Roaring back to life.

That Trump’s steel tariffs failed should be no surprise. As I wrote in March 2018, the industry’s woes have little to do with imports. The tariffs allowed U.S. steel-makers a short-term price hike — long enough for Trump to boast repeatedly that steel was “coming back” (“like never before!”) and to invent a false claim that U.S. Steel was “opening up six major facilities” — before things returned to where they were before. Actually, worse: The tariffs probably cost U.S. producers long-term market share.

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This jarring disconnect between Trump’s fictitious boasts and a grim reality is beginning to repeat itself elsewhere. The house of cards that is the Trump economy is collapsing. This isn’t to say a recession is imminent; the business cycle responds to animal spirits that are not easily predicted. The stock market has been rallying — not because the economy is booming but because investors expect the Federal Reserve to fight growing weakness with rate cuts. The underlying health of the economy is deteriorating.

Of particular note is the yawning gap between consumer confidence (quite rosy) and executives’ outlook. Perhaps the public has been swayed by Trump’s P.T. Barnum routine, but business leaders see a more troubling reality.

The Duke University survey of chief financial officers recently found that 69 percent of U.S. CFOs expect a recession by the end of next year, brought on by weaker global economic growth and the effects of Trump-initiated protectionism. Similarly, JPMorgan Chase’s economic monitor this week put the chance of a recession within 12 months at 45 percent, up from 20 percent at the beginning of 2018.

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In other traditional indicators of looming recession, 10-year Treasury yields have fallen below 2 percent (for the first time in Trump’s presidency) and the “yield curve” has inverted, meaning investors expect short-term instability. Business investment is slowing. The Morgan Stanley Business Conditions Index had its largest drop ever this month and stands at its lowest level since December 2008, right after the crash. Rail traffic has dropped considerably, as shipments contract.

And what of Trump’s promises?

The tax cut would spur capital investment and worker pay? Not so much. Businesses used their windfall to buy back their own stock, spending more on buybacks than on capital expenditures in 2018 for the first time since 2008. The National Association for Business Economics found no major impact of the tax cut on capital investment or hiring plans. Neither did corporations repatriate offshore cash at the level Trump predicted they would.

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Trump’s boast that “the coal industry is back” — much like steel? Nope. Though the administration dramatically eased environmental regulations (this week it scrapped Obama-era clean-power rules), the U.S. Energy Information Administration forecasts U.S. coal consumption will fall 12 percent this year, with a similar drop next year. The latest data shows coal exports were down 12.7 percent in the first four months of this year compared with last year.

The ballyhooed revival of manufacturing? Not really. The Philadelphia Fed reported Thursday that its manufacturing gauge had taken an unexpectedly steep plunge. Earlier in the week , the New York Fed’s Empire State Manufacturing Survey took its biggest tumble since the data series began in 2001.

And yet Trump boasted this week: “Our economy has never, ever been stronger than it is today.”

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His tax cuts did briefly accelerate growth and wage gains, particularly for low-paying jobs. But hucksterism has met reality. As CNBC put it this week: “The Trump economy is starting to look more and more like the Obama economy.” After the “sugar-high,” the economy has returned to relative stagnation. But it’s worse than the status quo ante. The wasteful stimulus, applied at a peak of the business cycle, added trillions to the deficit. And Trump’s badgering of the Fed has likely kept interest rates lower than they would have been, less than half of where they were before the last downturn. This means the government has fewer fiscal and monetary tools to use when the next recession comes, raising the risk of a longer and deeper one.

The roaring headaches caused by Trump’s “roaring” economy will be with us for some time.

Twitter: @Milbank

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