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
