What The Hell America!

As markets panic and the public braces for economic apocalypse in the face of the new US tariff regime, both Donald Trump’s allies and detractors have the same message: there is a grand plan here.

As Trump rolled out his first, massive wave of “reciprocal” tariffs on the entire world — tariffs that were often entirely out of proportion with the duties many countries slap on US goods, and which hit even friendly states that have free trade deals with the United States — critics insisted, to vehement denials from Trump officials, that this was all a negotiating tactic that would soon see a U-turn. Then, when Trump did abruptly retreat, announcing a ninety-day pause and reveling in world leaders begging him to negotiate, it was time for Trump officials and allies to claim it had all been part of a master plan of dealmaking.

“You have been watching the greatest economic master strategy from an American President in history,” said Trump’s deputy chief of staff Stephen Miller.

“Many of you in the media clearly missed The Art of the Deal,” said White House press secretary Karoline Leavitt.

But it might be time for both Trump’s fans and his critics to face up to a more worrying idea: that whether you like the tariffs or not, there is little coherence to the White House’s approach here, which is often at odds with its wider foreign and domestic policy. And this lack of a concerted plan could lead to the whole program’s self-destruction, if not cause bigger problems for the United States.

For instance, is the goal of the tariffs to isolate China on the world stage while also decoupling the US economy from it? If so, the sudden, 125 percent tariff Trump announced on the country’s goods doesn’t look like an effective way to go about it. China is not only the third-largest US trading partner but is intimately tied into the supply chains of many vital goods — the number of products the United States relies on Chinese imports for nearly quadrupled between 2000 and 2022, while the equivalent figure for China halved. A tariff rate this high, which China has now struck back with in return, effectively makes trade between the two countries economically impossible, and that will blow back on the United States, potentially worse than it will hit China.

In theory, the United States might be able to rapidly reorient its trade with other countries to fill at least some of the gaping Chinese-shaped hole this will leave in the US economy. But Trump is also simultaneously levying tariffs against the entire non-Chinese world; is still embroiled in a war with Russia, another top commodities producer sitting on reserves of the rare earth minerals key to supply chains; and has spent months antagonizing Europe and the United States’ two largest trading partners, Mexico and Canada, which he is currently threatening to bomb and annex, respectively. All of that makes the task of quickly replacing the US-China trade relationship much harder.

Meanwhile, Trump’s moves are doing the opposite of isolating China, which is a key geopolitical goal for the administration. Europe and Beijing have now entered talks to replace the tariffs on Chinese electric vehicles the European Union put in place last year in part under US pressure meant to keep the two at arm’s length, an effort that seems to be part of a wider softening of EU-China relations.

Beijing is also in talks with Japan and South Korea, both US allies that are supposed to be reliant on the United States to balance against China, to craft a response to Trump’s original tariffs (which theoretically will go back into place in just three months), holding their first economic talks in five years. Southeast Asian countries, which have already registered deepening doubts about US global leadership, are likewise holding talks with Chinese officials, as Western-oriented analysts warn the US tariffs risk pushing them closer to China.

Or is the goal to reshore US manufacturing? If so, both experts and industry representatives are warning that the sudden, blanket, and aggressive nature of the tariffs is, ironically, going to make that more difficult, given the United States’ ongoing dependence on Chinese imports.

Factories don’t just sprout out of thin air: they need materials and machinery, all of which are suddenly much more expensive as a result of these tariffs. They also need someone to put up the money to build them, which many firms don’t want to do right now for a host of reasons, including the dampened consumer sentiment and heightened economic uncertainty caused by the erratic tariff rollout.

They also need workers, something which the United States doesn’t always have enough of. That’s the case for both for certain key industries that rely on specific skilled labor, like pharmaceuticals — something we saw with Joe Biden’s attempts to jump-start US microchip manufacturing — but also for manufacturing more generally, which needs all kinds of skilled workers who don’t exist right now in the US workforce in the numbers that are needed. US firms could hire those workers from overseas, but that will be hampered by Trump’s broader immigration crackdown, which is seeing people denied or stripped of their visas for their political opinions, or thrown into detention facilities for weeks and even into a dangerous federal prison because of bureaucratic errors.

Even without all of these issues — including the fact that, as one industry member recently admitted, the knowledge to manufacture certain items like bicycles simply doesn’t exist in the United States anymore — this would all still take a long time. The process of building a manufacturing facility takes years, sometimes an entire decade, with countless veto points between buying the land to build on and holding a ribbon-cutting ceremony. There is a very real chance that by using tariffs as a blunt-force tool, Trump could cause an economic slowdown — a risk Trump is reportedly conscious of and willing to take — that leads firms to hunker down and avoid expanding.

This could possibly be overcome by having the government take a direct role in spurring private sector investment and overseeing industrial expansion, which is a big part of the story of how China became the manufacturing powerhouse it is. But this is running aground on the Trump administration’s pursuit of a radical anti-government agenda on the domestic front, which combines harsh austerity and revenue-depleting tax cuts for the rich with a dismantling of state capacity through the Department of Government Efficiency (DOGE) program of mass firings.

Among DOGE’s victims have been one-third of the staff at the office responsible for doling out Biden’s CHIPS Act money to jump-start chip manufacturing, and now, reportedly, the Department of Energy. According to Heatmap, thousands of the department’s employees could be gone in the next few weeks, undermining US efforts to build new power capacity and emptying out offices responsible for giving loans to industrial firms and bolstering manufacturing. This is at the same time that the Trump administration is, for seemingly no other reason than spite, looking to axe billions of dollars’ worth of grants, loans, and subsidies enacted under Biden to stimulate renewable energy and other projects. Ironically, this would hand China, already dominating the world in renewable technology, a major win.

You might also ask the question of how this current strategy squares with Trump’s other goal of preventing long-standing efforts to wrest global reserve currency status from the US dollar. George Saravelos, Deutsche Bank’s global head of foreign exchange research, warned that even though Trump reversed course on his initial tariff program, the damage has been done, and now “the market is re-assessing the structural attractiveness of the dollar as the world’s global reserve currency and is undergoing a process of rapid de-dollarization.”

Trump viewed this very prospect as such a threat, he repeatedly threatened the BRICS countries (Brazil, Russia, India, China, and South Africa) with 100 percent tariffs if they dared to try launch their own rival currency. But this threat carries less teeth now, since Trump is already sanctioning one BRICS country, Russia, to the hilt and just hit their single biggest member, China, with a 125 percent tariff.

For those same reasons, Trump also has less room for maneuver to retaliate against de-dollarization efforts: while the United States absorbs the economic shock of all-out trade war with China, it can’t exactly afford to do the same with India, its twelfth-largest trading partner, or Brazil, a major destination for US exports and a country that Washington is already anxious is deepening relations with Beijing. Both countries also happen to be right behind China in terms of reserves of rare earths at a time when Trump is effectively forfeiting US access to Chinese supply of these commodities.

Meanwhile, it is highly likely the tariffs will force the US government to throw a major financial lifeline to US industries, above all the farming sector, which heavily depends on trade with China and has already been seeing an uptick in bankruptcies. It has to do this at the very least for political reasons, if not economic ones.

Yet this rubs up directly against the vehement opposition within Trump’s White House to more government spending and, especially, “bailouts,” resisting which Trump’s influential Office of Management and Budget director Russell Vought has made central to his political identity. The administration is insisting this won’t need to happen, because “the realignment of the economy will result in an unprecedented air of prosperity for all Americans, but especially for our farmers and our ranchers.” But if this is what the White House genuinely believes, it points more to magical thinking than a realistic strategy for a path forward.

As for Trump’s public claims that these tariffs will generate the revenue to pay for his massive tax cuts to the rich and even pave the way to abolishing the income tax altogether — all as he dismantles vital government services in the name of tackling runaway deficits — this is an obvious paradox: if the tariffs really do eliminate US trade deficits and turn the country into a net exporter, then that will, by its very nature, mean less revenue coming in from tariffs to pay for things like trillion-dollar military budgets.

In short, despite Trump and his advisers’ insistence of a grand plan, Trump’s tariff rollout instead seems exactly as improvised, disjointed, and ad hoc as his critics say. They clash with his own big-picture geopolitical and domestic policy goals while potentially undermining the very revival of US manufacturing that is meant to justify them.

The goals of bringing US manufacturing back to life, reshoring jobs, and protecting American producers may be laudable and worth pursuing. But if this is the Trump administration’s plan for doing so, it may be sowing the seeds for its own failure.