The article highlights the significant economic repercussions of Donald Trump's new tariffs, emphasizing concerns that they could lead to a global trade war and market crash. While Republican supporters argue that any short-term pain will be justified by long-term gains, evidence suggests that these tariffs may cause more harm than good. The piece criticizes Trump's historical justification for tariffs as misleading, warning that the current scenario mirrors the detrimental effects of the Smoot-Hawley tariffs of the Great Depression era.
In making the case for his policy on Wednesday, Trump offered up some typically nonsensical history, saying, "In 1929, [an era of prosperity] came to a very abrupt end with the Great Depression, and it would have never happened if they had stayed with the tariff policy, would have been a much different story." This contravenes historical evidence showing that tariffs contributed to the Great Depression's depth.
The short-term pain is easy to see: The stock market dropped by 6 percent, losing $3.1 trillion in value. This is the steepest decline since March 2000, when the global economy was spooked by the rapid spread of Covid.
In other words, far from remodeling the house, Trump is firebombing the entire neighborhood. The repercussions of these tariffs may lead to a crash comparable to 1929 or 2008.
Republican Senator Tim Sheehy spelled out the argument on CNN, 'There's absolutely going to be short-term pain.... If you're going to remodel your house to make it better in the end, it's going to be really annoying in the short term when your house is getting remodeled and there's drywall dust everywhere and there's workers in your living room.'
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