Two weeks into the post-Liberation Day world, global equity markets have endured some of their most volatile trading since the 2020 pandemic shock. The S&P 500 has oscillated wildly on conflicting signals from the White House.
The popular logic of the administration’s position is straightforward, even if the execution has been chaotic: decades of unfair trade practices, currency manipulation, and intellectual property theft by China have hollowed out American manufacturing.
Donald Trump and his supporters see these tariffs as collecting the bill for that hollowing out. The question is whether the disruption of rebalancing, and the long-term harm tariffs are known to cause, worth it.
Where tariffs are imposed, and I feel they should be limited in scope if ever used at all, history suggests that targeted tariffs in conjunction with diplomatic engagement, produce the best outcomes.
The current uncertainty is self-inflicted and unnecessary. But the underlying strategic goal of reshoring critical industries and reducing dependency on Chinese supply chains may be defensible in some cases.
European leaders demanding a coordinated response should look inward first. The EU’s own trade barriers and subsidy regimes are hardly models of free-market rectitude.
A little less virtue-signalling from Brussels and a little more serious negotiation with Washington would serve the global economy considerably better.
Macro Aggressions 