Politico‘s Playbook is a widely-read, twice-daily briefing that provides concise summaries of the day’s top stories. Anyone who read the Wednesday morning edition could be forgiven for calling their stockbroker and telling them to sell everything in their portfolio. It began:
HE REALLY DID IT: President Donald Trump’s “reciprocal” tariffs came into force at midnight, and this morning we awaken to a different world. The free trade system that America has embraced and nurtured since the mid-1930s has been officially torpedoed by direct order of the president. America’s trade barriers are now higher than at any point in the past 100 years, and key trade partners Canada, China and Europe are all preparing to hit back. And Trump made clear last night that this is not the high-water mark, with tariffs on the pharmaceutical industry coming next.This is Trump’s America: You all saw the chart — now it’s reality for importers (and soon, shoppers) across the country. … It’s unclear exactly how quickly these and many others tariffs will filter through to product pricing and consumer demand … but filter through they surely will.
Politico mistakenly characterizes the current state of global trade as a “free trade system that America has embraced and nurtured since the mid-1930s.” In reality, the widespread use of tariffs and non-tariff barriers by most countries makes today’s system anything but free—particularly for the United States. And the only thing that changed between Tuesday and Wednesday is that China raised its tariff rate on U.S. imports in response to a second hike by the U.S.
Trump has recognized the inequities in global trade since the 1980s. Throughout his campaign, he repeatedly emphasized his intention to rebalance the current system—and given his decisive victory, it’s clear voters liked what they heard.
It was likely the sheer scale of the tariff program unveiled on “Liberation Day” that caught financial markets off guard, triggering an immediate and relentless death plunge in prices.
The current stock market turmoil is driven more by emotion—as is often the case—than by the actual fundamentals of the companies that make up the major indices. If you think of the stock market as a barometer of fear and greed, we are now at a moment of peak fear.
History shows that financial markets eventually stabilize—and we saw early signs of that on Monday, as buyers stepped in near the closing bell. That momentum carried into Tuesday’s session. However, the rally quickly unraveled when news broke that Trump had raised the tariff rate on Chinese imports to 104%. Overnight, Beijing responded by hiking its rate on U.S. imports into China to 84%. Mary wrote about that story here.
Right now, it’s a headline-driven market—and the legacy media is amplifying the market’s volatility far more than the current conditions justify.
The media is sensationalizing the escalation in hostilities between China and the U.S. while ignoring the 70 countries that have already lined up to negotiate with us. ‘Let’s see: 1 vs. 70. We’ll look at the one.’
Treasury Secretary Scott Bessent joined Fox Business News host Maria Bartiromo on Wednesday morning. Commenting on China’s latest move, he said, “It’s unfortunate that the Chinese don’t want to come and negotiate. … They have the most imbalanced economy in the history of the modern world, and I can tell you that this escalation is a loser for them.”
“They are the surplus country,” he pointed out. “Their exports to the U.S. are five times our exports to China. They can raise their tariffs, but so what?”
Bartiromo noted that it feels like we are in a “soft war” with China. She is right. The U.S. trade imbalance with China is just one of the issues currently causing friction in the relationship.
Bessent urged China to take responsibility for, and put an end to, the flow of chemical precursors used to produce fentanyl—a drug that kills 100,000 Americans each year. He said, “Distributing drugs in China is punishable by death. Why don’t they apply the same standards to the people who are exporting these chemicals to the U.S.?”
It goes without saying that China has not been an honest broker on the world stage. They are notorious for stealing hundreds of billions of dollars’ worth of intellectual property each year—a practice that includes forcing foreign companies operating in China to hand over proprietary information.
Chinese hackers have also been linked to a wide range of cyberattacks targeting U.S. government agencies, defense contractors, universities, and corporations.
The Chinese government is also allegedly engaged in widespread propaganda efforts aimed at influencing U.S. politicians, media, universities, and corporate leaders.
China’s non-tariff barriers have also drawn sharp criticism from Trump. China has been accused of manipulating its currency to boost exports, heavily subsidizing domestic industries to undercut American competitors, dumping goods at below-market prices to drive U.S. manufacturers out of business, and failing to open its markets as promised.
Given the circumstances, Trump has every reason to take a tough stance on China—even if some see it as excessive.
The bottom line is that despite the short-term discomfort—which I’ll admit is unsettling—this was a situation that demanded action. The cost of doing nothing would have been far greater. For decades, our trading partners have taken advantage of the U.S., costing us billions of dollars annually. Sooner or later, the issue would have to be confronted. And if not now, when?
Trump is taking an enormous risk—arguably the most politically perilous move I’ve ever seen a U.S. president take. If the tariffs succeed, the U.S. will secure its position as the world’s dominant superpower for decades and end China’s dream of surpassing us.
If they fail, Trump’s presidency will likely be remembered as a failure—and the U.S. economy could take years to recover.
But at the end of the day, Trump is a businessman—and so are several of his top economic advisors, including Bessent and Commerce Secretary Howard Lutnick and they likely know what they’re doing.
Instead of allowing the media to dictate our foreign policy, why don’t we give them a chance?
We just might be pleasantly surprised!
Elizabeth writes commentary for Legal Insurrection and The Washington Examiner. She is an academy fellow at The Heritage Foundation. Please follow Elizabeth on X or LinkedIn.
CLICK HERE FOR FULL VERSION OF THIS STORY