Trump must change course on tariff madness
The first quarter of this year saw US firms ramping up imports to stockpile products ahead of tariff announcements. When these tariffs were paused, this position unwound slightly, and GDP rose again. With tariffs now back on the table, growth is likely to weaken.
The effects of this uncertainty may already be visible in labour markets. Figures from the US Bureau of Labor Statistics (BLS) showed 73,000 new jobs in July, well below expectations of 110,000. Figures for May and June, meanwhile, were revised downwards by a huge margin.
Mr Trump can claim to have made several major correct calls in his presidency. His victories in the culture wars arguably helped to trigger a global preference cascade that shifted the tone of conversation meaningfully to the Right, while his evisceration of wasteful US bureaucracies set an example of what could be achieved by leaders willing to ignore the squealing from state employees.
On European affairs, moreover, he has been resolute and correct, telling our leaders the home truths they work furiously to deny. On migration, defence spending and the costs of net zero, Mr Trump has time and again pointed towards common sense conclusions seemingly beyond the grasp of our elite class, and on Israel and Gaza he has been a rare voice of moral sense.
His two great errors, however, have been appalling. The first was his disastrous attempt to force Kyiv into striking a deal with President Putin. This has failed, and Mr Trump has, belatedly, come around to realising the threat posed by Moscow.
The second was the imposition of tariffs on friendly nations. As a tool for decoupling from China, there is merit to Mr Trump's view. Within the West, however, it is an error, and one which he is now beginning to compound with his decision to sack the 'Biden Appointee' responsible for overseeing the BLS, and his desire to replace the official with 'someone much more competent and qualified'.
As the travails faced by Britain's Office for National Statistics demonstrate, high quality economic data is not a given. This knee-jerk firing, however, is no way to bring about improvements that financial markets can trust. Mr Trump risks, instead, further undermining confidence in the US economy – and his presidency.
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