It is quite surreal how quickly the national conversation around tariffs has become such a hot-button issue. Up until a few months ago, you would be hard-pressed to find someone who didn’t directly work in finance or business who had ever had a conversation surrounding the topic and now, seemingly everyone has an opinion on them, for better or worse.
While I am no economist and I find any conversation around the economy or stock market to be terribly dull, the new tariffs imposed by the Trump administration have already and will continue to have lingering effects that will affect the everyday lives of Americans.
In short, the tariffs seem to totally suck.
When the initial tariffs dropped, the Dow Jones dropped over 4,000 points in two days. The Dow Jones is a stock market index that tracks the performance of 30 large and publicly traded US companies and is treated as a benchmark for the overall stock market — widely considered a good barometer for the country’s economy.
According to Bloomberg, the S&P daily trading range was 5% for six consecutive days. That does not mean much to me, but the only other times when the range was that high was during the substantial rise of the pandemic during March 2020, the housing market crash in the fall of 2008 and the moments before the stock market crash in 1987.
In short, circumstances were pretty bad and treading to look even worse if the tariffs fully took hold.
These proposed rates effectively cratered the US stock markets and the global market’s confidence in our economy’s stability in one fell swoop.
While businesses and consumers were expressing distress and fear at the coming changes, Trump told supporters on Truth Social not to be a “PANICAN” — which is a made-up word for “a new party based on weak and stupid people.” A real showcase of his verbal prowess.
He then took the stage at the National Republican Committee Dinner and claimed other countries were scrambling to call him and “kissing [my] ass” to negotiate tariff rates before going into effect.
I would imagine this scenario is more in line with John Oliver’s interpretation from his most recent episode of “Last Week Tonight” where the other countries play the role of someone trapped in a room with a monkey who has a loaded gun. The type of panic that comes from uncertainty and fear that the person you are dealing with has no real idea what they are doing and can do anything at any time.
While posting to his supporters online to “Be cool!” and his administration continuing to promise that these tariffs were permanent and would not be altered, a few hours later Trump announced a 90-day pause on all proposed tariffs apart from a flat 10% rate on all imports and a now 145% rate on all imports from China.
This surprised even members of his administration like US Trade Representative Jamieson Greer who was sitting before the House Ways and Means Committee and actively defending the tariffs when he received news that the tariffs had been paused.
This, combined with Trump’s public statements to the media that he paused the tariffs as a result of buyers being “yippie” about them hurts the theory that this was all a part of some master plan to save the economy.
Trump seems to believe trade is a zero-sum game, where if we export more goods to a country than we import from them then we are somehow being ripped off and taken advantage of.
Obviously, this is quite silly.
Take Lesotho, a tiny African nation of around 2.3 million people for example. Lesotho ranks as one of the world’s poorest nations but has an immense amount of minerals in the form of diamonds. America buys a lot of diamonds from them and because they are a poor country, they do not buy much from us in return.
With Trump’s logic, we are being ripped off by this tiny nation he described in March as “a place no one has ever heard of,” and so we slapped them with a 50% tariff on all imports from Lesotho.
This will obviously make the process of buying their diamonds more expensive and will likely not result in them increasing the amount of imports they take in from the US as they will still be one of the world’s poorest nations — with or without the tariffs imposed upon them.
Only time will tell how widespread and deeply felt the impacts of these proposed tariffs will be, but if the past two weeks have been anything to go by, we are in for a whirlwind of soaring prices and economic uncertainty.
Even if the tariffs work as intended and we one day bring manufacturing jobs to America and the country thrives and is self-reliant, it seems unlikely that this would happen without immense economic turmoil in the years it would take to reach this utopian result.
A Great Depression type recession is not something I think the average American is a-okay to simply endure while waiting for a promised better future that may never come.
Perhaps all the push-back on these tariffs has caused Donny to see the error of his ways and things will get back to a sense of normalcy, but if everything we know about him is anything to go by, the more we tell him not to do something, the more his child-like mind tells him to do it that much harder.
If Trump had ever demonstrated some competency and intelligence that instilled some confidence in his business acumen, I would be willing to hear him out, but it seems like he is making things up as he goes along.
These tariffs are misguided and frankly, stupid.
If the only consolation you can give about them is that one-day things will be good and to just hunker down for however long they are bad, you have lost me and likely millions of other Americans.
With the recent pause, we have luckily dodged a bullet, but the monkey still has the gun.
But of course, that’s just one man’s opinion.
Categories: Opinion
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