Long: It’s one of the reasons that the U.S. dollar has been the global reserve currency. It’s one of the reasons that during the great financial crisis, people flocked to buy U.S. government bonds—or during the pandemic or even during the first trade war. People still saw the U.S. as the safest place to be. But you’re right, we are really messing with that. And the outcome … I’m not doomsday right now on all of that, but I think, Why are we messing with this? That’s what’s so hard to understand.

Sargent: Well, it’s very hard to understand what he’s thinking. I don’t really buy that he’s got some grand transformational vision in mind. There have been two new polls that are really rough for Trump. The new CNBC poll finds Trump’s overall approval at 44 percent to 51 percent. On the economy, it’s even worse: 43 percent [approval] to 55 percent disapproval, the worst ever in CNBC polling. Meanwhile, the new Reuters poll found his overall approval at 42 percent, and his approval on the economy at 37 percent. Those are rough numbers. I don’t see them going up anytime soon. Heather, barring some instant announcement that all the tariffs are off, is there any reason to think that the factors that are producing this economic disapproval go away?

Long: It’s getting harder by the day to make the optimistic scenario, which, as you outlined, is there’s some “deals” struck within the next month. And then in the meantime, by the end of the summer or the fall, this big tax bill that’s moving through the Republicans in Congress comes through, and that helps to stimulate and helps to revive optimism—at least among the business-owner class. Again, it’s just harder and harder to see how that can happen in a timely manner because Trump is such a believer in one-on-one negotiation and deals. So it’s going to take a long time to negotiate with 50 plus countries, not to mention China, which is really digging in this time.