During the 2024 presidential campaign, on the campaign trail, then candidate Donald Trump would talk about his deep love of tariffs, and how, after he is elected, he will impose them on other countries that are "cheating us". When economic analysts on both the left and the right would say that those tariffs would cause skyrocketing inflation for American consumers and perhaps tip the country into a recession, Trump's various Wall Street supporters would give interviews reassuring the public that his threats of starting massive trade wars were just a "negotiating tactic". Surely, they claimed, he was just using this threat as a way to intimidate other countries to gain an advantage for the US.
At first, they appeared to possibly be right, as Trump went back and forth on his tariffs plans, starting and then stopping them as the stock market jumped up and down. But then came yesterday, the day that Trump labeled " Liberation Day", in which he definitively rolled up tariffs that were much higher than many pundits expected. Some of them were absolutely stunning: a 10% across the board tariff on all imports, with additional tariffs for China (lifting its total to a shocking 54%) and South East Asian countries like Cambodia (49%) and Viet Nam (46%). Trump and his supporters claim that these tariffs are not a tax on the American public, and will bring manufacturing jobs back to the US. Seeing as those kind of jobs only make up 8% of our current workforce, that's a tall order. It's also based on the notion that all the manufacturing jobs that dried up as companies in the 70's and 80's cut workers will all start rehiring. The problem is that while it's true that many of those jobs were shipped by companies to China and Mexico to cut labor costs, it's also true that millions of those jobs were also lost to mechanization, which companies will never abandon.
No matter how much Trump can claim that his tariffs will jump start our economy, the truth is that higher tariffs will result in higher prices for American consumers, who are already mad about Covid era inflation. And higher prices will naturally lead to reduced consumer spending and a weaker economy. Don't ask me, ask Wall Street, where stocks saw their highest drop since 2020. The total amount lost in one day is a staggering 2.4 trillion dollars! Add that to the already 5 trillion dollars that has been lost since Trump took office, and you have to wonder why people thought that he would be good for the economy.
If the country really does fall into a recession, or worse, it will be a truly unique one: the two big recessions in this century happened first in 2008 due to banks making credit loan defaults, and the second in 2020 due to the pandemic. This coming economic tumble will be the first to be blamed entirely on the actions of our president with no one else for him to point to. While he will try to somehow say that Biden's policies caused it, only his most rabid supporters will buy that.
Trump often expresses his love for tariffs by talking about William McKinley, the president who ran the country from 1897 to 1901, and who did initially support tariffs before later changing his mind. But even if that time period was a rosy for the country as Trump says it was, he's ignoring just how much the world has changed since then. Our modern global trading system can bring products from one side of the world to another with speeds that people back then could only imagine. His view of a fortress America, one that allows in few immigrants and manufactures all our own goods, down to the last part of each car or computer, just isn't realistic in this modern world.
Hopefully, Trump's Wall Street supporters will eventually convince him of the economic damage his trade war is doing and he can call off (claiming victory somehow, of course). Otherwise, Trump may blow a hole in our nation's economy that, combined with his paring down of essential government agencies, could send our country on a tail spin the likes of which it has never seen before.
