With the heavy and painful tariffs that Donald Trump revealed on Thursday, “Tariff Man” resembles a paranoid, 12-year-old bully who feels wronged by everyone and seeks retribution. However, the president’s chosen method of vengeance – imposing massive tariffs – is poised to inflict considerable harm on both the US and global economies. Stock market participants are already convinced of this, as evidenced by Wall Street and global markets losing trillions in value recently due to Trump’s fixation.
Despite the US economy being robust when he assumed office – with an unemployment rate of just 4.1%, inflation below 3%, and the strongest economic growth in the industrialized world, along with record high stock market values – the president has intensified his perilous, retaliatory trade war. It’s questionable whether the economy required the shock therapy that Trump is inflicting. The price hikes stemming from his tariffs, which effectively act as an import tax, are projected to cost the average American family $3,800 annually, based on the Budget Lab at Yale.
Trump correctly points out that the number of manufacturing jobs has significantly decreased over the decades, and he aims to restore that number. However, he’s wagering high that he can markedly boost factory jobs, even though many economists argue that the opportunity has slipped away and that attempting to rectify it might be too late or exceedingly painful. In 1979, the US boasted a record 19.5 million factory jobs, which dwindled to 17 million by 2001, and now sits at 12.7 million (with 600,000 jobs gained during Joe Biden’s administration).
Trump’s latest tariffs stem from a mix of rashness, impulsiveness, and ignorance; some economists argue that sheer foolishness and economic illiteracy also play significant roles. Paul Krugman describes Trump’s tariffs as reflective of the “whims of a mad king,” noting that the administration’s justification for tariffs is “entirely incoherent,” as it maintains that tariffs won’t raise prices while simultaneously expecting to generate hundreds of billions in revenue.
The tariffs Trump announced last Thursday are astonishing – imposing rates of 50% on Lesotho, 49% on Cambodia, 46% on Vietnam, 34% on China, 32% on Taiwan, 24% on Japan, and 20% on EU nations. These figures have not emerged from careful consideration over months; rather, they appear to be the result of haphazard calculations.
It would be generous to say it’s the one-eyed leading the blind. Instead, it’s an economically blind, impetuous president guiding a silent and intimidated Republican Congress. One tragedy in this scenario is that numerous congressional Republicans recognize the severe harm Trump is inflicting but are too cowardly to speak out and provoke the wrath of Trump and Elon Musk on social media.
Mark Zandi, chief economist at Moody’s Analytics, is forecasting disaster. He warns that Trump’s tariffs could prompt a recession “to hit imminently and persist until next year.” Zandi suggests economic growth could plummet by 2 percentage points, while the unemployment rate might rise to a painful 7.5%. On Friday, Federal Reserve Chair Jerome Powell also raised concerns, stating that Trump’s tariffs could lead to even slower economic growth and higher inflation than previously anticipated.
With Trump’s 50% tariff on Lesotho, 46% on Vietnam, and 37% on Bangladesh, these countries – reliant on export-driven apparel industries – will be severely impacted. Consequently, there will be significant layoffs, along with a likely rise in hunger and suffering – further exacerbated by Trump-Musk’s substantial foreign aid cuts to USAID that have already led to increased hunger and mortality rates. One must wonder: by targeting impoverished, apparel-exporting nations like Lesotho, Cambodia, Vietnam, and Bangladesh, what outcome is Trump seeking? Is he aiming to revive low-paying garment sector jobs in the U.S. that produce jeans and sneakers?
Thoughtfully designed tariffs can be beneficial. They can fortify critical industries or shield them from total collapse due to the misbehaviors of other nations, such as China’s improper industry subsidies or dumping goods onto the global market far below production costs. Unfortunately, Trump’s so-called “liberation day” tariffs are not precise tools aimed at supporting specific industries, but instead act as a scattershot assault, affecting everyone and everything, including American consumers and industries. It’s important to remember that these tariffs will hike costs for many U.S. manufacturers, making them less competitive by significantly raising the prices of imported steel and auto parts.
The tariffs imposed by Trump exceed even the notorious Smoot-Hawley tariffs, which are largely recognized for exacerbating the Great Depression. Krugman observed that Trump’s tariffs may result in severe damage since “imports as a share of the [U.S.] economy are three times what they were in the 1920s.”
Even if Trump’s tariffs were to achieve their desired effect – creating an additional million or two manufacturing jobs – the price to pay would be colossal. A recession, millions of families suffering from increased prices, trillions in lost stock market value, deteriorated relations with close allies and other nations, and enabling Trump’s adversary, China, to improve its trade and economic ties with other countries. Additionally, there would be a severe economic shock for many impoverished nations.
Moreover, it’s far from certain that Trump’s tariffs will generate a million or more manufacturing jobs; U.S. economic growth and employment will likely be hampered by a potential tariff-induced recession, retaliatory trade measures from other nations, a long-term loss of customers as traditional trading allies divert attention from the U.S., and a possible enduring decline in U.S. industrial competitiveness as tariff protections allow inefficient companies to thrive.
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Trump’s primary hope is that corporations will establish new factories and generate additional factory jobs in the U.S., but corporate leaders will hesitate to act unless they feel economic stability and predictability. They are not oblivious to Trump’s erratic behavior and are aware of his tendency to play dealmaker, winning concessions from other nations only to drastically reduce their tariffs shortly thereafter. Trump’s team asserts that these tariffs are intended to be long-lasting, but can corporate executives rely on these assurances when contemplating a $400 million investment in a new factory?
In announcing his substantial new tariffs last Thursday, Trump declared: “April 2, 2025, will forever be remembered as the day American industry was reborn, the day America’s destiny was reclaimed, and the day we began to make America wealthy again.” As is customary, Trump neglected to mention some crucial facts.
Although he won’t acknowledge it, the US is already quite prosperous. If he were genuinely committed to revitalizing the economy and promoting fairness, he wouldn’t be so eager to bestow enormous tax reductions on the ultra-wealthy or provoke fears of massive cuts to Medicaid and food assistance programs that struggling American households depend upon.
What Trump and his administration will never admit is that April 2, 2025, may be remembered as the day the US economy took a severe, Trump-induced plunge toward recession and escalated prices. And though Trump may not care, April 2, 2025, might also be noted abroad for inflicting immense suffering on workers in countries from Bangladesh to Lesotho to Honduras.
