Trump’s approval rating has never recovered since his Liberation Day tariffs, polls show

President Trump’s approval fell to a second-term low of 37% in an NBC News Decision Desk poll, with 63% disapproving, while AP-NORC showed his economy approval down to 30% from 38% in March. Two-thirds of respondents disapproved of his handling of inflation and the Iran conflict, and more than half blamed him a lot for higher gas prices. The article links the slide to Liberation Day tariffs and notes the Supreme Court struck them down in February, adding political pressure around trade policy and inflation.

Analysis

This is less a one-day sentiment shock than a slow-moving policy premium unwind. The key market implication is that tariff-driven inflation expectations are becoming politically toxic just as the administration needs room to defend trade measures, which raises the probability of selective rollback, exemptions, or delayed enforcement rather than a clean reversal. That matters because the second-order winner is not necessarily “free trade” broadly, but firms with the loudest lobbying power and the cleanest domestic supply chains that can secure carve-outs while competitors remain exposed.

The more important investment channel is positioning around inflation persistence and consumer sentiment, not the headline approval number. If tariffs remain a political liability, the White House has incentive to shift from broad-based protectionism to narrower, theater-heavy enforcement, which would compress volatility in goods inflation but leave input-cost pressure intact for importers and low-margin retailers. Energy is a separate pressure point: elevated gasoline dissatisfaction can feed into broader anti-incumbent sentiment quickly, making any renewed tariff escalation more market-sensitive around headline CPI prints and consumer discretionary guidance.

The contrarian read is that the market may be overestimating the durability of current trade-policy rhetoric. A politically wounded president often becomes more tactical, not less aggressive, but he tends to target symbolic wins rather than economically maximizing policy; that usually favors volatility over a straight-line inflation shock. In practice, the biggest risk is a sequence of mini-announcements and retaliatory headlines over the next 1-3 months, which can keep supply-chain names discounted even if the final policy outcome is milder than feared.

Key Decisions for Investors

• Buy short-dated upside volatility in import-sensitive retailers via XRT or AMZN 1-3 month call spreads; the setup is for headline-driven gaps rather than a clean trend, so defined-risk convexity is preferable.
• Short the most tariff-exposed low-margin consumer names against domestic winners: pair short FND/WMT-adjacent import-heavy exposure versus long SHW or CAT on a 2-4 month horizon, betting that carve-outs favor companies with domestic production leverage.
• Add to duration-sensitive rate beneficiaries only on tariff escalation spikes: use TLT call spreads or IEF calls around policy headlines, since any relief in goods inflation would support the front end and steepen the curve less than consensus expects.
• Avoid chasing broad industrial shorts; instead target specific import-dependent sub-industries where gross margin compression is easiest to model. The cleaner expression is short an ETF basket of discretionary importers versus long domestic manufacturers with pricing power.
• Set a tactical alert for any tariff exemption/rollback announcement and fade the immediate move in consumer inflation hedges; a political de-escalation would likely be a 2-6 week catalyst for a sharp mean reversion in beneficiaries of the inflation trade.