Damage done

Twenty days have passed since the Trump administration announced its tariff plans — a move we likened to the work of alchemists dabbling in finance and economics. The real danger, however, is that their experiment didn’t unfold in the safe confines of a laboratory, but in the complex, interconnected system of the global economy.

The consequences have been profound. Confidence in the U.S. economy, the Treasury market, and the U.S. dollar as the world’s reserve currency has been shaken in ways we’ve rarely seen before. The only immediate, measurable positive outcome has been a weakening of the dollar, making U.S. exports more competitive abroad. But this silver lining is overshadowed by unresolved structural issues — namely, the refinancing of America’s massive debt and the long-term sustainability of its twin deficits: trade and fiscal.

Ironically, while Trump has pushed for lower interest rates, the Federal Reserve — rightly maintaining its independence — remains cautious. Tariffs could fuel inflation, and the specter of stagflation now looms large.

For the first time in decades, American exceptionalism is under scrutiny. And even President Trump, for all his bravado, may soon find that he cannot ignore the damage inflicted — and may be forced to change course.