The question every finance minister, factory owner, stockbroker and person who uses money to buy stuff is trying to answer is whether Donald Trump’s tariffs are permanent. Will he back down on his huge wave of tariffs once other countries drop their own tariffs on American products? Or is protectionism the point?
Team Trump itself does not seem to know. Each day more loyalists start to sound as if they hope the president is lying but fear he is being honest. Advisers look scattered during interviews trying to explain the strategy behind these tariffs. As markets crash, the treasury secretary Scott Bessent has spent a week evading questions with the nonchalance of someone who has not been the treasury secretary during a market crash.
Amid the confusion, splits are emerging. Peter Navarro – a Trump adviser who is the most fervent tariff devotee in the White House – has written in the Financial Times that this is “not a negotiation” and only the “beginning”. Navarro’s aim seemed to be sending a warning to his colleagues who were losing faith as much as explaining the plan to the markets. Bessent, meanwhile, keeps emphasising the number of countries who want to negotiate with the White House, suggesting at least some in Trump’s team also want to negotiate.
The Republican senator John Kennedy has said White House aides should resolve the conflicting messages on tariffs by talking “to their boss” to figure out the answer.
Well, Trump – which is it?
When asked at the White House on 7 April the president said that “they can both be true… There can be permanent tariffs and there can also be negotiations because there are things that we need beyond tariffs.” Trump likes to leave the world hanging on his words, and watch as his underlings fight to define his agenda.
Meanwhile, the cracks within the broader Maga movement are deepening. The free-traders, billionaires and tech bros are turning on the nationalist populists, who think tariffs will bring back manufacturing jobs for the working class.
Consider that Elon Musk has made his most disloyal move since joining Trump’s campaign last summer. On 7 April he posted a video of the American economist Milton Friedman explaining that making something as simple as a pencil requires supply chains that criss-cross the globe. Musk, who has huge electric vehicle factories in both the EU and China, was always an unlikely champion of a trade war. But given how front and centre he’s been in the administration so far, the pointedness of his rebellion is a surprise. The message was that the protectionists required the most basic lesson in the stationery trade.
Musk then called for a free-trade zone with zero tariffs between America and Trump’s bête noire Europe, for which Navarro promptly attacked Musk for not understanding how trade works. Musk responded by saying that Navarro’s Harvard doctorate in economics was a “bad thing, not a good thing”. Ben Shapiro, the influential conservative commentator, has fallen in behind Musk saying that Trump “probably unconstitutionally” imposed the tariffs.
Trump’s backers on Wall Street have also lost faith in the argument that the economy can weather trade wars like it did during the first term. Jamie Dimon, the JP Morgan CEO who said at Davos in January that if tariffs were inflationary but “good for national security, so be it – I mean, get over it”, has now warned that the tariffs are one “large additional straw on the camel’s back”. The hedge-fund billionaire and Trump supporter Bill Ackman has called for a 90-day pause on the tariffs in order to avoid “economic nuclear war”.
The pride with which Trump said he would stick to the plan on 7 April should be taken as a sign that protectionism is here to stay, even if a series of individual deals with nations are quickly announced in order to calm the markets. Israel has said it is willing to drop all tariff barriers against America in order to secure a reprieve of the 17 per cent tariff the White House imposed on the country. Trump’s current policies are so severe that he has room to retreat. But these would result in differences of degree, not kind (and Trump has so far refused to lower the tariffs he’s placed on Israel). Any new deal would not change the fact that Trump, despite the splits within his coalition, seems to remain committed to this assault on the global trading system.
[See more: China intends to crush the trade war]
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