Trump’s Tariffs Reveal They’d Threaten a U.S. Meltdown

After Donald Trump’s “Liberation Day” announcement of staggering “reciprocal” tariffs triggered days of steep stock market plunges, the President painted a picture of a world groveling at his feet, saying on Tuesday:

“These countries are calling us up, kissing my ass. They are, they are dying to make a deal. Please, please, sir, make a deal. I’ll do anything.
President Trump displays his by-country list of "reciprocal" tariffs.

I’ll do anything, sir.”

At a Republican dinner that evening he said:

"They’re all coming here. Japan is coming here as we speak. They’re in a plane, flying, lots of them”.

But after yet another day of stock index collapse, on Wednesday the President could only weakly urge everyone to buy stocks, posting at 9:37 that morning on Truth Social, “THIS IS A GREAT TIME TO BUY!!! DJT.”

That was before Treasury Secretary Scott Bessent that morning instilled in him what must have been a fear bordering on panic, enough to induce him to announce at 1:18 that afternoon his 90-day pause in the steep tariff imposition penalizing countries around the world.

Bessent undoubtedly schooled him in what it meant that both the bond markets and the dollar were in sharp declines of their own other than just the stock markets. Trump evidently took fright from the tariff chaos he had created when he was made to understand that the sell-off of U.S. Treasury bonds — normally regarded as the safest refuge from world turmoil — was signaling a loss of confidence in America’s future. The U.S. operates on borrowed money — witness our huge national debt — and if the world decides to pull its funds because the U.S. looks to become unstable, the government would need to offer exorbitant interest rates to lure them back, if they return at all. The spiraling cost of interest, already higher than what we spend on defense, could send the nation spiraling into bankruptcy.

Commenting on the gyrations before and after the 90-day walk back, The Wall Street Journal editorial board, having with some misgivings generally supported Trump, showed its disgust:

“It would be hard to find better evidence that markets believe the biggest threat to the world economy is Mr. Trump’s tariffs.”

Following the market rebound from the announcement — the Dow Jones Industrial Average surged 2,963 points, or 7.9% — Trump boasted, “It’s the biggest increase in the history of the stock market”, entirely without self-awareness that it was the abandonment (for now) of his own policy that had caused the ecstasy.

When asked by a reporter, “Did the bond market persuade you to reverse course?”, Trump, of course, said “No”, as if he had as usual gone on his infallible ("I am never wrong") instinct.

I was watching the bond market. The bond market is very tricky. I was watching it. But if you look at it now, it’s beautiful…I saw last night where people were getting a little bit queasy… I thought that people were jumping a little bit out of line. They were getting yippy, you know, they were getting a little bit yippy, a little bit afraid."

Watching helplessly as their savings and investments were taking a terrible beating, of course people were afraid, but that was about stocks. They knew nothing of the disaster a bond market plunge would bring.

At right-wing cable channels, after a difficult week of having to stir support for Trump despite the damage done to their audience, the pause was greeted with euphoria. Gushed Fox host Laura Ingraham,

Trump announced a brilliant move to pause the higher tariffs… but meanwhile to raise China’s tariffs to 125%, to wall off China by boxing them out...It's genius.”

(A day later, the White House would clarify that the China tariff is 145%; the original base of 20% had been forgotten.)

inside job

Democrats had a different view of the sudden tariff reversal. Senator Chris Murphy of Connecticut said “This could be an enormous scam”:

“The chaotic nature of this tariff policy with Trump’s position changing every single hour gives ample opportunity for any individual who has early access to information about the White House’s change in position to make boatloads of money.”

Senator Adam Schiff of California, questioning fraud, demanded.

”Who knew in advance that the President was going to, once again, flip-flop on tariffs? And, are people cashing in? There is just all too much opportunity for people in the White House and the administration to be insider trading, and you can’t put it past them for a minute.”

After ignoring furious Naval pilots put at risk of life by Defense Secretary Pete Hegseth's blatant disregard of military security, we can be certain that Attorney General Pam Bondi will not initiate any insider trading investigation.

After the rebound, another stock value plunge resumed Thursday when a new realization set in. During his run for the presidency, candidate Trump had promised a universal 10% tariff with 60% for China. As with his other threats, this was dismissed as campaign puffery, that he wouldn’t actually do it. But now investors awoke to Trump’s fallback position now in place being a 10% universal tariff — and 145% for China. We were not back to normal at all. The markets had come to the startling realization that Trump's tariffs are, on average, substantially higher than
the infamous Smoot-Hawley imposts that began in 1930 which greatly exacerbated the Great Depression. The Smoot-Hawley tariffs peaked at an averaged 19.8%. The table shows that Trump's average 27.7%.

lying to his supporters

The President, though, is counting on tariffs to somewhat offset the cost of still further tax cuts. In several mutations he continues to promote the tariff Big Lie. On his “Liberation Day” he said,

“But now it’s our turn to prosper and in so doing use trillions and trillions of dollars to reduce our taxes and pay down our national debt.”

Nowhere near trillions will be collected in tariffs; the government collects the tariffs such that only the government will prosper; the tariffs will be paid by Americans through inevitable increased prices; there is not a chance of paying down the national debt in the face of the massive tax cuts Congress plans in subservience to Trump.

He informed us that the period 1870 to 1913, when tariffs funded the government, was the most prosperous in American history,

“Then in 1913 for reasons unknown to mankind they established the income tax so that citizens rather than foreign countries would start paying the money necessary to run our government.”

Foreign governments did not pay the tariffs, Americans did. In his inaugural address he said,

“Instead of taxing our citizens to enrich other countries, we will tariff and tax foreign countries to enrich our citizens.”

The tariffs tax our citizens, not foreign countries. He also said,

“It will be massive amounts of money pouring into our Treasury coming from foreign sources.”

So massive that he would have to create a new agency to collect the loot, an agency he would later name the External Revenue Service, part of his ruse to pretend the money would come from external sources. Outside the White House he stated,

“Last year China made $1 trillion off trade with the United States, and now I’ve reversed it...We made $2 billion, we’re making that, $2 billion a day.”

That’s a lie. Last year we imported $438 billion of products from China; we sold $143 billion to them; the net trade deficit was $295 billion. When he repeated the $2 billion-a-day take before an audience of hardhat workers, they applauded. Evidently, untold millions of Trump’s 77 million voters still do not realize that it is they who will be paying the tariffs through the increased prices that lower-income and middle class Americans can ill afford. Trump is taking in the money from them.

In a post on his social media platform, Trump declared that his tariffs are "a beautiful thing to behold." "Some day people will realize that Tariffs, for the United States of America, are a very beautiful thing!"

While Americans in the millions watch trillions of dollars evaporate from their investments and 401k accounts as President Trump destroys the global trading system, the right-wing cable channels — charged with supporting Trump no matter what he does — have had to step to the lectern and preach his gospel to soothe the flock.

Rob Finnerty on Newsmax exorted viewers not to cave in to Democrat negativity:

”No one likes seeing the market fall. If you are retired or you’re close to retiring, this is especially nerve-wracking. But do you have buyer’s remorse? Do you regret voting for Donald Trump...after a bad week on Wall Street? I don’t think you do. But that’s what the left wants you to believe...Democrats are actually rooting for the stock market to crash. They want this all to go so bad for Donald Trump and the American people. They don’t care about Main Street. They clearly don’t care about you.”

This has been a consistent theme since Trump returned to the White House — painting a sordid picture of Democrats. Tearing down Democrats leads to some bewildering inversions, as this from Fox host Jesse Watters about Biden:

”And what did he build? Nothing. Build Back Better? Never happened. Bidenomics with open borders and outsourcing with record spending was throttling this country to the brink of a recession. This administration says they’re rescuing this economy from a recession.”

Biden built nothing? Not the $1.1 trillion infrastructure act which prior presidents repeatedly failed to deliver? A booming economy hardly on the brink of a recession? And this new administration, with the enormous disruption of tariffs, is not risking rather than rescuing the economy from a recession?

At the same time the nation’s top banker, JPMorgan Chase’s CEO Jamie Dimon, interviewed on Fox and asked about the likelihood of a recession, said, “I think probably, that’s a likely outcome.”

Fox Host Sean Hannity every night tried to rally the followers:

"It’s about protecting American industry, it’s about saving you money, it’s about high-paying career jobs for hard-working Americans all across the country, versus allowing the rest of the world to rip you off and restrict our products in their markets.

Greg Kelly at Newsmax about the tariffs:

“It’s so obvious, it’s so apparent. We needed a non-politician to pull this off. Somebody who truly cared about the country and not their own personal power, prestige, perks, and money”.

Does that sound to you like Trump? Fox host Laura Ingraham asked:

“Now how many times have you heard that a tariff is a tax? But of course that’s facile thinking. Even if foreign manufacturers try to pass on of some of their price hikes to consumers, you’ve gotta consider the broader picture”.

Occasionally someone couldn’t hold it in. Jesse Watters in split-screen seemed blindsided when guest Maria Bartiromo, who hosts her own show on Fox, broke protocol to lament that:

”People are nervous...what President Trump is doing is massive...Right now you're talking about markets in a tailspin. People are nervous. They are down. People have lost money. We’re talking about a nine trillion dollars in market value lost, wiped out, in about a week and a half. So markets going down is not good.”

Cue Commerce Secretary Howard Lutnick on "Face the Nation" last Sunday to cheer us up:

"Trillions of dollars of factories are going to be built in America...The army of millions and millions of human beings screwing in little, little screws to make iPhones. That kind of thing is going to come to America."

Sensing a mistake, he then said it would be done by robots, to viewers' great relief — instead of mind-numbing jobs, no jobs at all.

Secretary Bessent on "Meet the Press" was equally encouraging:

“One thing that I can tell you as the Treasury Secretary, what I’ve been very impressed with is the market infrastructure, that we had record volume on Friday, and everything is working very smoothly, so the American people, they uh can...take great comfort in that”.