Trump trolls ‘tariff terrorism’ talk as US markets tank
The TOI Correspondent from Washington: American stock indices tanked “bigly” the morning after the MAGA supremo Donald Trump’s “tariff terrorism” but the US President remained upbeat about the eventual outcome of his tectonic trade gambit amid the market meltdown.
“THE OPERATION IS OVER! THE PATIENT LIVED, AND IS HEALING. THE PROGNOSIS IS THAT THE PATIENT WILL BE FAR STRONGER, BIGGER, BETTER, AND MORE RESILIENT THAN EVER BEFORE,” the Tariff emperor posted in all caps, deploying his minions, some of them skeptical, for damage control. White House officials spread out to preach Trump’s gospel of reciprocal tariff and how it would bring trillions of revenue to the US, billions in foreign investment, millions of jobs etc. There were few believers and many bolted the stock market.
The NASDAQ index plunged by almost 5 per cent and the Dow and S&P by 4 per cent moments after the trading opened wiping out some $2 trillion in market wealth as most analysts piled on to the President for “detonating” a tariff bomb on the US and the world, even as Trump declared a national economic emergency.
The banner headline in the NewYork Post read: World War Fee!
“Never before has an hour of Presidential rhetoric cost so many people so much… The best estimate of the loss from tariff policy is now is closer to $30 trillion or $300,000 per family of four,” said former treasury secretary Lawrence Summers.
And from a Democratic Party unit: Tariffs are ECONOMIC TERRORISM—crushing small businesses, jacking up prices, and killing jobs. They’re anti-capitalist, anti-free market, and pure sabotage, plain and simple.
Trump officials fought the dominant negative narrative and essayed positive spin to reassure panicked Americans. Treasury Secretary Scott Bessent said the tariffs were part of a negotiating process and urged countries not to react dramatically.
“My advice to everyone is do not retaliate. Sit back. Take it in. Let’s see how it goes. Because, if you retaliate, there will be escalation. If you don’t retaliate, this is the high water mark,” he said. Trump’s son Eric pitched in with call for urgent talks: I wouldn’t want to be the last country that tries to negotiate a trade deal with@realDonaldTrump. The first to negotiate will win – the last will absolutely lose.”
But even some of Trump’s legislative allies were skeptical of the tariff bonanza the President promised. “In the long run, he’s right. But … in the long run, we’re all dead. Short run matters too. Nobody knows what the impact of these tariffs is going to be on their economy,” conceded one GOP senator on tv before ramping up a defense.
Trump’s former vice-president Mike Pence was among those who trashed the tariff gambit. “The Trump Tariff Tax is the largest peacetime tax hike in U.S. history. These Tariffs are nearly 10x the size of those imposed during the Trump-Pence Administration and will cost American families over $3,500 per year. Check Out “Spoiling America’s Golden Age,” he posted, with a link to a critique from a think tank he has founded.
Supporters argued that in fairness, Trump has done what he promised to do almost 40 years ago. Commerce Secretary Howard Lutnick posted an Oprah interview with Trump from 1988 where he complains — almost verbatim to his remarks as President — about the US being ripped off by foreign countries and the need to staunch the bleeding.
But the premise of his argument is as false today as it was in then, many analysts are pointing out. It was the US which dragged a reluctant India, and much of the developing world, kicking and screaming into globalization. And now he is complaining that they ate America’s lunch based on dodgy statistics, dubious claims and outright falsification which even the US press — save the MAGA media — is exposing.
Among them: Trump claiming that US trade deficit with India is $100 billion (it is in the region of $ 45 billion) and that India has a 70 percent tax on American motorcycle (it is 40 percent, and companies like Harley Davidson got around that by assembling in India, which is what many European and Asian car makers are doing in the US, boosting jobs in America).
In fact, Trump’s whole treatise on India’s 52 percent Tariff Rate on US seems dodgy. According to the World Trade Organization (WTO), India’s average tariff in 2023 was around 17 percent, with agricultural goods at 39percent and non-agricultural goods closer to 14 percent. The overall trade-weighted average was 12percent compared to 2percent by the US. So while there may be a case for leveling the playing field, Trump’s MAGA supporters have an easy explanation for the wild exaggeration and discrepancies in the numbers: It’s a negotiating tactic straight out of Art of the Deal.
