President Donald Trump's disastrous tariffs debacle this week tells us a lot. This isn't just a lesson about policy; it's also about pressure, dysfunction, and the lasting damage that even a short-lived idea can cause the economy. And while Trump's advisors have been working overtime to spin this whole thing as some sort of successful master plan, let's be clear: This was a collapse, and it offers four key takeaways.
1. Pressure works
It's hard to know whether Trump blinked because he actually cared that the "reciprocal tariffs" could wreak havoc on American industries and consumers, or because he knew the public had no one else to blame for a potential economic collapse. Either way, it's a reminder: public pressure, especially when it's bipartisan and economically grounded, can still move him.
2. Trump's advisors are in for a very rough ride
Trump's team spent days defending his tariffs as if they were part of a deliberate negotiation strategy. Then, that work was completely undermined by Trump telling reporters he reversed course because "people were getting a little bit yippy."
3. Some damage is already done — and more is coming
To state the obvious, investors don't love when the leader of the world's largest economy sets about trying to change the global business landscape only to reverse course days later. Even the possibility of economic volatility is enough to spook markets and for countries to lose confidence in the stability of the U.S. dollar. It could be decades before America regains the trust of its financial partners.
4. He's shifting the goalposts — and getting away with it
Trump's policy rollout was obviously a disaster. But even now, Trump's global 10% tariffs remain intact. In fact, they almost look measured, given the alternative. But 10% is still quite high, and could lead to significant price increases for consumers. Add the China fallout to that, and you can see why JP Morgan CEO Jamie Dimon is still warning there's a 50% chance of recession.
Read more exclusive insights from Jen Psaki here. And tune into "Inside with Jen Psaki" Mondays at 8 p.m. ET, and Sundays at 12 p.m. ET on MSNBC.
