Trump’s Day of Reckoning

by | Apr 4, 2025 | The Atlantic

Updated at 8:25 p.m. ET on April 2, 2025

President Donald Trump said he pushed his so-called Liberation Day from yesterday to today to avoid April Fool’s Day—“because then nobody would believe what I said.” Now, instead of falling on a date devoted to pranks, Trump’s announcement about a new wave of reciprocal tariffs comes at a moment when his White House is facing a sobering reality.

Last night, Republicans took a double-digit loss in a closely watched Wisconsin election—a campaign that became a referendum on top Trump adviser Elon Musk—and had to sweat out wins in a pair of deep-red Florida House districts. The first major scandal of Trump’s second term, his team’s use of Signal to discuss sensitive military attack plans, could spawn an independent investigation. Some influential MAGA luminaries and immigration hawks have begun to criticize the administration’s deportation tactics for lacking due process. Consumer prices aren’t falling, but the stock market sure is. And as Trump moves to escalate his trade war, fears of a recession are rising.

For the first time since Trump reclaimed the White House, some of his close allies and aides are privately acknowledging that a president who returned to office after a historic political comeback has been knocked off his stride. They admit that the past two weeks—particularly the Signal scandal, which has led some congressional Republicans to defy Trump and demand a probe—have been the most challenging of his term.

For months now, Trump has tried very hard to make “Liberation Day” a thing. Soon after his January swearing-in, he christened the day as the moment when he would enact reciprocal tariffs on major trading partners, particularly those that contribute the most to the $1.2 trillion U.S. trade deficit. He first eyed holding the day in February but pushed back the implementation of the levies to April 1—the date by which he ordered the Treasury Department and the Commerce Department to complete studies on what the policies might look like in practice—before nudging it one more day.

[Read: Wisconsin’s message for Trump ]

At 7:06 eastern time this morning, Trump saluted the occasion on Truth Social: “IT’S LIBERATION DAY IN AMERICA!” But the more telling post had come six hours earlier, at nearly 1 a.m. EST. Trump advisers have long told me that the clearest revelations about the president’s frustrations and insecurities come late at night, when he is alone with his phone. In this case, his anger was directed at four fellow Republicans—Senators Mitch McConnell, Susan Collins, Lisa Murkowski, and Rand Paul—who he said were being “extremely difficult to deal with and unbelievably disloyal” by opposing tariffs on Canada. “What is wrong with them, other than suffering from Trump Derangement Syndrome, commonly known as TDS?” Trump wrote.

Trump, used to tightly controlling the GOP during partisan fights, was furious that he was not getting a united Republican front for his prized tariffs, two White House officials and a close outside ally told me, granted anonymity to discuss internal conversations.

While those four Republicans have gone public with their misgivings about the tariffs, many others have quietly expressed concerns to colleagues and reporters, or tried to lobby the White House for carve-outs that would spare their state’s constituents or favored industries. Business leaders who thought Trump was largely bluffing with his trade-war talk (the tariffs in his first term ended up being milder than expected) have also tried to lobby the president or Chief of Staff Susie Wiles to ease up, the White House officials told me.

Trump has vacillated on the size and targets of the tariffs—they were still being settled in the hours before the Rose Garden announcement, one of the White House officials confirmed to me—but never on whether to impose them. Trump assigns outsize weight to the stock market when judging the nation’s economy, but even tumbles on Wall Street have not dissuaded him. Trump possesses few consistent political ideologies but has promoted tariffs since the 1980s as a means to reduce trade deficits and spur U.S. manufacturing, and he has dismissed economists’ warnings that they would drive up prices for Americans and potentially stagnate the nation’s economy.

[Read: The Trump administration accidentally texted me its war plans ]

“Republicans are crashing the American economy in real time and driving us to a recession. This is not Liberation Day; it’s Recession Day,” House Minority Leader Hakeem Jeffries told reporters in the Capitol today.

The pushback to his tariffs has not been the only source of ire for Trump during a sudden eruption of negative headlines. Democrats seized on the results in three off-year elections yesterday, held just 70 days into Trump’s term. Although Republicans won both special elections to fill vacant Florida congressional seats, both winning candidates earned about 20 percent fewer votes than Trump did in those same districts in November. Of note: In the ruby-red Florida panhandle, Escambia County went Democratic for the first time in any national election since 1992—a result, many political observers have said, of the Trump administration’s cuts to Veterans Affairs programs in a region with many military families.

The face of those cuts, of course, is Elon Musk, whose Department of Government Efficiency has chainsawed its way through the federal bureaucracy on Trump’s orders. And Musk—whose personal poll numbers have been cratering along with Tesla’s stock—received much of the blame for the outcome of yesterday’s Wisconsin state-supreme-court election. The world’s richest man threw himself into the race with his time and fortune, declaring that “humanity’s destiny rests” on the outcome. Despite the lofty stakes, Musk’s preferred candidate lost by 10 points.

Some in Trump’s orbit hope that the loss might represent the beginning of the end of Musk’s influence. For weeks, Republicans in Congress have quietly complained to the White House that Musk’s often indiscriminate cuts are making them the target of voter anger. Cabinet secretaries’ complaints also led Trump to somewhat rein in his billionaire aide. Trump has told advisers in recent days that Musk will begin winding down his time in the White House in the weeks ahead, likely when his 130-day window as a “special government employee” runs out at the end of next month, according to the two White House officials.

“Musk’s ‘sell by date’ is rapidly approaching,” the outside ally wrote to me. “He was a heat shield for a time. Now he’s a heat source.”

[Read: Is DOGE losing steam? ]

Trump has at times chafed at Musk’s more politically incendiary comments, such as his declaration that Social Security is “the biggest Ponzi scheme of all time.” But the president, according to the two White House officials, has told advisers that—at least for now—he plans to have Musk remain in his orbit even after he leaves the administration.

Trump has recently taken to phoning allies late at night to complain about a series of negative stories, according to the outside ally and another person who has received such calls. He remains angry at National Security Adviser Mike Waltz for inadvertently adding Jeffrey Goldberg, the editor in chief of The Atlantic, to a Signal chat about attack plans to strike Houthi rebels in Yemen. He has resisted firing Waltz so as not to be seen as giving in to the media, though he has fumed about Waltz having Goldberg’s number in his phone. Having pledged to bring a quick end to wars in both the Middle East and Ukraine, Trump has watched as a cease-fire in Gaza has been shattered and as Vladimir Putin has refused to agree to American terms to bring a temporary halt to the fighting in Europe. And although Trump has delighted in the showy deportations of alleged gang members to a notorious El Salvador prison, he was annoyed that friendly media voices including Joe Rogan questioned a lack of due process, and that the right-wing pundit Ann Coulter openly balked at the arrest of a Columbia University graduate student who led pro-Palestine protests.

Asked whether the White House was concerned that Trump’s political momentum might be stalling, Karoline Leavitt, his press secretary, told me in a statement: “President Trump has accomplished more in 72 days than any president in four years” and that he is “just getting started—there’s more work to do to clean up the crises of the incompetent Biden-Harris Administration.”

But the administration is clearly hoping that Liberation Day will reset the political narrative.

Trump has “spent a lot of political capital in his first 100 days, but Republicans will see it as a good investment if he can ultimately deliver on tax cuts and deficit reductions,” Alex Conant, a GOP strategist who worked in President George W. Bush’s White House and on then-Senator Marco Rubio’s presidential campaign, told me. “But recessions and inflation are politically devastating for any president. Trump is risking both with his trade wars, so it’s understandably making his allies extremely nervous.”

In a tacit acknowledgment of the skepticism the tariffs are generating, the White House pushed back the Rose Garden event from early afternoon until after the markets had closed.

Click here to see original article

Trump’s Tariffs Are Designed to Backfire

by | Apr 4, 2025 | The Atlantic

This article was featured in the One Story to Read Today newsletter. Sign up for it here.

According to President Donald Trump, April 2, 2025—the day he unveiled his executive order implementing global tariffs—will be remembered as a turning point in American history. He might be right. Unfortunately, April 2 is more likely to be remembered as a fiasco—alongside October 24, 1929 (the stock-market crash that kicked off the Great Depression), and September 15, 2008 (the collapse of Lehman Brothers)—than as the beginning of a new era of American prosperity.

The stated rationale behind Trump’s new “reciprocal tariffs” has a more coherent internal logic than Trump’s previous tariff maneuvers. (Stated, as we will see, is the key word.) The idea is that other countries have unfairly advantaged their own industries at the expense of America’s, both through tariffs and through methods such as currency manipulation and subsidies to domestic firms. To solve the problem, the U.S. will now tax imports from nearly every country on the planet, supposedly in proportion to the barriers that those countries place on American goods.

The goal, according to senior administration officials, is to pressure other countries into removing their trade barriers, at which point the U.S. will drop its own. In his Rose Garden speech announcing the tariff order, Trump demanded that foreign countries “terminate your own tariffs, drop your barriers,” and “don’t manipulate your currencies” if they hoped to get a reprieve from tariffs. Treasury Secretary Scott Bessent has even argued that many of the new tariffs won’t ever need to go into effect, because other countries will be so quick to comply. In this telling, Trump’s reciprocal measures represent the tariff to end all tariffs, paving the road to a system of genuinely free trade and a return to American industrial dominance.

But the logical consistency, such as it is, is only internal. When the new tariffs come into contact with external reality, they are likely to produce the exact opposite of the intended outcome.

[Jonathan Chait: The good news about Trump’s tariffs ]

Most obviously, the tariffs don’t appear to be based on actual trade barriers, which undermines their entire justification. Contrary to White House messaging, the formula for determining the new rates turns out to have been based simply on the dollar value of goods the U.S. imports from a given country relative to how much it exports. The administration took the difference between the two numbers, divided it by each country’s total exports, then divided that total in half, and slapped an import tax on countries at that rate. The theoretically reciprocal tariffs are not, in fact, reciprocal.

The result is that there is no clear or obvious path that countries could take to get those tariffs removed even if they wanted to. Countries can remove all of their trade restrictions and still run a trade surplus. South Korea, Mexico, and Canada, for example, export more to us than they import from us despite imposing virtually no trade barriers. As The New York Times reported , “Trump’s decision to put a 32 percent tariff on Switzerland stunned politicians and business leaders in the Alpine country. Switzerland has an open trade policy and recently abolished all industrial tariffs, including on goods from the United States, which is also its largest export market.”

Even if other countries did figure out ways to shrink their trade imbalances with the U.S., that still wouldn’t necessarily lead to a reprieve: Trump imposed 10 percent tariffs even on countries, like Brazil, that import more from America than they export to it. The only thing the White House has made clear is that any decision to remove or raise tariffs will be made by Trump himself. “These tariffs will remain in effect until such a time as President Trump determines that the threat posed by the trade deficit and underlying nonreciprocal treatment is satisfied, resolved, or mitigated,” read the White House’s memo on the new order. Translation: The only way you will get a tariff reprieve is by groveling at Trump’s feet.

To see the impossible choices that Trump’s tariffs impose on other countries, consider the trade restrictions that the administration accuses the European Union of maintaining against American products. These include food-safety regulations that ban certain ingredients, digital sales taxes, and the value-added tax—the European equivalent of a national sales tax that funds much of its members’ welfare programs. Calling most of these “trade barriers” in the first place is nonsensical, because they apply equally to foreign and domestic goods. The upshot is that, in order to meet Trump’s demands for tariff removal, Europe would need to overhaul not only its trade practices but much of its tax and regulatory system.

The best way to predict how countries will react to Trump’s newest tariffs is to look at how they responded to earlier ones. China and Europe quickly met past Trump tariffs with steep retaliatory measures of their own. Even in a friendly country as dependent on U.S. trade as Canada, Trump’s threats have generated a surge of anti-American nationalism that has upended the country’s domestic politics. “The idea that foreign leaders are going to commit political suicide to give Trump what he wants is crazy enough,” Scott Lincicome, the director of general economics and trade at the Cato Institute, told me. “The idea that they’d do it with basically no guaranteed upside just completely boggles the mind.”

[Scott Lincicome: How Republicans learned to love high prices ]

Trump’s newest tariffs have already sparked widespread outrage among America’s trading partners. The head of the European Union has said that the body has a “strong plan to retaliate” against Trump’s reciprocal tariffs, and multiple individual European countries are considering their own additional retaliatory policies. France has floated the idea of expanding the trade war beyond physical goods by targeting U.S. tech companies. China vowed to take countermeasures against what it described as “self-defeating bullying.” Brazil’s president is considering retaliating, and the country’s National Congress, which includes many vocal right-wing supporters of Trump, recently approved legislation to empower him to do so.

If that pattern holds, Trump’s tariffs are likely to backfire. The result will be a one-way ratcheting up of tariffs across the globe, creating a trade wall between the U.S. and the rest of the world and indefinitely raising the cost of all imports.

Trump seems to welcome that possibility. During his Rose Garden address, which was titled “Make America Wealthy Again,” the president spoke at length about outcomes that are likely to occur only if the U.S. does not lower its tariffs, such as bringing in “trillions and trillions” of dollars of revenue and forcing companies to open factories inside the U.S. to avoid the new barriers. He sounded much more like someone who expected the tariffs to stay in place indefinitely than someone using them as a negotiating tactic.

In theory, the flip side of sustained higher prices would be a boost to American manufacturing, as consumers choose to purchase domestic goods over foreign ones. But here again, reality might laugh at the theory. About half of all U.S. imports are inputs that go into our own manufacturing production, meaning that American companies will suffer from higher prices too, even as retaliatory tariffs make it harder to sell their products abroad.

Perhaps the greatest damage will result from global uncertainty. After weeks of economic chaos, Trump’s big announcement was supposed to finally provide some clarity, allowing businesses to plan for the future. Instead, the future is more cloudy than ever. No one knows which of the tariffs will stick and which will be lifted. Countries will appeal to Trump to get their tariffs removed. Industries will lobby for carve-outs. The White House has announced no clear system for removing or reducing the tariffs, and even if it did, the ultimate choice will lie with the president himself, who is not known as a model of consistent and predictable decision making. These are the makings of an economic slowdown. “I would be shocked if we make it through next year without a recession,” Kimberly Clausing, an economist at the UCLA School of Law, told me.

[Rogé Karma: The job market is frozen ]

What makes the new reciprocal tariffs all the more baffling is that a much less risky method exists to get other countries to agree to free trade. It is called a free-trade agreement. Trump ought to know. In his first term, his administration negotiated the United States–Mexico–Canada Agreement, or “New NAFTA,” which lowered trade barriers between America and its neighbors while requiring all parties to abide by higher labor and environmental standards. The Trans-Pacific Partnership, a trade deal negotiated by the Obama administration between the U.S. and 11 countries, including Vietnam, Japan, Singapore, and Malaysia, would have done something similar if Trump hadn’t pulled the U.S. out of the deal upon entering office in 2017. Those are some of the same countries that he is now trying to tariff into submission. He would have been better off remembering the art of the deal.

Click here to see original article