Tariff Reprieves Won't Repair Trust In America

The bond market spoke; Donald Trump blinked. The lettuce theory of Liz Truss holds true: No leader, not even one who has shrugged off assassination attempts and a fraud trial, can remain steadfast in the face of a policy-induced meltdown that punishes voters it aims to protect. The question is: What now?

What’s clear from markets is that the 90-day reprieve from worst-case tariffs on “any country, except for China” is by no means a back-to-square-one moment. The dollar’s haven status has been hurt, while Bloomberg Economics still expects stagflation in the US and a hit to growth in the European Union. The US remains a place where policy uncertainty is high, where tariffs can jump by double digits in days and where social-media influencers wield power over generals. This uncertainty is what deters investment and hurts economic confidence, rather than just tariffs.