05-05-2025
Trump is warning about shortages. Will kids have toys this Christmas?
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Like many of our readers, I'm sure, I've been stocking up on various items that are made in China before the price rises. That seems to me a good metaphor for the odd period we're in: We know what's coming, but it hasn't arrived yet. President Donald Trump is preparing us for what it might look like, though, recently warning that 'maybe the children will have two dolls instead of 30 dolls.'
Is this what the post-'Liberation Day' economy will look like come the holidays? And how will Americans react to empty shelves or price hikes for goods they expect to be cheap and plentiful? I spoke with my colleagues Philip Bump and Jim Geraghty about the politics of shortages.
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Megan McArdle In a recent piece for the Dispatch, John McCormack quotes a business owner who is waiting for equipment that will cost him [more than] twice what he thought he was paying: 'We're just hoping either the ship sinks or somebody comes to their senses before it hits the dock.' So: When will the tariff ship sink? And where is the pain likely to show up first, economically or politically?
Philip Bump The answer appears to be 'imminently.' There are already reports of ports seeing far less traffic. It seems like a straightforward chain of repercussions: fewer goods and higher prices lead to more economic pain which leads to political pain — though it's still not clear how much of the latter will be borne by the president himself.
Jim Geraghty I can't believe the administration is so nonchalant about the prospect of supply chain problems, at least so far. The supply chain shortage driven by the pandemic is not ancient history. I don't think it was a decisive factor in Biden's defeat, but I do think it added to the widespread perception among voters that the economy wasn't doing well, despite the low unemployment rate. You would think Trump and his team would want to do everything possible to minimize empty shelves or higher prices. But apparently … nah!
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Megan In Trump's first term, tariffs affected cars and washing machines, among other products; he doesn't seem to have paid much of a price for that. I assume this time will be different — but how different?
Jim Where Trump might have a bit more leeway is that people feel inflation most intensely (and quickly) in things they purchase on a regular basis — groceries and gasoline come to mind. People know, generally, what they paid for those items last week, last month, etc. Things like toys, lumber and big-ticket electronics they buy less often, and thus I think memories will be fuzzier of what things used to cost.
Philip It seems clear that the tariffs this time around will have a much bigger effect, to Jim's point, so we can probably assume that there will be more public pressure to ameliorate the problem. So the question is really: How insulated is Trump from negative feedback in general? So far, he seems to be strikingly insulated from it; it took a wobbly bond market for him to scale the tariffs back last month. It's not clear that there's otherwise a metric that might prompt him to reconsider.
Megan Groceries and gasoline will be affected slowly, if at all though, right? It's going to be consumer electronics, clothes, bedding, etc. at first.
Jim I talked about this in my last column. We'll see the first effects at America's ports — ships from China will stop coming in, which will mean less work for the truckers, etc. Things still feel relatively 'normal' in most shops compared to the beginning of the year, but we're going to see a ripple effect as the last of the ships from China get unloaded and their goods dispersed …
Philip Yeah, it seems like there's going to be a lot of people online shopping who are suddenly like, wait, why is this twice as expensive? And then not buying. I'm sort of morbidly fascinated to see if surging prices prompts his base to lose faith in his presentations about the world — and then, if he actually changes his position to adjust to what they want to see.
Megan The administration has seemed unbelievably inept at messaging —'Your kids don't need so many dolls.' Who in the administration can be a better messenger? Is such a thing possible?
Jim Trump's 'Well maybe the children will have two dolls instead of 30' reminded me a great deal of Bernie Sanders's statement in 2015, 'You don't necessarily need a choice of 23 underarm spray deodorants or of 18 different pairs of sneakers when children are hungry in this country.' For all the differences in these two men's philosophies, they look at American store shelves with a lot of options as a problem that the government needs to step in and solve.
Philip Although, in fairness, Sanders's argument wasn't 'We need fewer products because by importing those goods we are somehow having money stolen from our country.'
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Megan Why is the administration doing this in a way that will produce blowback?
Philip It really seems as though Trump (with justification) has internalized the idea that there are no extended repercussions for his actions. Combine that with his apparent sense that this is a necessary shock to fix the system, and here we are.
Jim There's been so much (deserved) attention on the tariffs that I think anything that happens on the economic front for the next year or so will be attributed to them, good or bad. The tariffs are indeed a huge deal, but there are other factors influencing the economy. Trump genuinely loves tariffs and thus he's completely comfortable with them being front and center.
Megan Last question: If you were White House chief of staff, what would you do to minimize the political pain, other than the obvious step of rolling back the tariffs?
Jim Every time there's a sign of progress on trade deals, the markets go up and presumably the damage done to everyone's 401(k)s and college savings accounts gets mitigated a bit. So I'd be talking up how close we are to a deal with our other large trading partners — Japan, South Korea, etc.
Philip If I were his chief of staff, I might also gently suggest that he vet his commentary with people who exist within the middle class just to see how 'They don't need to have 250 pencils, they can have five' flies before rolling it out to Newsmax.
