Team Trump’s self-inflicted trade war disaster

In the highly complex and interwoven arena of international commerce, Team Trump has somehow managed to declare victory after setting the economic house on fire. The White House recently announced tariff rollbacks with great fanfare, hailing their negotiating prowess after plunging global markets into chaos.

This represents a bewildering pattern we’ve witnessed repeatedly: create an unnecessary crisis, partially resolve the problem you manufactured, then claim heroic achievement. It’s akin to a firefighter seeking praise for extinguishing a fire they deliberately set.

Team Trump's reckless trade strategy has caused real economic damage. Global supply chains—complex networks built over decades—are now disrupted. American companies find themselves paralyzed with uncertainty. International markets have experienced significant downturns. Our closest allies feel betrayed. Retaliatory tariffs against American goods continue to harm US exporters.

Despite pulling back from some of their most extreme positions, Team Trump celebrates as though they have engineered a masterful victory. This selective perception ignores the lasting harm inflicted on American businesses, consumers, and our global standing.

Consider the United States’ current position: America now maintains a staggering 24 percent average tariff rate, higher than any other nation on Earth. As former Chair of the Council of Economic Advisers Jason Furman points out, we’ve surpassed even nations like Iran and Venezuela, which maintain rates of 12 and 14 percent, respectively. No country with a population above one million and per capita income even a quarter as high as America’s imposes average tariff rates above 10 percent.

The economic consequences reach everyday Americans in ways many fail to recognize. Brett Schulman, CEO of Cava, the Mediterranean restaurant chain, faces rising costs across his entire operation. Pulp-based paper bowls from Canada, olive oil, and Kalamata olives from Greece are now subject to tariffs. Even construction costs for new locations will likely increase. Schulman aptly describes it in the Wall Street Journal: “It’s like going to a restaurant where the menu keeps changing before you order. No one feels confident making a decision.”

This uncertainty reverberates throughout our economy.

When import taxes hit essential products, businesses must either absorb those costs—reducing profits and limiting growth—or pass them on to consumers. Your Mediterranean lunch bowl grows more expensive not because of market forces but because of deliberately imposed government policies.

Financial Times columnist Gideon Rachman describes the administration’s “mob boss” tactics toward global markets. Trump's White House goons initiated trade conflicts with virtually every major trading partner simultaneously while taking “an axe to the supply chains of many of the world’s leading multinationals.” No coherent strategy guides these actions—neither foreign policy realism nor trade mercantilism can explain such self-defeating behavior.

Perhaps most shocking, these economically destructive policies won’t achieve their stated goals. Trade deficits—Team Trump’s supposed concern—will remain essentially unchanged. Instead, the leadership of the United States made the entire global economy poorer, including ourselves.

The celebration over partial tariff rollbacks exemplifies a disturbing pattern from Team Trumo: create chaos, allow substantial damage, partially reverse course, and then declare victory. This approach only succeeds politically when constituents fail to connect deteriorating economic conditions with the policies causing them.

Americans deserve trade policies crafted with strategic foresight, economic literacy, and diplomatic skill—not impulsive decisions that harm our prosperity and standing in the world. Our current approach resembles a child knocking over a Monopoly board, slamming his feet, scattering a few pieces back onto it, then claiming championship status. The economic security of millions demands better than theatrical negotiations that leave us all worse off.

Enjoy the ride + Plan accordingly.

-Marc

Trump's trade war: Creating chaos + Claiming victory

In a bewildering display of global economic management, Team Trump has once again employed its signature strategy: create a crisis, partially resolve it, and then declare an unprecedented victory.

The recent trade chaos, which Team Trump will undoubtedly declare "The Art of the Deal," reveals an unprecedented pattern of governance emanating from 1600 Pennsylvania Avenue through manufactured chaos.

After threatening massive tariffs that sent global markets into a nosedive, Team Trump has now pulled back on some measures while maintaining others—then declared this retreat a masterful negotiation.

The reality is far more concerning.

The economic costs of this approach have been substantial. The administration triggered a cascade of market disruptions by abruptly announcing sweeping tariffs against virtually all major trading partners simultaneously. American companies found themselves scrambling to adjust supply chains built over decades. Construction projects faced sudden cost increases. Restaurants like Cava began calculating how tariffs on everything from Canadian paper bowls to Greek olive oil would affect their bottom line.

"It's like going to a restaurant where the menu keeps changing before you order," Brett Schulman, Cava's CEO, was quoted in the Wall Street Journal. "No one feels confident making a decision."

This uncertainty is what businesses fear most—it paralyzes investment, delays expansion, and ultimately costs jobs.

Even with the partial pullback, the United States has positioned itself as an outlier in global trade policy. As economist Jason Furman points out, "We are now at a 24 percent average tariff rate, making the US the highest tariff country in the world—leapfrogging pikers such as Iran and Venezuela with average rates of 12 and 14 percent, respectively."

Heaby-handed tariffs like this are unprecedented territory for an advanced economy. No other nation with our level of prosperity maintains such protectionist barriers.

Team Trump's approach defies conventional economic wisdom across the political spectrum. No coherent school of thought—whether from conservative free-market proponents or progressive economists—supports simultaneously antagonizing every major trading partner.

As Gideon Rachman in the Financial Times aptly described, the White House has "taken an axe to the supply chains of many of the world's leading multinationals."

What's particularly troubling about this approach is that it likely won't achieve its stated goals. Trade deficits—Trump's obsession—typically reflect macroeconomic factors like savings and investment rates rather than trade barriers. The most probable outcome is not a manufacturing renaissance but higher prices for American consumers and businesses.

Consider your Mediterranean lunch bowl at Cava. When import taxes hit olive oil, feta, and tahini, restaurants must pass those costs to customers. Team Trump touts these tariffs as "protecting American jobs," but the reality is more expensive meals, furniture, and appliances.

Our allies, meanwhile, watch with growing concern. Nations that have been steadfast partners now face unexpected economic aggression from their most important ally. Many have already announced retaliatory measures, creating a spiraling cycle of protectionism that historical evidence suggests will leave everyone worse off.

The trade conflicts also distract from opportunities for genuine economic cooperation on issues like intellectual property protection, market access, and technology transfers—areas where targeted, multilateral approaches might yield real benefits.

What makes this approach particularly dangerous is its unpredictability. Markets function best with clear rules and expectations. When policy becomes erratic—shifting dramatically based on presidential whims rather than careful analysis—the economic consequences extend beyond immediate price changes to long-term investment decisions and strategic planning.

By declaring victory after creating a crisis of its own making, Team Trump demonstrates a fundamental misunderstanding of leadership. True negotiating strength comes not from threatening allies or disrupting established systems but building coalitions around shared interests and values.

As consumers soon discover the real costs of these policies at restaurants, car dealerships, and retail stores, the supposed victory will reveal itself as merely a retreat from a self-inflicted wound—one that leaves lasting economic scars while solving none of the underlying challenges it purported to address.

Enjoy the ride + Plan accordingly.

-Marc

The actual cost of Trump's trade war: How 104% tariffs will strangle American businesses

The Trump administration will impose a 104% tariff on Chinese imports at midnight tonight.

This new economic reality doesn't just represent a policy shift—it will create a financial tsunami for American businesses caught in the undertow. When Team Trump grandstands about getting tough on trade, they rarely mention the small business owner who watches their profit margins vanish overnight or the consumer who pays double at checkout.

Consider this straightforward example: A typical wholesale product priced at $50 suddenly carries an additional $52 tariff burden, transforming its landed cost to $102 before accounting for shipping, warehousing, or marketing expenses. This mathematical reality demolishes business models across the country without fanfare or headlines.

It is no wonder Elon Musk called Trump's top trade adviser Peter Navarro a 'moron' and 'dumber than a sack of bricks.'

These overnight dramatic cost increases will destroy the careful economic calculations that power the American economy. For the restaurant equipment supplier in Milwaukee, the furniture store in Buffalo, or the bicycle retailer in Detroit, such tariffs don't punish foreign competitors—they punish American entrepreneurs who built businesses on reliable supply chains and long-term cost expectations.

Many small businesses you frequent and support in your hometown operate on margins thinner than most Americans realize. Your neighborhood hardware store might maintain just 15-20% profit margins, making doubling wholesale costs catastrophic rather than merely challenging. When politicians speak of tariffs as "getting tough," they ignore the impossible choices forced upon small business owners: drastically raise prices, slash quality, lay off workers, or close entirely.

This economic ripple effect will extend far beyond local small businesses. More prominent American manufacturers dependent on Chinese components face similar dilemmas when their supply costs skyrocket. Consider a Midwest factory producing e-bikes with imported motors, which now confronts component costs exceeding the previous retail price of its finished goods. This manufacturing disruption will create economic instability that tariff proponents claim to address.

Team Trump will argue that businesses can source elsewhere, but this oversimplification ignores market realities.

China's manufacturing ecosystem has developed over decades, combining specialized expertise, infrastructure, and economies of scale that are unmatched in most regions. Shifting supply chains requires years, not months, leaving small businesses vulnerable during transition periods when competitors might gain decisive market advantages.

The historical precedent of the US government using tariffs paints a sobering picture. When steel and aluminum tariffs were implemented in 2018, studies from the Federal Reserve found they directly contributed to reduced manufacturing employment and higher consumer prices. Far from strengthening American industry, these tariffs weakened the sectors they intended to protect by increasing input costs across industrial supply chains.

The psychological impact on business planning creates additional damage.

Uncertainty paralyzes investment decisions, expansion plans, and hiring initiatives. Headlines are already highlighting slowing employment and investment decisions, and this is all before this 104% tariff rate has been implemented. When small businesses cannot predict their cost structures six months ahead, they rationally retreat to defensive positions—preserving cash, delaying improvements, and avoiding commitments that might prove fatal under shifting trade policies.

For consumers, these tariffs will manifest as inflation by another name.

The family shopping for summer camp supplies or household necessities will experience price increases indistinguishable from other inflationary pressures. Tariffs effectively function as a regressive tax, hitting working families hardest while offering no corresponding benefit to most American workers.

Team Trump's proposed 104% tariffs don't represent tough negotiating positions or strategic trade policy.

They represent a fundamental misunderstanding of global commerce's functioning in the 21st century.

When a wholesaler watches their $50 product transform into a $102 liability overnight, the damage occurs not in foreign capitals but in American communities where businesses struggle, workers lose jobs, and consumers pay the ultimate price for economic policies that mistake punishment for progress.

Enjoy the ride + plan accordingly.

-Marc