Month: March 2025

Scott Bessent, who has previously argued that the Trump tariffs would be transitory, is now saying that the American Dream doesn’t include cheap consumer goods. In other words, at least some of the tariffs are a stab at import substitution, and are here to stay.

Cheap consumer goods may not be the essence of the American dream, but falling living standards for workers, plans to create labor shortages in essential industries through deportations, and big tax cuts for the wealthy certainly aren’t, either.

Trump can make business leaders run to him and beg for mercy. He can, on occasion, force heads of state of other countries to acknowledge they are his vassals. What he can’t do, however, is force American investors and consumers to spend money when they lack confidence in him and his chaotic approach to tariffs.

Not even Xi has that kind of power, as evidenced by the current state of the Chinese economy.

Congressional Democrats received the Trump speech mostly by engaging in a form of theater that was juvenile and ineffective. The Slotkin response speech, on the other hand, was centrist and sensible. What is going on with this mixed message?

Two observations are pertinent here. First, the base and moderates want to hear different things; it is hardly unusual for the party to feed both of them. In the end, it is the latter group that matters. Second, it is difficult to make a compelling political case against Trump as long as the only apparent victims of his power grab are public officials and employees. When America starts to feel the pain–the pain that was apparently predicted by Slotkin–that will change; the message will become clearer and more persuasive to the voting public.

Kevin McCarthy managed to keep his job for a while by making inconsistent promises to his members about spending. Mike Johnson appears to be using the same tactic on Medicaid; he is telling his hard liners that the cuts will be deep and real, while reassuring moderates in swing districts that the cuts will actually be minimal and cosmetic. No genuinely needy constituents will lose their insurance; the House is only targeting waste and fraud.

McCarthy ultimately lost his position when he no longer had credibility with a majority of his members. My guess is that it won’t end well for Johnson, either.

While I didn’t watch it–and I’m glad I didn’t–it is clear from published reactions that Trump’s speech was a combination of a campaign speech and a victory lap. That’s about what I would have expected.

For once, it appears that he talked about his tariffs. He said nothing which suggested, as his supporters insist, that they are very temporary expedients used to open the markets of our trading partners. Nor did he make much of an effort to prepare Americans for higher prices. He will pay for that before too long.

In the end, the right and the left will judge him on his words, but the center will judge him on his deeds. America as a whole isn’t much moved by the plight of fired federal workers, but it will care if prices go up, the economy slumps, and NATO disappears. All of those things are on the way.

Trump optimists are continuing to argue that the purpose of the undiplomatic offensive is to force the Europeans to take responsibility for protecting themselves, thereby permitting us to focus on China. Pessimists (including me) believe he plans to ally himself with Putin against the Europeans and Ukraine for the purpose of destroying the EU and NATO. How will we know who is right here?

Watch and see how Trump reacts to proposals from Europe to guarantee Ukraine’s sovereignty as part of a peace deal. If he embraces them, the optimists are probably right; if he does his best to put up barriers to the use of European NATO assets, the pessimists will have won the day.

Trump’s campaign commercials didn’t say anything about tariffs; they just told us that we could trust him on the economy. When he was asked about tariffs, he insisted that foreigners would pay them. In office, he has imposed tariffs more or less at random, and without any obvious justification. As a result, the American people are completely unprepared both for the direct impacts of the tariffs and for the inevitable retaliation that is already following.

Reality is going to bite. Even the base is going to complain about higher prices and lost sales. Then what? TBD.

The markets don’t know what to make of Trump’s tariffs. Are they temporary or permanent? Are they leverage to get a better deal or a device to create an economy based on import substitution? Will they result in inflation or a recession?

Given Trump’s capriciousness and desire to show he’s the boss, there are no single simple answers to most of these questions. As to the last, however, you don’t have to choose. The tariffs will result in price increases, lower consumer confidence, and a reduction in confidence. In short, if they remain in place, we will be looking at stagflation.

Given his personality, we can dismiss out of hand any notion that Trump’s desperate desire for a quick end to the Ukraine war is driven primarily by humanitarian concerns. So what exactly is motivating him?

The only plausible explanation, in my opinion, is that Trump sees the war as an unnecessary obstacle to better relations with Putin. That then leads to another question–why is Trump so determined to ally himself with Putin? Is it because he admires the man and his system? Is it because he plans to destroy the EU and NATO, and needs Putin’s assistance? Is it because he thinks the ultimate objective is to flip Putin away from his alliance with China?

In all likelihood, the answer to all of these questions is yes.

There is an obvious discrepancy in size and power between Russia and Ukraine. Joe Biden sought to eliminate, or at least reduce, the discrepancy by providing Ukraine with arms and money in an effort to maintain Ukraine’s independence. Trump, on the other hand, clearly has no desire to remain Ukraine’s ally, but he wants an end to the war. How can he get it?

He has three options. First, he can offer his services as a mediator–an honest broker with no preference between the two sides. Second, he can attempt to impose a reasonably fair settlement of his choice on the parties. Third, he can openly switch sides, support Russia, and force Ukraine and its European allies to surrender in exchange for whatever crumbs of autonomy Putin will accept.

The second option won’t work because the only way Trump can impose his will on Putin is to threaten escalation; it is obvious he has no intention of doing that. As a result, any intervention on his part will be completely one-sided. Both the first and the third alternative could well mean the end of NATO, since the Europeans won’t agree to abandon Ukraine. I think that is where we are headed.

Ross Douthat continues to insist that Trump is just, in his rough and offensive way, giving tough love to our European allies. He does, however, believe that the message should be moderated to include less tough and more love; otherwise, the Europeans might actually take offense, to America’s detriment. Is he right?

That opinion is so 2018! Trump’s undiplomatic offensive is not an effort to identify unpleasant truths and deliver tough love; at best, he is trying to demonstrate to the Euros that they are mere vassals instead of allies, and at worst, he’s planning to feed some of them to Putin.

Here, as with most things Trumpian, the harshness and the cruelty aren’t an inadvertent shortcoming; they’re the point.

Life in the time of Trump.

Zelensky came to town.

He had a deal

But it wasn’t real

And Trump just dressed him down.

What will happen to Ukraine?

The Europeans wonder.

If you want to keep some friends

It’s just another blunder.

Trump divides individuals and nations into three groups: vassals, who do his bidding and accept his view of reality, at least in public, without question; strong adversaries, with whom you make deals; and weak adversaries, who get fed to the woodchipper. Zelensky failed the vassal test, so into the woodchipper he goes!

If it makes him feel any better, he was probably destined for the woodchipper in any event, because Putin, a strong adversary, will insist.

The European imperialists of the fifteen and sixteenth centuries at least had the excuse that they were saving the souls of the indigenous people. In the nineteenth century, it was all about the “white man’s burden,” which was more about railways and other objective standards of civilization than religion. But what about now?

Trump doesn’t even pretend to have any interests beyond short-term material gain. In that sense, he’s worse than a conquistador.

Thomas Friedman says nothing like it has ever happened before–an American president openly siding with an aggressor dictatorship against a small democratic victim. Bret Stephens called it “a day of infamy.” They’re right. What does it mean in the long run?

Trump is going beyond his old notion of talking trash to get allies to pay their way. He’s identifying himself with the aspirations of dictators against the interests and values of liberal democratic states. Why? Either because he admires and wants to emulate authoritarian systems or because he wants a deal to divide the world with them. Or both.

I’m guessing it’s both. And then we will find out how many of America’s former allies will agree, even under pressure, to become vassal states, and how far Trump is willing to go to coerce the ones who don’t.