This is an adapted excerpt from the April 9 episode of “All In with Chris Hayes.”
If you think of the entire United States economy as a house, over the last week with his sweeping tariffs, Donald Trump has set that house on fire and watched it burn. That was until he lost his nerve and put most of that fire out. He wants you to congratulate him for it, but now we’re left with this partially burned, smoldering house. Can you live there? Is he going to set it on fire again? Nobody knows.
That is the takeaway from Wednesday’s madness in Washington, D.C., and on Wall Street. Markets at home and around the world lost more than $10 trillion in value in the week since Trump announced his 10% tariff on almost every single thing imported into the U.S., plus insane double-digit tariffs on goods from dozens of countries.
The rules of “King” Donald’s wild tariff ride keep changing.
Since that announcement, investors have been freaking out. But, as Trump and his team kept repeating, the tariffs weren’t going anywhere anytime soon. On Tuesday, White House press secretary Karoline Leavitt said decisively that Trump was “not considering an extension or delay” on the tariffs. On Wednesday morning, stocks continued their tumble as Trump’s 104% tariff on China kicked in. They fell even as the president posted on social media, “BE COOL! Everything is going to work out well.” Four minutes later, he posted again, saying, “THIS IS A GREAT TIME TO BUY!!!”
He posted that at 9:37 a.m. Wednesday, and in retrospect, that would have been a great time to get in on that hot stock tip. Just a few hours later, Trump changed his mind, and the market shot back up again.
In a long note on Truth Social, Trump wrote, “I have authorized a 90 day PAUSE, and a substantially lowered Reciprocal Tariff during this period, of 10%, also effective immediately.” Trump said that pause applied to an unnamed group of 75 countries that he claimed hadn’t retaliated against his tariffs. But because China had responded, he also said in the same post, “I am hereby raising the Tariff charged to China to 125%, effective immediately.”
There you have it. One erratic man with unilateral power who flits from whim to whim, imposing whatever tariffs he wants whenever he feels like it, doing it mostly to feel powerful and respected and to have the rest of the world, in his own words, kiss his a--.
Some countries are supposedly getting a temporary break from the biggest tariffs. Which ones? Not clear. How much will they pay in tariffs in the meantime? At least 10%, but maybe more. How exactly does any of that work? No one really knows, because the rules of “King” Donald’s wild tariff ride keep changing.
But what the markets heard was “a pause on tariffs,” and so they rebounded by thousands of points. They’re still way below where they were before the tariff roller coaster but high enough for Trump to declare victory.
“I didn’t know it would have that kind of an impact, but it’s, you know, the biggest increase in the history of the stock market,” Trump said from the Oval Office on Wednesday. “That’s pretty good. You almost, if you keep going, you’re gonna be back to where it was four weeks ago.”
He is so pleased with himself for saving a few rooms in the house that he set on fire. He is also deluded. Basically everything coming into the U.S. is still getting a tariff slapped on it. Prices are still almost certainly going to rise, and growth is still likely going to fall. We are still in for that pain. Especially with goods from China or other nations Trump could say are retaliating against him.
On top of that, the threat of a global trade war still exists. In fact, Fox Business’ Charles Gasparino alleged that Trump backed down because one of America’s top trading allies had basically signaled that it could destabilize the debt of the U.S. federal government.
“I mean, let’s be clear what happened, you know, who capitulated here and why? You know, I don’t want to say this because I am a patriot, I am an American, but it is The White House who capitulated based on everything I hear and all my sources,” Gasparino said on air Wednesday. “And the reason why is because of the bond market and what happened last night.” Gasparino went on to report that Japan, a huge holder of U.S. bonds, was allegedly “dumping” those bonds and that “forced [the Trump administration’s] hands.”
The full faith and credit of the United States is not what it used to be. Not when it is entirely bound up in the whims of one man.
You see, the U.S. issues Treasury bonds, and they are the foundational asset of the entire global financial system. They are famously a safe haven in uncertain times. They are one of the things that make America a superpower. The biggest holders of these are China and Japan, countries that Trump continues to antagonize with his tariffs. And so they started dumping their bonds, something that Trump, in a rare moment of honesty, admitted was a reason he announced Wednesday’s pause.
“Well, I thought that people were jumping a little bit out of line,” Trump said. “They were getting a little bit yippy, a little bit afraid … The bond market is very tricky. I was watching it. But if you look at it now, it’s beautiful. The bond market right now is beautiful. But yeah, I saw last night where people were getting a little queasy.”
Trump thinks that by pressing the pause button and goosing stocks, he has fixed everything. But that gets at another reason why demand for American Treasurys is down: The full faith and credit of the United States is not what it used to be — not when it is entirely bound up in the whims of one man. You cannot run a national economy — much less a global economy — based on how Trump is feeling and who is kissing his a-- from hour to hour. You cannot build a factory, or set up a supply line, or pull the trigger on a big business loan if there is a mad king who might burn it down today, or tomorrow, or in 90 days.