highly aware of the forthcoming tariffs, and said they were most likely to blame the Trump administration for any price increases related to their imposition. At the same time, however, 3 in 10 consumers said they would hold U.S. companies responsible for tariff-related inflation. 

Taken together, Americans’ attitudes pose clear risks for consumer-facing U.S. brands. In a nutshell: U.S. consumers are paying attention to the tariffs, expect them to increase household expenses, have done little to prepare for them financially, and are somewhat willing to blame U.S. companies for the fallout.

The China tariffs went into effect on Tuesday, Feb. 4, while the tariffs on Mexico and Canada were put on hold after negotiations in which the Trump administration claimed the United States’ North American neighbors agreed to take steps to stem the flow of migrants and fentanyl into the United States. 

But we’re skeptical this will be the end of Trump’s tariff tirade. Companies wargaming around future tariff risks should consult our latest research on the issue for concrete corporate messaging and strategy guidance.

2. Western Hemisphere (Consensus)

Unneighborly behavior. Mexico’s first president and erstwhile dictator Porfirio Díaz famously lamented that Mexico was unfortunate to be “so far from God, and so close to the United States.” That is a refrain that much of the Western Hemisphere may currently be echoing. 

In the first few weeks of his already eventful presidency, Trump has ruffled feathers worldwide, but his American neighbors have come in for particular attention. 

In response to images of Colombian migrants bound hand and foot and escorted by military personnel while awaiting deportation, Colombian President Gustavo Petro declared in late January that Colombia would not accept two military deportation flights from the United States. In response, President Donald Trump threatened to impose a 25% tariff on all Colombian imports, escalating to 50% if the situation was not resolved within a week. Facing the prospect of significant economic sanctions, Petro reversed his decision, agreeing to accept the deported migrants. The brief spat between two media savvy populists was thus concluded. 

But although Petro’s twitter rant about pre-Colombian goldsmiths was unfocused and hyperbolic, his insistence that the Colombian people felt a lack of basic respect is borne out in our data showing a huge drop in favorability of the United States among the otherwise very pro-American Colombian public.

Meanwhile, over the weekend Trump made good on threats to impose 25% tariffs on Canada and Mexico (see item #3 below). But even before implementation, the blunderbuss approach had both countries’ populations turning from net positive to net negative views of their North American partner.  

Even the publics in some countries which have not yet run afoul of Trump’s tariff-happy approach to international negotiations are looking askance at the United States. Brazil, another highly polarized country which had a January 6th style event in its capital, has seen public favorability toward the United States drop off sharply.

Trump’s focus on regional issues — the Panama Canal, questioning Canadian sovereignty and demanding control over Greenland — and his willingness to throw U.S. weight around with Western Hemisphere allies rather than just global adversaries hearkens back to the Monroe Doctrine. This long-standing pillar of U.S. foreign policy essentially held that the United States had an exclusive “sphere of influence” over the Americas. Our data shows that whatever else it may be accomplishing, the approach is certainly stoking anti-American sentiment in the Western Hemisphere in the short run.

And while countries like Colombia won’t have much choice in caving to Trump’s demands, the sense that the United States has become a less reliable partner in general will encourage Latin American leaders to look further afield for commercial partners over the longer term, posing future risks to U.S. business interests. A case in point is the fast-tracked Mexico-E.U. deal and the acceleration of E.U.-Mercosur discussions. If the region’s countries simultaneously look to deepen economic ties with U.S. adversaries like China, that will have the opposite effect of the goal of the original Monroe Doctrine in establishing U.S. regional dominance. 

3. Russia (Counter)

Shaken confidence. Russian consumer confidence has stopped climbing for the first time since the full-scale invasion of Ukraine began in February 2022. After an initial drop, consumer confidence began riding an upward trend on the back of a surprisingly durable rally round the flag effect. Beyond that, Russia’s economy appeared to weather sanctions quite well, finding alternative oil markets and using backdoors to import needed consumer and intermediate goods. 

At the end of 2023, however, allies took a bigger step in tightening up sanctions compliance by authorizing the sanctioning of foreign financial institutions found to be facilitating sanctions evasion. The Kremlin has confirmed this has caused “certain problems,” and experts believe the Russian war economy is under increased strain. The ruble’s fall in late 2024 was the most obvious sign of such.

Since April 2024, our daily consumer confidence index in Russia has begun to show signs of softening. At nine months, this is now the most prolonged period of stagnant consumer confidence since the war began, while still being well above the pre-war baseline. 

Breaking out Russian consumer confidence into its constituent components reveals a more complex picture. When Russia invaded Ukraine, consumer perceptions of current conditions dropped and stayed lower longer, while long-term expectations for business conditions immediately improved and kept climbing. In short, consumers felt short term pain but expected long term gain. 

The data shows they are still waiting, with long-term expectations — the highest component series of the overall consumer confidence index — holding relatively steady. Meanwhile, shorter term expectations and current conditions have dropped slightly in recent months. While not precipitous, it shows that consumers may finally be feeling a personal pinch as the war drags near its third anniversary.

Answering the question of whether the sanctions are “working” would require a clear articulation of the sanctions’ end-game, which we do not have. However, if they are beginning to hit Russian consumers on the margins, they could constitute a more valuable bargaining chip at the table of any future ceasefire negotiations. 

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