My darling son, a Democrat and a capitalist (yes, try to square that circle), is deeply worried about the effect Trump’s tariffs will have on the stock market. I’ve explained to him why I’m not worried (and I’ll explain it here, too), but I don’t think you’ll find a more brilliant defense of Trump’s tariffs than that from Batya Ungar-Sargon, a one-time NeverTrumper.
I’ll start with Ungar-Sargon’s fiery statement and then add a couple of my own theories about why the tariffs won’t be a problem and will be a good thing:
Here's the truth about tariffs: For 60 years they destroyed the American working class to funnel money upwards into the pockets of the rich. Donald Trump is the first president in generations to tell Wall Street to screw itself—he's for the working men and women of this country. pic.twitter.com/sCZRFeITYh
— Batya Ungar-Sargon (@bungarsargon) April 3, 2025
That’s the principled defense of Trump’s tariffs. Here are a few strategic points about the tariffs:
First, Trump’s approach is not the old-fashioned approach of protecting a single industry. Instead, Trump is engaged in economic warfare against the world...but he’s only fighting those who are already arrayed in battle against us. If they tariff us, we’ll tariff them. And here’s the important thing: The moment they stop tariffing us (as Israel did), we’ll stop tariffing them. In other words, this is the ultimate push for true free trade, and Trump is gambling that in a truly free market, America wins.
Second, the stock market is grossly overvalued, with Price-to-Earnings ratios completely out of whack. As happened during the Obama administration, when regulations went up, and the administration waged war against any innovation that wasn’t part of the green energy scam (remember Solyndra?), investors stopped putting their money in actual businesses and, instead, just parked it in the market. This parking created a nice bubble that encouraged more parking.
However, the market is fundamentally intended to reflect the real value of the companies that have stock for sale. When the distance between a company’s value and its stock prices becomes too great—that is, when the bubble grows too big—it will pop. Trump knows this. He figures he’s going to get the pop out of the way immediately, given that it cannot be avoided.
But here’s the kicker: Trump is planning on a soft landing from the stock market decline and from the effect of the tariffs. How? Well, I’m glad you asked.
First, as Ungar-Sargon pointed out, companies are already bringing businesses to America, which will strengthen the job market, offsetting increased prices.
Second, Trump is unchaining America’s energy sector. When energy is cheap, everything else is cheap. In other words, even as tariffs drive some prices up, cheap energy will drive all prices down.
Third, as noted, Trump is gambling that foreign manufacturers need America more than America needs them, so they’ll follow Colombia’s and Israel’s lead by dropping their tariffs. In other words, as noted above, Trump’s tariffs are negotiating tools, not permanent market impediments.
So, while I cannot allay my son’s fears because they’re driven by leftist media, I’m not worried. I’m optimistic. The best is yet to come.
Image: X screen grab.