Outside the Beltway

‘An Experiment in Recklessness’

What could possibly go wrong?

James Joyner · Wednesday, April 9, 2025 · 6 comments

David Sanger, NYT (“An Experiment in Recklessness: Trump as Global Disrupter“):

As the breadth of the Trump revolution has spread across Washington in recent weeks, its most defining feature is a burn-it-down-first, figure-out-the-consequences-later recklessness. The costs of that approach are now becoming clear.

Administration officials knew the markets would dive and other nations would retaliate when President Trump announced his long-promised “reciprocal” tariffs. But when pressed, several senior officials conceded that they had spent only a few days considering how the economic earthquake might have second-order effects.

And officials have yet to describe the strategy for managing a global system of astounding complexity after the initial shock wears off, other than endless threats and negotiations between the leader of the world’s largest economy and everyone else.

[…]

“Donald Trump has launched a global economic war without any allies,” the economist Josh Lipsky of the Atlantic Council wrote on Tuesday. “That is why — unlike previous economic crises in this century — there is no one coming to save the global economy if the situation starts to unravel.”

The global trading system is only one example of the Trump administration tearing something apart, only to reveal it has no plan for how to replace it.

State Department officials knew that eliminating the U.S. Agency for International Development, the nation’s premier aid agency, would inevitably cost lives. But when a devastating earthquake struck central Myanmar late last month and took down buildings as far away as Bangkok, officials scrambled to provide even a modicum of help — only to discover that the network of positioned aid, and the people and aircraft to distribute it, had been dismantled.

Having dismantled a system that had responded to major calamities before, they settled on sending a survey team of three employees to examine the wreckage and make recommendations. All three were terminated from their jobs even while they stood amid the ruins in the ancient city of Mandalay, Myanmar, trying to revive an American capability that the Department of Government Efficiency — really no department at all — had crippled.

[…]

Similarly, there was no plan for retrieving a Maryland man who was wrongfully deported to a notoriously dangerous Salvadoran prison, a move a judge called “wholly lawless” and an issue the Supreme Court is expected to take up in the next few days. A Justice Department lawyer in the case was placed on administrative leave, apparently for conceding that the man never should have been sent to the prison.

Mr. Trump has appeared mostly unmoved as the knock-on effects of his policies take shape. He has shrugged off the loss of $5 trillion in the value of the American markets in recent days. Aboard Air Force One on Sunday night, he said: “Sometimes you have to take medicine to fix something.”

In their public appearances, Mr. Trump’s aides have often contradicted each other, even on the rationale for imposing the tariffs. Peter Navarro, the most enthusiastic defender of the tariffs, has repeatedly described them as a new, permanent feature of America’s economic defenses.

“This is not a negotiation,” he wrote in The Financial Times. “For the U.S., it is a national emergency triggered by trade deficits caused by a rigged system.”

Like Mr. Trump, Mr. Navarro has made the case that tariffs will become a major source of government revenue, as they were in the 1890s, before the creation of the income tax. (Among the skeptics of Mr. Navarro’s analysis is Elon Musk, who is leading the Department of Government Efficiency and is the world’s richest man. He called Mr. Navarro “truly a moron” and “dumber than a sack of bricks” on social media.)

But if you listen to Scott Bessent, the Treasury secretary, who has looked pained as he has had to defend the tariff strategy, the taxes on imports are a negotiation tool. He said on Monday that he is overseeing such talks with Japan, which is the world’s No. 3 economy and the United States’ most critical ally in containing Chinese power. But it is unclear whether that negotiation is about tariffs, nontariff barriers or geopolitics.

Johnathan Cohn, The Bulwark (“Do Not Pass Go, Do Not Collect $200, Do Go Out of Business“):

DONALD TRUMP’S TARIFFS are so punishing that even the houses in Monopoly are going to get more expensive.

And I do mean that literally.

While the tariffs will have profound impacts on big-ticket items like cars and everyday purchases like groceries, they also will slam the retail sector. And that includes items like board games, which are designed and sold here in America—but are, in almost every case, manufactured overseas.

Games typically have a handful of components, mostly made from paper (cards, boards) and plastic (pieces, tokens, dice). When and if the tariffs kick in on Wednesday, those components will get a lot more expensive, putting new pressure on the companies that manufacture them to raise their prices or suffer losses.

Industry leaders told me they anticipated the tariffs and were already adapting. The larger companies—like Hasbro, which sells Monopoly and many other name-brand games—had already moved much of their production out of China and into nearby countries like Vietnam, which they thought Trump was less likely to target.

They didn’t plan for Trump going after those nations as well, and they certainly didn’t count on the president calling for tariff spikes well beyond the 10 or 20 percent most analysts thought he had in mind.

That explains why stock for Hasbro and rival toy company Mattel, which had actually held up pretty well after Trump’s first round of tariffs on China, fell sharply with the rest of the market this past week.

“This is untenable for our industry,” Greg Ahearn, president of the Toy Association trade group, told me.

[…]

HOW THIS NEW TRADE WAR will play out depends on which Trump official you ask and when. At times, they’ve suggested the president wants to see the tariffs take effect and stay in place indefinitely, in part to raise revenue. At other times—including Tuesday—they have said he mainly intends the tariffs to serve as a threat, to get better trade agreements with other countries.

Either way, both Trump and his advisers have suggested at times a primary goal of their strategy is to bring manufacturing jobs back to the United States—an idea that has undeniable appeal, especially in parts of the country like the Midwest where factory employment remains far below what it once was.

But “reshoring” the game industry can’t happen right away, Ahearn said, because the production of game and toy pieces—like so many other kinds of manufacturing—has become highly specialized and dependent on complex supply chains that countries like China have spent decades perfecting.

“It will take probably five to seven years at the least to be able to build up this capacity here,” Ahearn said.

And as with every other industry, it’s hard to imagine companies making those kinds of investments given the administration’s inconsistent rhetoric on whether Trump sees the tariffs as a permanent feature of economic policy or merely a negotiating tool.

Nick Timiraos, WSJ (“Trump’s Tariffs Put Fed Chair Powell in a ‘No-Win Situation’“):

Federal Reserve Chair Jerome Powell is facing an increasingly dreadful task.

Economists, business owners and investors are betting that the uncertainty created by the sudden rollout of President Trump’s large tariff hikes, many of which are set to take effect Wednesday, will push the economy closer to a recession by weakening hiring and spending. That would call for cutting rates to cushion any downturn.

At the same time, the magnitude of tariff increases is likely to lead prices to rise substantially for many imported goods, including materials used by domestic manufacturers. That could make central bankers nervous about inflation and argues for keeping rates where they are despite gathering risks to the economy and labor market.

“They are in a no-win situation,” said Laurence Meyer, a former Fed governor.

Congress has charged the Fed with keeping inflation low and stable while maintaining a healthy labor market. It has been at least 40 years since a president’s policies thrust the Fed’s two mandates into such profound potential tension.

“This administration has generated the worst shock possible for the Fed, and there’s nothing that they can do right now,” said Riccardo Trezzi, a former Fed economist who runs Geneva-based Underlying Inflation, a consulting firm.

Powell said last week that the central bank didn’t “need to be in a hurry” to cut rates, indicating a rate cut isn’t on the table at the Fed’s next policy meeting, which is May 6-7. “You’ll know more…as the months go by. It’s hard to say exactly when you’ll know, but clearly that learning process is ongoing,” he said.

For now, investors are betting the Fed cuts interest rates later this year because the negative hit to growth will so badly weaken companies’ pricing power that inflation will slow after a big initial pop.

But the Fed will be hard-pressed to cut rates to pre-empt that slowdown because if it succeeds in offsetting the weakness, the increase in inflation might last longer. Fed officials have suggested that they could be slower to cut rates than they have in previous episodes until they see the labor market weakening meaningfully.

“If you’re a trapeze artist, you don’t leave the platform until you’re sure your partner is leaving the platform,” said Vincent Reinhart, chief economist at BNY Investments.

Axios (“Scoop: A dozen House Republicans mull defying Trump on tariff bill“):

At least a dozen House Republicans are considering signing onto Rep. Don Bacon’s (R-Neb.) bill to restrict the White House’s ability to impose tariffs unilaterally, Axios has learned.

Why it matters: It’s a significant break with President Trump, who has threatened to veto the bill should it pass Congress. Bacon told Axios that two Republicans — Reps. Jeff Hurd (R-Colo.) and Dan Newhouse (R-Wash.) — and two Democrats have signed on to the bill as co-sponsors. He added: “I have 10 others who want to do it but they want to talk to the trade representative first.”

The details: The bill would cause any tariffs a president institutes to expire after 60 days unless Congress votes to pass a resolution of approval. It would also give Congress the ability to pass a resolution of disapproval to eliminate the tariffs at any time. More than half a dozen Senate Republicans have co-sponsored an identical bill from Sens. Chuck Grassley (R-Iowa) and Maria Cantwell (D-Wash.).

[…]

What to watch: Bacon said he is in no rush to mount a concerted push to bring it up for a vote but isn’t ruling out an eventual effort to force it to the House floor. “I don’t think it’s likely for this next month, maybe two months. I want that bill sitting there, and as we study the stock market, inflation, unemployment, this may be a viable way,” he said. Bacon said “there is a prospect” that he ends up introducing a discharge petition — a procedural maneuver that, if signed by 218 members, can bypass leadership and force a vote on any bill.

I’m sure we can wait a month or two for Congressional Republicans to grow a backbone without implications.