A Contrarian View
Author: Greg Valliere
April 3, 2025
THE NEARLY UNANIMOUS VIEW THAT DONALD TRUMP’S TARIFFS are a bad idea will bring a fierce blowback.
VIRTUALLY ALL ECONOMISTS AND MARKET EXPERTS AGREE with the now-famous Wall Street Journal headline that this is the “stupidest trade war ever.”
THIS HAS THE POTENTIAL to devastate the Republican Party. Polls show the public overwhelmingly opposes the tariffs, and Trump’s standing on the economy — once his strong suit — is now plunging.
SUDDENLY THERE’S A PLAUSIBLE chance that the GOP could lose the House in the fall of 2026. Republicans on Capitol Hill know this; they begged Trump to soften the tariffs but he made them even tougher.
WON’T THERE BE RETALIATION from U.S. trading partners? Of course — still another reason why virtually everyone in the world will hate this policy. Won’t the American public be patient? Good luck with that.
THE LIKELIHOOD OF A RECESSION IS GROWING, yet the Federal Reserve is in no rush to cut rates — which is sure to enrage Trump. And he can’t count on immediate relief from fiscal stimulus, as Republicans bicker on what will be in the pending tax bill, which could bog down over its cost.
THIS EXPERIMENT WITH DRAMATICALLY HIGHER TARIFFS will be known for decades to come as a colossal failure — just as the Smoot-Hawley tariff experiment is remembered for intensifying the Great Depression in the 1930s.
AMERICAN VOTERS WILL GASP when they see their 401-K statements. Trump and Elon Musk will get most of the blame for this epic blunder, a self-inflicted wound which, ironically, will vilify trade protectionism for decades to come.
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