Talk about farce. First the world’s biggest economy stunned mankind with a dramatic announcement in which the American president himself displayed elaborate charts on big boards punishing scores of countries with tariffs ranging from 10% to 50%.
That was on April 2. Seven days on, the same president effectively said “oops,” suspending his entire move, excepting China. But duties on Chinese goods were also not left the way they had been reset only the previous week, and now were spiked from an already staggering 34% to an altogether astronomical 125%.
That was on Wednesday, April 9. On Friday, April 11, the US Customs and Border Protection agency said the new duties on Chinese imports would not apply to smartphones, computers, semiconductors, modems, flash drives, and other electronic goods.
Added up, it’s been a celebration of economic absurdity, personal erraticism, and political collapse, a grand fiasco that will be counted among political history’s most conceited, clumsy, and fateful blunders.
The bottom line of this chaotic retreat is that Donald Trump’s economic flagship has sunk. The question, therefore, is what, if anything, can still save his presidency? And the answer is the Middle East.
The reasons for Trump’s U-turn are obvious
The immediate cause is the financial markets’ panicked response to his economic madness. The panic reflected a universal assessment that a global trade war will be ruinous for everyone, everywhere. One nation’s tariffs would trigger another’s – as they already have – thus pressuring supply, fanning inflation, spiking unemployment, and generating a global recession.
The pessimism that all this spawned sent south the prices of stocks, bonds, oil, gold, and also the dollar’s exchange rate, as so many had warned. So fierce was the panic that people who had previously backed Trump suddenly confronted him.
Sen. Ted Cruz (R-Texas) said tariffs are “terrible for America” and “a tax principally on American consumers.” Four other Republican senators backed a bill that called to halt the tariffs on Canada. Another Republican, Sen. Chuck Grassley of Iowa, co-sponsored with a Democrat, Maria Cantwell of Washington, a bill that shifts to Congress the president’s authority to impose tariffs.
This is besides pro-Trump billionaires from the financial sector, like Jamie Dimon of JP Morgan Chase, hedge fund manager Bill Ackman, and oil magnate Andre Hall, all of whom tried to dissuade their hero from proceeding with his tariff mania.
The panic that such conservatives shared, and the pressure they collectively exerted, made Trump turn on his heels and suddenly be exposed universally as the reckless ignoramus his opponents had seen all along.
Trump’s economic alchemy was now attacked not only by liberal media – that went without saying – but also by the most pro-market press. “Mindless vandalism,” wrote The Economist, “a market route made in the White House,” wrote the Financial Times, and “the markets believe the biggest threat to the world economy is Mr. Trump’s tariffs,” wrote The Wall Street Journal.
Trump is now in one league with Turkish President Recep Tayyip Erdogan, whose own voodoo economics has been about imposing low interest rates, claiming that high rates don’t defeat inflation but actually cause it. The result of this economic benightedness – paper money, rampant inflation, and double-digit unemployment – is manifest proof that even a real dictator is powerless in the face of economics’ basic laws.
This doesn’t mean that democratic leaders are immune from the temptation to defy the markets. A recent case in point was Britain’s Liz Truss, who attempted three years ago to simultaneously cut taxes and increase spending. The consequent run on the British pound resulted in her ouster by her own party, less than two months after she became prime minister.
The Trump tariffs’ damage is infinitely bigger than that British episode’s – it affects not one second-tier economy but the entire world, and threatens the international system’s stability. It’s the kind of thing that can seed world wars.
HAD THE American political system been parliamentarian, the Republicans may well have replaced Trump the way the Tories replaced Truss. But the American system is presidential, so the Republicans, and everyone else, are stuck with Trump until 2029.
This doesn’t mean Trump is the same president he was before the tariff saga spun out of his control.
The aftermath of Trump’s economic misadventure will not be as swift as that of Truss, but it will also not be as disastrous as Erdogan’s. Americans’ common sense has stopped his catastrophe in its tracks. His allies’ patience for his scattershot decrees has come to an end. Many of them have lost what respect they had for him, and some have also lost the fear that he instilled.
Now Trump will have to do what he hates doing – study, consult, listen, measure, plan – or he will be overruled again, steadily marginalized, and ultimately ignored.
Considering the shallowness of his insights and the crudeness of his ideas, chances his presidency will be recalled for the kind of economic salvation he promised have just slid from low to slim. This cannot be said of what he can still deliver in foreign affairs.
DONALD TRUMP can still reinvent the Middle East. He can lead this sorry region to a brave new future, provided he defines Islamist fanaticism as its illness, and the Iranian regime as its bane.
Trump can use the remainder of his term to unseat the ayatollahs and liberate the Iranian people. The Middle East and the whole world will then journey to peace and prosperity. Hezbollah and the Houthis will lose their sponsor, the Palestinians will shed Hamas, and Israeli embassies will open in Riyadh, Beirut, and Kuwait.
And if Trump’s second presidency ends with such a diplomatic revolution, no one will remember the economic horror show with which it began.
www.MiddleIsrael.net
The writer, a Hartman Institute fellow, is author of Ha’Sfar Ha’Yehudi Ha’Aharon (The Last Jewish Frontier, Yediot Sfarim 2025), a sequel to Theodor Herzl’s The Old New Land.
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