If your long-term strategy lasts just a few hours, maybe it stinks.
President Donald Trump sank the stock market and upended the global economy with his “Liberation Day” tariffs, but has fortunately come to his senses, albeit only slightly and temporarily.
Last week, Trump imposed stiff and widespread tariffs on nearly every country in the world because they “treat us badly,” citing “chronic trade deficits.”
On Wednesday, amid a worsening stock market, rising interest rates, a troubled bond market, retaliatory tariffs and bad polling, the President backpedaled and paused the tariffs for 90 days just hours after they went into effect.
Well, paused everything except for a 125% tariff on Chinese products and a blanket 10% tariff on everyone else. In other words, he hopped off the freeway to economic disaster and took the slow, bumpy, scenic route instead.
The pause was initially greeted by a global sigh of relief and a rebounding stock market, only for things to worsen again on Thursday when everyone realized this new plan is only less bad.
Apparently, everyone and their mom was telling him his Liberation Day plans were terrible, or, as he put it, they were getting “yippy.”
And “a little bit afraid.”
And “a little queasy.”
“Over the last few days it looked pretty glum,” Trump said.
Not good.
To save face, Trump said that many countries “are calling me up, kissing my ass… they are dying to make a deal.” Who knows if that’s true.
If Trump wanted to go after China, he could have just done that. And if he wanted to renegotiate deals with other countries, there was obviously an easier and better approach. He didn’t have to make Americans panic, sink the stock market and upset the entire world.
As the market was tanking just days before the tariffs went into effect, Trump tried reassuring America, as best as he knows how, by posting on X: “The United States has a chance to do something that should have been done DECADES AGO. Don’t be Weak! Don’t be Stupid! Don’t be a PANICAN (A new party based on Weak and Stupid people!). Be Strong, Courageous, and Patient, and GREATNESS will be the result!”
It’s not surprising this didn’t work. It’s caveman babble (Me good! Make up words! You STUPID!!) and doesn’t pass the smell test.
Trade deficits aren’t inherently bad. America has money to spend and other countries have products to buy. It’s a win-win situation.
But Trump sees trade deficits as America getting ripped off, which is erroneous.
America is no more getting ripped off than I am by my grocer. I have money, my grocer has food. The grocer doesn’t need to buy anything from me for it to be a mutually-beneficial relationship. Win-win.
Now what Trump seems to be arguing is I should save my money and make my own food. But the answer to that explains why free trade is so important.
Personally, I don’t have the time or the knowhow to grow and produce all my own food. I don’t have enough land for animals and I have no interest in slaughtering them. I’ve tried growing my own vegetables, unsuccessfully, and I don’t know how to can or pasteurize, and so on.
I could probably spend some money learning what to do and building an operation. Maybe I’d even become mildly self-sufficient. But it would take time, I’d have a much smaller variety of products and it’s possible I’d starve to death.
If producing food for myself is hard, I’d be totally lost trying to make money from it. I have no way of scaling up to prepare, package, sell and ship everything. Instead, I should focus on the highest and best uses of my talents, time and money.
As a country, we could do these things (and in many instances we already do), but it doesn’t make sense to artificially arrange our economy to the vision of a president and some of his advisors. A Republican administration won’t fare better at central planning than the progressives.
Markets will determine what is best if they’re left alone and allowed to work. It’s silly to think the problem with the American automobile market is one solved by tariffs.
Having partners makes sense. Free trade isn’t a rip off, we help each other. Canada is a significant source of energy for the United States. It’s not Canada’s fault our energy production is a mess.
This isn’t to say that there aren’t real concerns regarding existing trade deals and that Trump can’t or shouldn’t try to renegotiate. He’s right to want to improve deals. But tanking the economy by imposing widespread tariffs as the first step in the negotiation is a bad approach.
Back to the grocery store. If I walked in and started screaming that they were ripping me off, ripped up my credit card and spit on the floor, they’d be upset. Even if I was their best customer, there’d likely be consequences. They would eventually see me as unreliable and start to prepare for life without me. Ticking off the entire world all at the same time is the equivalent.
America used to be the safest bet in the world, but after years of self-inflicted wounds like government shutdowns, reckless spending and massive debt, the punitive tariffs and reneging on trade deals are not well received.
The rest of the world might not get along, but a common enemy, us, could drive many to forge new alliances.
Trump should ditch the tariffs, do some damage control with allies and reassert America as the center of global free trade.
Matt Fleming is an opinion columnist for the Southern California News Group. He can be reached on X @flemingwords.
