Inside the Trump Tariffs: What you need to know

Last Wednesday, President Donald Trump announced sweeping, nearly universal tariffs, which I’ve already seen billed as “one of the 100 worst decisions in presidential history.” “As a foreign policy matter, it’s at least in the top five worst,” repined New York Times Opinion columnist Bret Stephens.

Of course, it’s much too early to say that. Running in the back of my mind — and probably in Stephens's as well — is the possibility that if, somehow, Trump is right about all of this, the media will, once again, be caught with its pants down.

No doubt, that’s what Trump’s betting on.

But that’s a big “if.”

For now, the president’s “Liberation Day” tariffs have unsettled even some of his most loyal supporters. Outside the administration, which has offered mixed signals on the purpose of the tariffs, there are primarily two viewpoints: either (1) the tariffs are bad, but Trump has a plan to leverage them for good, or (2) the tariffs are just bad, full stop.

In other words, very few people are thrilled about the tariffs themselves. Best case scenario — and this is the case Trump is making — Americans have to “hang TOUGH” because the temporary pain will be worth it in the end.

Let’s hope he’s right.

What we know

Last week, the president unveiled a posterboard in the Rose Garden showcasing what he called “reciprocal tariffs” against more than 180 countries and territories. The announcement was predicated on an argument — favored by Trump, Vice President JD Vance, and others — that the rest of the world is freeloading off the United States. Starting with a 10% baseline tariff, Trump’s plan will impose significantly higher rates on select countries, ostensibly to bring them to the negotiating table to lower their tariffs. Critics have pointed out several holes in this logic.

Predicated on false numbers

The first major flaw in Trump’s proposal is that the figures featured on his posterboard are factually incorrect. It appears that the president has confused tariff rates with trade deficits. While one can certainly make the case for reducing America’s reliance on foreign countries, trade deficits are not inherently unfair. For example, consider a country with a population of 100,000 entering into a free trade agreement with a smaller nation of 10,000. In this scenario, the smaller nation would likely purchase fewer goods, leading to a trade deficit for the more populous country.

Trump claims his approach to determining tariffs on countries with tariff rates higher than 10% is to take the rate they charge us and cut it in half. (According to his graph, Vietnam imposes a 90% tariff, so he set their rate at 46%.) In reality, the number he references comes from dividing the U.S. trade deficit with that country by the total value of our imports. (In 2024, the U.S. ran a trade deficit of approximately $123 billion with Vietnam after importing $136 billion in goods. Dividing $123 billion by $136 billion yields a ratio of 0.9044, or 90% — the figure Trump inaccurately claims is the tariff rate Vietnam charges.)

Inaccurate data notwithstanding, Trump’s assertion that foreign trade partners are taking advantage of the U.S. may still hold merit. However, experts from both parties question whether harsh tariffs are the best way to fix the problem.

First, tariffs — often called a tax on consumers — will almost certainly increase prices. Secondly, they could spark a broader trade war, counterproductive to Trump’s aims to lower tariffs against the U.S. Thirdly, they have already punctured the markets, with stock values plummeting following Trump’s “Liberation Day” shockwave.

According to MarketWatch, “Stocks erased a combined $6.6 trillion in value on Thursday and Friday,” the biggest two-day drop in history. While billionaires like Elon Musk, who lost a staggering $31 billion, took a painful hit, everyday Americans felt the effects as well, with over 60% of U.S. adults owning stocks.

Ackman, Sowell speak out

Billionaire hedge fund manager Bill Ackman, who endorsed Trump in 2024, urged the president to rethink his plan to avoid a “self-induced, economic nuclear winter.”

He acknowledged that “other nations have taken advantage of the U.S. by protecting their home industries at the expense of millions of our jobs and economic growth in our country. But, by placing massive and disproportionate tariffs on our friends and our enemies alike and thereby launching a global economic war against the whole world at once, we are in the process of destroying confidence in our country as a trading partner, as a place to do business, and as a market to invest capital.”

“The consequences for our country and the millions of our citizens who have supported the president — in particular low-income consumers who are already under a huge amount of economic stress — are going to be severely negative,” he added. “This is not what we voted for.”

Famed conservative economist Dr. Thomas Sowell added to the growing criticism, cautioning that a broader trade war could result in a scenario where “everybody loses.”

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Other Republican lawmakers, including Senators Ted Cruz and Rand Paul, have also opposed the tariffs. “The truth is that tariffs are taxes,” Paul wrote in an op-ed. “They don’t punish foreign governments; they punish American families.”

Cruz warned that if Trump’s tariffs lead to a recession, which multiple economists have predicted, “[the] 2026 [midterm elections] in all likelihood politically would be a bloodbath.”

To steelman the president’s position, foreign nations have already lined up to negotiate with Trump. For example, Israeli Prime Minister Benjamin Netanyahu vowed on Monday to eliminate his country’s trade surplus with the U.S. (Despite having a free trade agreement with the U.S. and removing its tariffs on U.S. goods last Tuesday, Israel was still hit with a 17% tariff on Wednesday.) Nevertheless, if the tariffs are here to stay, which multiple members of the administration have indicated they are, we could be in for a rocky ride. Trump may have a plan; he may be playing 3D chess. But, in the meantime, everyone from billionaires to everyday Americans with 401(k)s will have good reason to hold their breath.

“Don’t be Weak! Don’t be Stupid! Don’t be a PANICAN (A new party based on Weak and Stupid people!),” the president urged. “Be Strong, Courageous, and Patient, and GREATNESS will be the result!” 

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