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.”
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.”
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.
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.
