Trade wars are neither good nor easy to win: President Donald Trump's famous first-term mantra, "trade wars are good, and easy to win," was already proven false several years ago, but he appears to have learned no lessons, and may even be doubling down. At least back in the halcyon days of Trump round one, he could be relied on to care about market indicators of his success. Now, he genuinely appears to be pursuing a weaker dollar, slapping tariffs on America's biggest trading partners, and seems more immune to worries about whether markets will greet his policies favorably.
"Wall Street's done great," Treasury Secretary Scott Bessent said Tuesday, "but we have a focus on small business and the consumers. So we are going to rebalance the economy." (Sounds like central planner talk.)
"Investors entered 2025 optimistic that an already strong U.S. economy could get an extra boost from an administration pushing market-friendly tax cuts and regulatory rollbacks," reports The Wall Street Journal. "Instead, trade tensions and signs of slowing growth have driven major indexes lower in recent weeks. The declines accelerated this week as Trump imposed 25% tariffs on the U.S.'s major trading partners—forcing investors to rethink how serious he is about pursuing a broadly protectionist agenda." (Even his imposition of tariffs has been unpredictable, full of baits and switches. Last month, he announced tariffs on Canada, Mexico, and China, only to delay the Canada and Mexico ones—and the full China tariff amount—for a month before finally imposing them this week. Then, when U.S. automakers expressed concern over higher prices, he announced that he would exempt them from the Canada/Mexico tariffs—but only for one month.)
