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The great and powerful Oz, as Donald Trump models himself, never warned Americans that the road to his promised Golden Age would be full of speed bumps, stops and starts and big tolls in the form of higher shopping bills and reduced retirement accounts. Candidate Trump also didn’t caution voters that they’d have to be patient. No, he would work his magic “on Day 1,” he promised constantly, mainly with his “beautiful” tariffs on imports from other nations. He even took credit for stock market gains before he was back in the Oval Office.
But now he’s there, and market losses have wiped away all those gains, consumer confidence has taken a dive and private-sector hiring is below expectations.
Blame Joe Biden, Trump says, for leaving him “a horrible economy,” which the former president most certainly did not. Just about every other market-watcher, here and abroad, including the Wall Street Journal editorial board, faults the current president’s all but irrational fixation with tariffs, his erratic on-off-on-again imposition of them, and the resulting uncertainty that is paralyzing small and large businesses alike.
As is often the case in Trump times, a headline this week from the Onion was closer to truth than satire: “Trump Says Recession Unfortunate But Necessary Step To Get To Depression.”
As President Trump publicly embraces anti-democratic dictators he is forfeiting the United States’ 80-year leadership of the free world.
That was hardly any more ridiculous than Trump’s nonsensical talking points of late, not least his remarks Sunday on Fox News in which he declined to rule out a recession on the way to the promised land. “It takes a little time,” he said. Meanwhile, “you can’t really watch the stock market,” said the man who obsessively watches the stock market.
For a real-news headline, here’s the Wall Street Journal late Monday, after the market slide Trump sparked: “Wall Street Fears Trump Will Wreck the Soft Landing.” Both JPMorgan Chase and Goldman Sachs had elevated the risk of recession because of what Chase called “extreme U.S. policies.” As one investor told the Journal: “This is very much a man-made situation.”
He didn’t have to name the Man, of course. But neither should the “situation” have come as a surprise to the corporate titans, lobbyists, agribusiness execs and other Republicans who are reportedly imploring White House Chief of Staff Susie Wiles and other Trump aides to help the boss get a grip.
Tariff tumult has discombobulated them only because they didn’t take Trump seriously when he fantasized at campaign rally after rally about “tariffing” the heck out of foreign imports. As recently as January, the Associated Press quoted an economist who said the economic fallout likely would be “enough of a deterrent that Trump will not end up implementing these higher tariffs.”
No matter the alarms raised by a majority of economists, to Trump, tariffs aren’t a dangerous weapon, they’re a tool
The president’s enablers voted for him not because they believed his claims that tariffs wouldn’t raise prices and cost jobs (despite all economic evidence to the contrary, including the record of Trump’s first-term tariffs). They simply figured he wasn’t serious, wishfully thinking that he would be talked out of the dumb idea.
But by whom?
In economic policy as in so much else, the adults have left the room for Trump 2.0. That too was predictable given candidate Trump’s frequent talk of turning to yes-sayers in a second term. Missing are the moderating likes of Gary Cohn, Trump’s chief economic advisor in the first term, who resigned in March 2018 after failing to dissuade the president from slapping high tariffs on foreign steel and aluminum. Days earlier, Trump had tweeted: “Trade wars are good, and easy to win.”
He still thinks so, even as he wobbles, delays, follows through, then retreats and grants import exemptions in response to the outcry at home. The same sorts of metals tariffs that proved the final straw for Cohn seven years ago took effect at midnight Tuesday, at a 25% rate for products worldwide. The European Union predictably retaliated with tariffs starting April 1 on iconic U.S. goods including Harley-Davidson motorcycles, bourbon and blue jeans.
That now makes for a multifront trade war, including battles against China, Canada and Mexico, America’s three largest trading partners. All have counterattacked; on Monday, China imposed tariffs on U.S. farm products, thus hitting Trump’s rural base.
Democrats are all but impotent; Republicans have capitulated; the media is fractured. There’s only one bulwark left to counter the emergency unfolding in Washington
And with the latest volleys, finally business-world Trump apologists are ‘fessing up to their blinkered belief preelection that promised tax cuts and deregulation wouldn’t come with a big helping of tariffs. “People could only see the good side of what Trump was promising to do,” economist Dario Perkins told the Journal. “That has basically evaporated, and now, we’re back to recession watch.”
CEOs in the Business Roundtable thronged to a meeting with Trump on Tuesday. They didn’t get what they came for — “less unpredictability,” in the words of one anonymous attendee to the Washington Post. He added: “How do you do that with this president?”
Trump variously claims tariffs will force foreign companies to build businesses here and U.S. companies to expand at home; that they’ll raise needed revenues or that they’re righteous penalties for countries that are sources of drugs or migrants. It doesn’t add up, and Americans are paying a price.
Within the Trump administration, cracks are forming. Publicly, however, the gaslighting continues. “It is not chaotic,” Commerce Secretary Howard Lutnick insisted to CBS News on Tuesday. “And the only one who thinks it’s chaotic is someone who’s being silly.”
Silly us.
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Ideas expressed in the piece
- The article argues that President Trump’s erratic tariff policies and fixation on trade wars have created economic uncertainty, leading to market volatility, reduced consumer confidence, and fears of a recession[3][5][6]. Analysts cite tariffs as a key factor in rising inflation and business paralysis, with JPMorgan Chase and Goldman Sachs warning of increased recession risks due to “extreme U.S. policies”[3][6].
- Critics, including corporate leaders and economists, highlight that Trump’s tariffs have backfired, provoking retaliatory measures from trading partners like China and the EU, which target politically sensitive U.S. industries such as agriculture and manufacturing[3][5]. These retaliatory tariffs are seen as self-inflicted wounds that harm American consumers and businesses.
- The absence of moderating voices in Trump’s administration, such as former advisors who resisted protectionist policies in his first term, has exacerbated policy unpredictability[5]. Business leaders reportedly sought “less unpredictability” in a meeting with Trump but left unsatisfied, reflecting concerns over the administration’s chaotic approach[3].
Different views on the topic
- Republicans and Republican-leaning independents remain optimistic about the economy, with 73% expecting conditions to improve under Trump’s policies[1]. This optimism extends to specific areas like energy and consumer goods affordability, where majorities of Republicans predict gains[1].
- Some forecasts, such as those from the Atlantic Council, suggest that productivity gains and deregulation could fuel stronger growth in 2025, with potential GDP increases up to 3% if “animal spirits” are unleashed[2]. These projections contrast with recession warnings, emphasizing supply-side factors like labor productivity and technological advancements.
- While tariffs are widely criticized, certain analysts note that frontloading imports and temporary consumer spending boosts could offset short-term economic drags, delaying the full impact of trade restrictions until 2026[4]. Additionally, extensions of the 2017 tax cuts and deregulation efforts are expected to stimulate business investment over time[4][5].
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