Normally, presidents try to do everything in their power to avoid disrupting the country’s economic engine and global stability – especially when unemployment is low and the economy is growing, as was the case when Trump took over from Joe Biden.
But with his astonishing move to impose new tariffs on nearly all imports from 185 states and territories, Trump has generated an extraordinary shock, contrary to the advice of almost all economic experts and the grim lessons of history. Donald Trump was actually right about one thing: everyone will remember this day.
Trump doesn't care
Throughout his life, Trump has remained faithful to the mystical belief in the power to make imported goods uncompetitive in order to boost domestic production. This is even though trade wars tend to end badly, and tariffs are more of a feature of the 19th century than the present one.
In a surreal appearance in the White House Rose Garden, the world saw an American president doing somersaults and jeopardizing the economic fate of billions of people with a strange political gamble, as noted in an analysis by CNN.
The biggest political surprise is that Trump - in the name of revitalizing the economic prospects of post-industrial regions devastated by job losses and foreign factories - is on the verge of causing real suffering to Americans.
He is implementing a policy where almost everything people buy will become more expensive, from fast-food products to electronics, from cars to new homes. The poorest will be hit harder than Trump's wealthy friends, as will those with fixed incomes.
Trump said over the weekend on NBC that "he doesn't care at all" if car prices increase. His new tariff experiment shows that he means business. It is a stunning political position for a billionaire president leading a cabinet of other billionaires and millionaires, as the source cited notes.
Those affected will retaliate
No one can predict exactly how this gamble will unfold.
Assuming the full range of tariffs is implemented and some are not rescinded at the last moment - a possibility that cannot be ignored given Trump's past twists - the world is on the brink of a large-scale trade war.
Foreign leaders are as subject to political factors as Trump. And they will be under intense pressure to strike back at the US in response to the tariffs the president has announced.
Foreign retaliations could set off a chain reaction and make Trump, who always wants to have the last word, feel that he has no choice but to respond.
The president has not explained why he insists on having the world's most powerful economy trigger a trade war with small, troubled nations like Cambodia, to which he has applied a 49% tariff. Or why it's a good idea to make life even harder for developing countries in Africa.
Furthermore, does Trump really want to engage in economic battles with penguins? The White House's tariff list includes the small islands of Heard and McDonald in Antarctica, which are affected by a 10% tariff - despite being little more than a refuge for marine birds.
The other major political risk in his new approach - which undermines the global free trade system that the United States itself has built in recent decades - is that it is unlikely that Trump will reap any short-term political rewards from his gamble.
Many analysts believe it is a fantasy that manufacturers will decide to build new factories and supply chains in the US, as Trump promises. But even if they do, the chances of this happening during his term - or even in a third term he keeps hinting at, despite constitutional prohibitions - are very slim.
While the tariffs will bring in hundreds of billions of dollars for the US Treasury, it is unclear whether voters will be swayed by Trump's promise that everyone will receive compensation for price increases in the tax reduction bill. And even if the bill passes, all signs indicate that it disproportionately favors the very wealthy.
A test for the defiant businessman Donald Trump
"It will be a very important moment. I think you will remember today," Trump told Cabinet members and congressional leaders present at the White House event. "It will be a day that we hope you will look back on in the years to come and say, 'You know, he was right. This turned out to be one of the most important days in the history of our country,'" continued Trump, confidently.
Trump's sense that he has created a turning point is probably correct. But in a completely different sense: some economists predict that a return to the type of trade barriers that caused the Great Depression of the '30s will trigger a recession.
"This is one of the most important days, in my opinion, in America's history. It is our declaration of economic independence," said the president. His hyperbole could come back to haunt him if he fails.
Nevertheless, Trump has a loyal army of voters who share his disdain for experts and economists within the system. His argument that the world is always stealing from America helped him win two rounds of elections.
Trump's two terms are evidence that the benefits of globalization are not universally shared. Many of the decisive swing states won by Trump in 2016 and 2024 are marked by industrial decline. Voters there remember the promises made by previous presidents and believe they were lied to.
If Trump rejects economic orthodoxy and restores prosperity to disadvantaged regions, his contrarian beliefs will be validated, and his legacy will reflect the boldness he has shown.
A political gift for Democrats
Some of the reasons why America has sometimes had lower tariffs than its rivals are the power of the American consumer, the wealth of its own economy, and the reasoning that a free trade system in which the United States is the dominant force makes the country even stronger.
Now it will be much harder for Americans to afford new cars, flat-screen TVs, and even fill their shopping carts every week. If prices rise and inflation increases, consumers could pull back, triggering a recession, and the president will offer Democrats a political gift. Images of his speech in the Rose Garden will fuel thousands of campaign ads for the 2026 midterm elections and the 2028 presidential race.
Trump's vision of trade on "Liberation Day" comes at a time when the turmoil of the past two months could turn voters against Republicans. In one of the first political tests of Trump's second term, a liberal candidate easily won critical elections in Wisconsin that decided the political fate of the state's Supreme Court. It's a clear rebuke for Trump and his ally, Elon Musk, who echoes him.
The Democratic Party is unlikely to miss the opportunity to exploit the failure of Trump's tariff program. Some have already launched attacks. "This is a huge tax on American families, all to help billionaires get a tax cut," said Senate Democratic minority leader Chuck Schumer.
Some Republicans may agree with this statement. Four party senators tried to send a warning to the president on Wednesday evening by voting with Democrats on a purely symbolic measure aimed at blocking tariffs for Canada.
Either way, whether America is heading towards a wall or towards the new golden age that Trump keeps preaching, his party - and every American - will accompany him, willy-nilly.
T.D.