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On May 1, 2003, George W. Bush announced, “Major combat operations in Iraq have ended.” He was standing below a giant banner that read, “Mission Accomplished.” At the risk of inviting charges of understatement, subsequent events didn’t cooperate. But it took a while for that to be widely accepted.
We’re in a similar place when it comes to President Trump’s experiment with a new global trading order.
“Tariffs are making our country Strong and Rich!!!” proclaims Trump, making him not only the first Republican president in living memory to brag about raising taxes on Americans, but also the first to insist that raising taxes on Americans makes us richer.
MAGA’s mission-accomplished groupthink relies primarily on three arguments.
American businesses and consumers soon will have a better idea of how President Trump’s foreign trade agenda might affect them.
The first is that Trump has successfully concluded a slew of beneficial trade deals. The truth is that some of those deals are simply “frameworks” that will take a long time to be ironed out. But Trump got the headlines he wanted.
The second argument is a kind of populism-infused sleight of hand. The “experts” — their scare quotes, not mine — are wrong once again.
The White House social media account crows, “In April, ‘experts’ called tariffs ‘the biggest policy mistake in 95 years.’ By July, they generated OVER $100 BILLION in revenue. Facts expose the haters: tariffs WORK. Trust in Trump.”
But the high-fivers are leaving things out. The most-dire predictions of economic catastrophe were based on the scheme Trump announced on April 2, a.k.a. “Liberation Day.” Trump quickly backed off that plan (“chickened out” in Wall Street parlance) in response to a bond and stock market implosion.
President Trump on Thursday imposed once unthinkably high U.S. taxes on imports from dozens of countries, part of his campaign to turn one of the world’s most open economies into a fortress bristling with barriers to trade.
Saying the experts were wrong under those circumstances is like saying experts opposed to defenestration were wrong when they successfully convinced a man not to jump out a window.
The third argument, made by the White House and many others — that tariffs are working because they’re raising money — is a response to a claim no one made. To my knowledge, no expert claimed tariffs wouldn’t raise money.
The estimates of these revenues from Trump world are stratospheric. Commerce Secretary Howard Lutnick expects somewhere between $700 billion and $1 trillion per year. Last month, the government collected $29 billion. It’s likely this number will significantly increase as more tariffs come online and businesses run down the inventory they stockpiled earlier this year in anticipation of more tariffs to come.
Normally, Republicans don’t exult over massive revenues from tax hikes. But Trump’s defenders get around this problem by insisting that money is “pouring” and “flowing” into America from someplace else.
President Trump extended a pause of sky-high tariffs on Chinese goods for another 90 days into early November, stabilizing trade ties between the world’s two largest economies.
It’s true that tariff revenue is pouring into the Treasury, but that money is coming out of American bank accounts, because American importers pay the tariff. Even Treasury Secretary Scott Bessent cannot deny this when pressed.
So yes, tariffs are “working” the way they’re supposed to; the problem is Trump thinks tariffs work differently than they do.
It’s possible some foreign exporters might lower prices to maintain market share, and some American businesses might absorb the costs — for now — to avoid sticker shock for inflation-beleaguered consumers, but what revenue is generated still comes from Americans. Ultimately it means higher prices paid here, reduced profits for businesses here or reduced U.S. trade overall.
Global financial markets have taken President Trump’s tariff adjustments in stride, with Asian and European shares and U.S. futures mostly higher.
Sometimes, when pressed, defenders of the administration will concede the true source of the revenues, but then they say the pain is necessary to force manufacturers and other businesses to build and produce in the United States. It’s backdoor industrial policy masquerading as trade policy.
That, too, might “work.” But all of this will take time, no matter what. And, if it works, that will have costs, too. Manufacturing in America is more expensive — that’s why we manufacture so much stuff abroad in the first place. If this “reshoring” happens, our goods will be more expensive, and less money will “pour in” from tariffs.
It’s difficult to exaggerate how well-understood all of this was on the American right until very recently. But the need to grab any argument available to declare Trump’s experiment a success has a lot of people not only abandoning their previous dogma but leaping to the conclusion that the dogma was wrong all along.
Maybe it was, though I don’t think so. The evidence so far suggests that problems are looming. The dollar is weakening. Prices continue to rise. The job market is reeling. The stock market (an unreliable metric, according to MAGA, when it plummeted after Liberation Day) is holding on, thanks to tech stocks. The truth is we won’t have real evidence for a while.
It’s worth remembering that Americans don’t live by headlines and press releases and they don’t live in the macro economy either. Declaring “Mission Accomplished” for the macro economy won’t convince people they’re better off in their own micro-economies when they’re not.
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Ideas expressed in the piece
Trump’s declaration of tariff success mirrors George W. Bush’s premature “Mission Accomplished” declaration in Iraq, representing wishful thinking rather than actual achievement. The author argues that subsequent economic data will likely prove the celebration premature.
The current administration represents a historic departure from Republican orthodoxy, as Trump becomes the first Republican president in living memory to celebrate raising taxes on Americans while simultaneously claiming these tax increases make the country richer.
Three main arguments supporting tariff success are fundamentally flawed: trade deals are merely preliminary “frameworks” rather than concrete achievements, expert predictions of economic catastrophe were based on Trump’s original April 2 plan which he quickly abandoned after market turmoil, and the focus on revenue generation misses the point since no experts disputed tariffs would raise money.
The administration’s rhetoric about foreign money “pouring” into America is misleading, as tariff revenue actually comes from American importers and consumers, not foreign governments. Even Treasury Secretary Scott Bessent acknowledges this reality when pressed directly on the issue.
The tariff policy functions as “backdoor industrial policy masquerading as trade policy,” designed to force domestic production rather than optimize trade relationships. While this reshoring strategy might succeed, it will inevitably result in higher consumer prices since American manufacturing costs exceed those abroad.
Early economic indicators suggest emerging problems, including a weakening dollar, continued price increases, and struggling job markets, while stock market stability depends primarily on technology sector performance rather than broader economic health.
Different views on the topic
Administration officials maintain that tariffs are establishing fair trade baselines that encourage domestic production and strengthen supply chains, with the 10% reciprocal tariff structure providing necessary protection for American industry[4].
Some financial analysts suggest that tariffs maintained at moderate levels, such as 5% permanently, could actually upgrade growth forecasts for the latter half of 2025 and potentially reduce core inflation measures[3].
Economic research indicates that while tariffs impose significant costs, the actual economic outcomes have proven “less severe than the original April 2 announcements implied” due to various exemptions and adjustments made since implementation[2]. Many companies and sectors have received relief through targeted exemptions, particularly affecting trade relationships with Canada and Mexico under USMCA provisions.
Treasury and trade officials like Scott Bessent and Jamieson Greer are described as “sophisticated professionals” who have played moderating roles in tariff implementation, suggesting a more measured approach than initial pronouncements indicated[1].
The broader economic context includes substantial investments in artificial intelligence and technology sectors that have helped buoy the economy during the tariff transition period, with these technological advances providing productivity gains that offset some tariff-related costs[1].
Some economists acknowledge that short-term economic adjustments may be necessary to address previous administration policies, including large budget deficits and regulatory frameworks that affected business investment and merger activity[1].
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