A Washington Post editorial voices criticism of Trump’s policy and comments about tariffs.
“The market never lies. It is often mistaken, as it was during the post-election honeymoon, when investors seemed to assume Donald Trump didn’t really mean it about tariffs. But it always tells you exactly what it thinks.”
“Right now, it is thinking that the stiff tariffs Trump has imposed will cost American companies, and the economy, dearly. Markets have plummeted since Trump announced new levies on Canada, Mexico and China, erasing nearly all gains since his election. The president might think that “trade wars are good, and easy to win,” but investors disagree.”
“In this, they reflect not only the consensus among economists but also the realities facing American businesses and consumers.”
“’Customers are pausing on new orders as a result of uncertainty regarding tariffs,’ a transportation equipment company reported. ‘The incoming tariffs are causing our products to increase in price,’ a machinery manufacturer said. A maker of electrical equipment added, ‘The uncertainty about tariffs keeps us cautious on spending, despite the strong sales right now.’”
“’Regime uncertainty’ is the economic term for worries like these. Investments take time to pay off, and when government policy constantly shifts, companies have a hard time telling whether an investment will be worth it. Investors, too, get nervous about the rules governing businesses and those surrounding the taxation of their profits. By slowing investment and innovation, regime uncertainty stifles the economy and makes it harder to attract foreign investment.”
The ” president’s frequent shifts in policy stand to have a chilling effect. In the past month alone, tariffs have been imposed, delayed, reimposed, and now — at least for some categories of goods — delayed for another month. Adding to the unease are the administration’s attacks on the justice system, which foreign investors, especially, are bound to be watching. To repeat: There is a reason that so much foreign debt is structured to be governed by U.S. law. Signaling that America’s trade policies could change at any time, and that its justice system is vulnerable to political influence, risks the country’s position as a global destination for securities issuance and investment capital.”
“The haste with which this year’s tariffs have been imposed, and Trump’s dubious rationales for imposing them, justifiably make people worry that the current trade rules could be rewritten again and again.”
“And while companies could resolve this uncertainty once and for all by making, and sourcing, products in the United States, this is a costly proposition — too costly, in some cases, to be worthwhile. If domestically made products are more expensive than foreign ones, investments might not pencil out, and some exporters might find themselves priced out of global markets. This retrenchment will ripple through an economy that already looks fragile.”
“On the same day that the Trump administration announced the tariffs would go into effect, the Federal Reserve Bank of Atlanta said it had revised its estimate of first quarter gross-domestic product downward, to -2.8 percent. Consumers say they are nervous about inflation, job prospects and, yes, tariffs.”
“[M]anufacturers think abrupt changes in trade policy are bad for business.”
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Editorial, The market’s grim view of tariff shenanigans, Wash. Post (Mar.7, 2025).