Donald Trump has just taken the biggest political risk with the American economy of any modern president.
Presidents typically try to do everything they can to avoid shaking the country's economic engine and global stability - especially when unemployment is low and growth is steady, as was the case when he took office from Joe Biden.
However, with his sudden announcement of new tariffs on almost all imports from 185 countries, Trump caused an extraordinary shock, going against the advice of almost all economic experts and the lessons of the darkest moments in history.
He followed his lifelong belief in the mystical power of making imported goods more expensive to stimulate domestic production, despite the fact that trade wars usually end badly and that tariffs are more a feature of the 19th century than the 21st.
In a surreal appearance in the White House Rose Garden on Wednesday, Trump held a large banner depicting new tariffs as the wind blew it away. The world watched the unbridled president in the only spotlight he was comfortable with, as he put the fate of billions of people at risk for his unusual political gamble.
The biggest political surprise is that, in the name of reviving stagnant industrial regions affected by job losses and production, Trump will actually deal a serious blow to Americans.
He was elected five months ago, in large part because voters were outraged by high food and housing prices, which followed inflation caused by the Covid pandemic and the Biden administration’s excessive spending. Democratic candidate Kamala Harris had no convincing answers when asked how she planned to rein in prices. Trump, by contrast, has come across as someone who is close to the working class — even frying French fries at a McDonald’s in Pennsylvania.
Yet he has opted for policies that will make almost everything more expensive, from fast food to electronics, cars and new homes. Poorer citizens will be hit hardest, more than Trump's wealthy friends, as well as those on fixed incomes who are watching their pension funds dwindle.
In an interview with NBC over the weekend, he said he “doesn’t care” if car prices skyrocket. His new tariff experiment shows he means it. It’s a startling political stance for a billionaire president leading a cabinet of millionaires and billionaires.
A response from abroad is sure to follow.
No one can predict with certainty how this risky political game will end.
If all planned tariffs are implemented and there is no sudden withdrawal, which is not ruled out given Trump's previous U-turns, the world faces a full-scale trade war.
Foreign leaders, like Trump, must take political factors into account. And they will come under enormous pressure to retaliate against the US for its universal 10 percent tariff on almost all countries, with significantly higher rates for those Trump has labeled the worst offenders.
It is hard to imagine a more loyal American ally than Australia. Yet its Prime Minister Anthony Albanese warned: “This is not the act of a friend.” Foreign retaliation could set off a spiral of escalation, and Trump, who always wants to have the last word, could feel compelled to respond.
Analysts believe it is illusory to expect that manufacturers will decide to build new factories and supply chains in the US, and even if they did, there is little chance that it would happen during Trump's term, or even in the possible third, which he is hinting at, despite constitutional restrictions.
"This is going to be a big moment. I think you're going to remember this day," Trump told his cabinet members and congressional leaders. "It's going to be a day that, hopefully, in a few years, you'll say, 'You know, he was right. This was one of the most important days in the history of our country.'"
Trump probably rightly thinks he has reached a turning point: some economists predict that a return to trade barriers similar to those that led to the Great Depression of the 1930s could trigger a recession.
“This is one of the most important days in American history, in my opinion. This is our declaration of economic independence,” the president said. This time, Trump's exaggerations may backfire.
Still, Trump has an army of loyal voters who share his hatred of establishment pundits and economists. His claim that the world is constantly robbing America has helped him win elections twice.
As he said on Wednesday: “For decades, our country has been plundered, ravaged, raped, and destroyed by nations near and far, both friend and foe. American workers in the steel, auto, agricultural, and manufacturing industries have suffered greatly. They have watched in pain as foreign leaders steal our jobs, as foreign crooks ravage our factories, and as foreign vultures tear apart our once-beautiful American dream.”
Trump's two terms as president prove that the benefits of globalization are not evenly distributed. Many of the swing states he won in 2016 and 2024 bear the scars of industrial decline. Voters remember the promises of previous presidents and feel they were deceived.
“In the coming days, there will be complaints from the globalists, the export-oriented and special interests, and the fake news media,” Trump told the White House crowd and his supporters in front of their screens. “But never forget, every prediction our adversaries have made about trade over the last 30 years has been completely wrong.”
If Trump overturns economic orthodoxy and truly brings prosperity to underserved regions, his unconventional ideas will be validated, and his legacy will be remembered for its audacity.
The president, however, did not explain why it makes sense for the world's largest economy to impose 49 percent tariffs on countries like Cambodia, or to make life difficult for developing countries in Africa. Does he really intend to start a trade war with penguins? The White House's tariff list also includes the tiny Heard and McDonald Islands in Antarctica, which were slapped with a 10 percent tariff - despite being little more than a sanctuary for seabirds.
High political risk with no short-term gain
Another major political risk in his new approach, which erases the free trade system that the US has spent years building, is that Trump is unlikely to get short-term political points for his gamble.
Many analysts believe it is unrealistic to expect manufacturers to decide to build new factories and supply chains in the U.S., as Trump promises. Even if they did, it is unlikely to happen during his term, or even in the possible third, which he is hinting at, despite constitutional restrictions.
Although the tariffs will bring hundreds of billions of dollars to the US budget, it is not certain that voters will believe his claim that the price increases, effectively a new tax, will be compensated for through the promised tax cut bill. And all indications are that, if the bill passes, the richest will benefit the most proportionally.
There is no doubting the audacity of Trump's grand "Liberation Day" announcement on Wednesday.
For weeks he has threatened tariffs, then hinted that he might back down. His supporters on Capitol Hill have repeated the familiar story that his harsh rhetoric is actually the masterstroke of a master negotiator. But unless there is a withdrawal that would be a serious political humiliation given how he orchestrated a “historic” turning point for America, Trump is not going to back down this time.
Senator Tommy Taberville explained that voters in his state still trust the president. “They trust him, and he’s trying something different. We have to change the game.” The Republican senator from Alabama and former Auburn football coach added: “We can’t just keep attacking down the middle; sooner or later we’re going to have to change the game, and that’s exactly what he’s done.”
An opportunity for Democrats if things go wrong
However, the economic situation is much more complex than football tactics.
One of the reasons the US has sometimes had lower tariffs than its rivals is the strength of the American consumer, the wealth of its economy and the belief that the free trade system, in which the US plays a leading role, makes the country even more powerful.
It will now be much harder for Americans to afford new cars, flat-screen TVs, and regularly fill their grocery carts. If prices rise and inflation spikes, consumers could cut spending, slowing economic growth to the point of recession, and the president would be handing Democrats a political gift. Footage of his Rose Garden address will become the central motif of thousands of campaign spots in the 2026 congressional elections and the 2028 presidential election.
Trump’s trade “Liberation Day” comes at a time when the chaotic events of recent months could turn voters away from Republicans. In one of the first political tests of Trump’s second term, the liberal candidate easily won a key election in Wisconsin, deciding the fate of the state’s Supreme Court. It’s a clear sign of resistance to Trump and his ally Elon Musk.
The Democratic Party, which has struggled to find a convincing message against Trump so far, can hardly miss after his tariff spectacle.
"This is a huge tax on American families, all so billionaires can get tax breaks," said Senate Democratic leader Chuck Schumer.
Some Republicans might agree. Four of them in the Senate tried to send a warning to the president on Wednesday night, voting with Democrats for a purely symbolic measure that sought to block tariffs on Canada.
However, whether the country heads toward an economic abyss or toward the new golden age he promises, his party, like all other Americans, is going with him.
Translation: A. Š.
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