President Trump is betting his presidency on the biggest instant, unilateral, by-choice-not-necessity economic mandate in U.S. history.
Why it matters: He’s gambling that generations of politicians, economists, CEOs, small-business owners, academics and even some of his own staffers are wrong — and that he’s right.
- And he’s doing it with an issue that hits every American.
For Trump to be right, you gotta believe…
- That Trump’s instincts are better than the past half-century of his party’s judgment, as well as the judgment of the economists who’ve studied the topic extensively, both historically and contemporaneously.
- That Sen. Mitch McConnell (R-Ky.) — the former majority leader, reflecting what the vast majority of Senate Republicans say privately — was wrong when he tweeted: “As I have always warned, tariffs are bad policy, and trade wars with our partners hurt working people most. Tariffs drive up the cost of goods and services. They are a tax on everyday working Americans.”
- That a minimum 10% increase in taxes on all imports — and much higher taxes on goods that come from China, Vietnam and other leading trade partners — won’t meaningfully increase prices for most Americans.
- That U.S. companies will be able to make the same products just as cheaply — and right away.
- That allies and adversaries hit with big tariffs will just suck it up rather than retaliate, or that they’ll move en masse to negotiate new trade deals favorable to the U.S.
- That American influence and power overseas won’t diminish when those same allies start doing more business with each other — or China.
- That Canadian Prime Minister Mark Carney was wrong when he said: “Our old relationship of steadily deepening integration with the United States is over. The 80-year period when the United States embraced the mantle of global economic leadership … is over. While this is a tragedy, it is also the new reality.”
- That the U.S. stock market and economic growth will rise again amid a global trade war of choice.
- That recession forecasts by major financial institutions are wrong. And that the Dow, S&P and NASDAQ (U.S. stocks off $3 trillion Thursday — the biggest one-day drop since March 2020) are all wrong — or wildly overreacting.
The big picture: Trump feels wholly confident he’ll be vindicated — if not instantly, then soon. Officials tell us he’s never felt more confident and happy than in pushing maximal tariffs, a lifelong aspiration.
- Hell, he was so sanguine after the announcement that he took an Oval Office meeting with Laura Loomer, a notorious conspiracy theorist, to hear her pleas to fire national security officials she deemed disloyal.
The president feels like a real estate mogul with a full inventory of mansions under his sole control, insiders tell us.
- Despite public comments, Trump sees this as maximal leverage to work the phones for weeks or months — cutting deals to force better terms for the U.S.
But what if he’s wrong? This is the first issue he has tackled that literally hits every American, especially his working-class base. It comes right after this week’s three special elections showed the first tangible signs of unease with his governing.
- Trump’s done listening to critics.
- Everyone around him — from top staff to top Republicans in Congress — fear disagreeing with him. Even if they had the stones to confront him, they seem convinced it’d be futile. They’re as all-in on Trump as Trump is on tariffs.
So for this to work, you gotta believe he’s right.
- Go deeper: Trump’s tariff math.
