WSJ editors on Trump's bullying tactics

Mr. Trump thinks he can bully everyone into submission, but he can’t bully Adam Smith, who deals in reality.  Markets know tariffs are taxes, and taxes are anti-growth.  The Trump tariffs are the biggest economic policy mistake in decades, and extending the 2017 tax reform and deregulation may not compensate for all the damage. 

There are also fears that if tariffs fail to reorder the global trading system, Mr. Trump might impose a fee on Treasury debt as chief White House economist Stephen Miran has proposed.  This would amount to a partial U.S. default since it would cut the rate of return.  Think Treasury yields are rising now?  Watch what happens if a Miran fee is imposed. 

All of this is tempting economic fate and contributing to a global “sell America” narrative in financial markets.  That’s why the dollar is under pressure.  Smart Presidents pay attention to market signals and adapt.  The adaptation now would be to negotiate a quick end to the tariff barrage.  Claim some trade-deal victories, and call it a day. 

But markets are spooked because they don’t know if Mr. Trump listens to anyone but his own impulses. 

~ The Editorial Board, "The Fire Jerome Powell Market Rout: Investors render a verdict on tariffs and politicizing the Fed.," The Wall Street Journal, April 21, 2025

President Trump meeting in the Oval Office with Japanese Minister of
State for Economic and Fiscal Policy Ryosei Akazawa on April 16, 2025