The Art of the Crash

The Trump Admin Destroys the American Economy

On April 2nd, Donald Trump announced that the United States would be levying tariffs against nearly every other country on earth. His plan included a 10% flat tariff on all imported goods and higher selective tariffs on individual partners such as China and the European Union. Since the signing of the tariffs (on a date he referred to as “Liberation Day”), the Trump administration has subjected the American economy to a roller-coaster of shocks. Additional tariff increases have been announced in response to retaliatory measures from America’s trading partners, while some are already being quietly walked back. The result of this commotion has been a decline in the value of the American dollar and the erasure of nearly $10 trillion of value from the stock market in just 10 days.

We should begin by recognizing that the decision to levy tariffs and the process of determining tariff rates was fundamentally half-assed by Trump. Unlike in his first administration, there is no room for anyone with subject matter expertise or critical thinking, just yes-men and true believers in the MAGA agenda. Trump is now surrounded by advisors who are only interested in preserving their place in the administration and appeasing him at any opportunity. The impact of prioritizing loyalty over expertise is especially apparent with this tariff fiasco. The White House not only disregarded the advice of countless economists regarding the impact of tariffs but also likely used generative AI to concoct the policy. The result? The use of a nonsense formula to calculate tariffs and a list of domain endings to determine which countries are targeted. Now we have a 29% tariff on goods from an island full of penguins.

All of this has created an unthinkable amount of volatility in the stock market. Beyond the collapse visible across multiple indexes, Trump’s tariffs have led to a drastic devaluation of the American dollar and a mass sell-off of bonds. The fact that these two trends are occurring simultaneously is the inverse of normal patterns - suggesting that there is a fundamental lack of confidence in Trump’s management of the economy. Additionally, the cascading impacts of the tariffs includes the potential end of the US Dollar’s role as the world’s reserve currency, as the American market and its affiliated institutions are no longer seen as a safe bet. The consequences of this would be severe and long-lasting.

Beyond the economic impact of this self-induced crisis, the tariff debacle has done significant damage to the United States’ relations with Europe. As our largest trading partner, the European Union represents a huge source of manufactured goods and foreign direct investment, respects American copyright, and is aligned with American regulations in the areas of finance and technology. Best of all, the European Union is a fellow liberal democracy and a close geopolitical ally of the United States. Unlike our trade with China, there is no incongruency between American commercial interests in Europe and American strategic interests in the Atlantic. Nonetheless, Trump claims that the EU has been “ripping us off for years” and managed to have a former ally levy a retaliatory tariff against us. This will all end up benefiting China and the EU as global capital flows reorient from the United States and focus on more predictable markets. What a disaster.

This crisis makes the United States look weak. After declaring war on the world economy, the White House is now quietly pausing, walking back, and modifying many of the original tariff policies included in the “Liberation Day” announcement. These are the actions of an administration that is equal parts lazy and short-sighted. There is no driver at the wheel and there is no plan in the Cabinet beyond appeasing Trump’s worst impulses. The chaos and dysfunction of the Trump White House are no longer contained within the world of politics and government, as every American with a stock portfolio or 401k saw their holdings dive into the red because of Trump’s tantrum. The frantic efforts to highlight a supposed recovery of the economy after a pause on the tariffs was announced fail to recognize that these gains are measured against recent losses - meaning that the damage has already been done and we’re now trying to rebuild. Trump has already taken a major hit over the roll-out of tariffs and his administration’s perceived lack of competence in managing the economy. This will have a lasting impact on the administration and will loom over the GOP during the coming midterms.

I have a plan for growing the economy and fixing our trade imbalance: fire everyone who made this possible. Trump’s worst impulses are enabled by countless Republicans who lack the courage to stand up against this insanity. Unfortunately, we know there will be zero accountability within the White House for the unnecessary damage. However, Congressional Republicans have the chance to end all this madness whenever they want. They are actively choosing to let Trump destroy American credibility in the global market because they fear him. It is up to us to contact Republicans in swing districts and make it clear that we will not stand for this.

Trump’s tariffs won’t bring back jobs and they won't increase American production - they’re essentially a tax on the hardworking people in this country and a needless self-induced crisis that is uniting the world against us. The decision to exclude cellphones and electronics from the China tariffs strikes me as a last-minute sweetheart deal to appease Trump’s friends and donors. This is capricious, fundamentally unfair, and will likely be reviewed by the courts as a case of corruption. The way you grow the American economy and bring back manufacturing is through supporting initiatives like the CHIPS Act. Americans deserve leadership that will deliver on a vision of prosperity and growth, not an administration that fails to stand by its short-sighted agenda of threats and extortion.

There’s no 4D chess at play here. Trump’s initial plan was to use tariffs as a means of balancing the budget. This justification then shifted to tariffs as a tool to balance trade and secure better deals. Then, tariffs became a tool for job growth and reshoring of manufacturing. Once the impact and damage of this short-sighted agenda caught up to the White House, Trump walked back the bulk of the tariffs and declared victory. We’ve gotten nothing out of this process other than pain and financial loss; Trump blew up the market and damaged the economy for nothing. Our enemies have already seen that Trump has no guiding vision for policy and cannot stomach pain and unpopularity - they’re going to punch back, and Trump’s inevitable folding is going to be seen as a victory against America. We need leadership and vision to guide this country through the changing global economy, not Trump’s self-destruction and short-sightedness.