Trump’s threat to the U.S. economy could be worse than we imagined

This is an adapted excerpt from the March 11 episode of “All In with Chris Hayes.”

For the first time in my memory, we are watching an American president single-handedly tank the economy and attempt to drive it into a recession. As someone who took Donald Trump’s tariffs threats seriously, the situation we now find ourselves in is even worse than I anticipated. All kinds of economic indicators are blinking red. The markets are dropping rapidly, investors are losing faith and fears of a recession are back on. Instead of assuaging those concerns, Trump is gleefully egging them on. It is truly unlike anything the United States has ever encountered before.

On Tuesday, Trump held an event on the White House lawn promoting his co-president Elon Musk’s car company — literally reading from sales pitch notes like a guy on a used car lot, as Musk continues to slash thousands of jobs and the economy feels like it is on the brink of something dangerous.

During the event, Fox News’ Peter Doocy asked the president about the optics of the event, “What is your message, President Trump? You’re buying a new car while there are some folks who will see this clip at home and they are struggling with their retirement accounts [and] uncertainty about work ahead.”

“Well, I think they’re going to do great,” Trump responded. “Our country had to do this. We had to go and do this.”

But here’s the thing: Trump did not have to do this. There is a largely unspoken truth in politics, which is that presidents really don’t have a ton of power over the macro economy. They largely inherit situations beyond their control: They get the credit when the economy is good and take the blame when it is bad.

So, to that end, it seemed plausible that when Trump took office, he would just let it ride and take credit for the recovery that started under Joe Biden’s administration. But that is not what happened.

Instead, Trump is starting a ridiculous and costly trade war with Canada. In this instance, Trump absolutely does deserve the blame for potentially tanking the economy. Even he seems to understand that at some level.

When asked if he expected a recession this year, Trump told Fox News’ Maria Bartiromo, “I hate to predict things like that. There is a period of transition because what we’re doing is very big. We’re bringing wealth back to America, that’s a big thing. There are always periods of — it takes a little time.”

On Tuesday, in response to Trump’s tariffs, the Dow dropped nearly 500 points. All of the gains made in the post-election high have been erased and Wall Street, correctly, is freaking out, with one investment banker telling The Wall Street Journal, “This is very much a man-made situation.”

Also on Tuesday, Trump attended a roundtable with business leaders, ostensibly to calm their fears about his recklessness — but I’m not sure he accomplished that.

“The tariffs are having a tremendously positive impact,” Trump told the country's top CEOs. “They will have, and they are having … The tariffs are going to be throwing off a lot of money to this country.”

Now, the truth is there’s really nothing that Trump can say to tamp down fears over his actions, because there is no justifying what he’s doing. So we’re left to guess why he’s doing it in the first place. Part of it seems to be sincere ideological belief. Trump is obsessed with tariffs. He has been talking about them for decades. He used to blame Japan. Then it was China. Now it is Canada.

In his second and final administration, it's clear he feels emboldened to act. He’s granted his most hardcore loyalists tremendous power to go on extremist crusades to destroy the entire federal government, which means no one is left to act as a check on Trump’s worst instincts. The institutional guardrails that were there last time are gone.

When we think back to the last Trump administration and all the times someone, like former chief of staff John Kelly, allegedly had to tell the president he couldn’t do something reckless, we like to think of that in terms of defending the rule of law. While that might be true in some cases, in a lot of other cases these people were likely just saving Trump from his own stupidity.

But those people are now gone, and it shows.

There is no one left to tell Trump no, and that feeds into the final, terrifying part of this, which is that it really does seem like Trump views Canada the same way that Vladimir Putin views Ukraine: “It’s ours, and we are going to take it.” Trump wants to apply pressure to make that happen, even if that pressure, in the form of tariffs, makes everyone worse off, which is infamously what Putin’s invasion of Ukraine is doing.

At some point, we need to start taking Trump literally and not just seriously. When he says, “The only thing that makes sense is for Canada to become our cherished Fifty First State. This would make all Tariffs, and everything else, totally disappear,” we have no choice but to believe him.

That's where we find ourselves in this moment: The president of the United States says he wants to conquer another country and subjugate its citizens, and there is seemingly no one left to stop him. And it’s pushing the economy to the brink.