Original author: Noah Smith
Original translation: Block unicorn
The US stock market continues to crash as investors realize that Trumps outrageous tariffs are not being reversed anytime soon:
U.S. stock futures fell late Sunday as the White House remained tough following a historic two-day stock market rout after President Trump introduced shockingly high tariff rates on most major U.S. trading partners... Dow Jones Industrial Average futures fell 1,531 points, or 4%, late Sunday, pointing to another brutal trading day on Monday. SP 500 futures fell 4%. Nasdaq 100 futures fell 4%.
SP 500 futures have fallen 15% in just three trading days. Calling this a “crash” is no longer an exaggeration. In just a few days, Trump’s policies have caused more than $5 trillion in American wealth to disappear. If Monday’s market develops as expected, that number could quickly become $10 trillion. And that’s just the first three days. Many investors still expect the tariffs to be temporary:
This means that the crash we’ve already experienced may be just the beginning of what’s to come.
The American public is panicking about this wanton economic destruction, and with good reason. Support for tariffs has never been above 50%, and now it’s at rock bottom. The economy, jobs, and international trade have become the issues that Americans are most dissatisfied with Trump, as has foreign policy:
Negative sentiment toward the U.S. government’s economic policies has surged to levels higher than during the Great Depression:
Its not just the stock market. Most Americans expect tariffs to have a negative impact on the real economy, meaning higher unemployment and lower incomes:
Private forecasters are increasing the odds of a near-term recession. Prediction markets agree.
Meanwhile, crazy “King” Trump is bragging about crashing the stock market:
Even some of Trump’s allies and supporters are starting to get uneasy, with Bill Ackman declaring “we are headed for a self-induced economic nuclear winter” and Elon Musk calling for a tariff-free free trade zone with Europe. Musk also slammed Peter Navarro, Trump’s economic adviser and perhaps the most influential proponent of the tariffs.
Now, its important to remember that Congress can always step in and stop this madness. The Constitution gives Congress the power to enact tariffs, and Trump is able to unilaterally impose these tariffs only because Congress has given the president that power through a series of laws. At any time, Congress can pass a new law and make these tariffs go away.
In fact, there are at least two such bills being introduced right now—one by Chuck Grassley and Maria Cantwell in the Senate, and another by Don Bacon in the House. Thats great! I hope they pass, even if Trump vetoes them. If things get bad enough, and Trumps approval rating drops enough, Democrats and Republicans could come together to form a two-thirds majority to override the veto and end this tariff nightmare.
But youll notice right away that of the three lawmakers leading the fight against the tariffs, two -- Bacon and Grassley -- are Republicans. Democrats, by and large, havent been at the forefront of the fight.
That doesnt mean Democrats have been completely silent. Many have issued statements opposing the tariffs, like this one from Nancy Pelosi:
But so far, there has been no rhetoric as fierce as the progressives’ attack on Elon Musk’s DOGE. Bernie Sanders responded to DOGE with a “Stop the Oligarchs” speaking tour that drew huge crowds. But his response to tariffs was cautious and ambiguous:
As someone who helped lead the fight against disastrous, unrestricted free trade agreements with certain countries in Asia and South America, as well as other low-wage nations, I understand that we need trade policies that benefit American workers, not just the CEOs of large corporations. This includes targeted tariffs, which can be a powerful tool to prevent companies from outsourcing American jobs and factories overseas.
But the bottom line is this: We need a rational, thoughtful, and fair trade policy. Trump’s blanket tariffs are not the right approach. We don’t need a blanket and arbitrary sales tax on imports that raises prices on goods that the American people desperately need. We should be doing everything we can to keep prices down, not to make them ridiculously high.
Some Democrats are even teetering on the edge of defending Trump’s tariffs. Congressman Chris DeLuzio of Pennsylvania issued a statement criticizing the implementation of Trump’s policy but appearing to support the general approach and calling for price controls to combat tariff-induced inflation:
I support tariffs as a tool to deal with bad actors and trade cheats. I support tariffs used strategically in conjunction with strong industrial and pro-worker policies to protect American jobs and consumers. I support aggressively renegotiating trade deals like the USMCA to get the best deal for hardworking Americans like us in Western Pennsylvania…I do not support the decades-old Washington consensus on free trade that has destroyed American industry and jobs and left us with far-flung supply chains that routinely fail. It’s a bad deal for those of us in the Rust Belt and beyond. I also do not support allowing foreign trade cheats to undermine American jobs by exploiting their workers…The President has the power to stop companies from price gouging under the guise of tariffs—why isn’t he using that power?
House Democrats released a video of DeLuzio making a similar statement, adding text suggesting limited support for Trump’s overall approach:
Frankly, this is insane. No president has ever done as much to wreak havoc on the stock market and, soon, on the U.S. economy as Trump. Only the Iraq War can rival it in policy mistakes over the past century, and that disaster unfolded over years. Democrats now have a golden opportunity to bash Trump from every rooftop and ride an unprecedented wave of anger to sweeping congressional victories in the 2026 midterm elections. Instead, they issue bland statements, get bogged down in minutiae, and let Republicans take the lead in defending American prosperity against their mad king.
What’s going on? If this was a strategic, calculated move by the Democrats — to let the Republican coalition tear itself apart and then exploit their divisions — I’d expect Democrats to simply issue more statements like Pelosi’s and less tangled, semi-defensive tariff statements like DeLuzio’s. Instead, it seems clear now that Trump is actually enacting the great counterattack against neoliberalism that progressives have dreamed of for decades, and Democrats have no idea how to deal with the fact that this is rapidly evolving into a complete disaster.
Trump’s embrace of tariffs is in fact a political reversal. For decades, it was Democrats and the labor left who worried that trade deals were undermining organized labor in the United States, sending American jobs to low-wage countries, and harming the environment. More recently, it was progressives who identified neoliberalism — including free trade as one of its main pillars — as the core of America’s problems.
“Anti-neoliberalism” is the core idea that holds the modern progressive movement together. Socialist critics throw the word “neoliberalism” at anything they don’t like. Progressive think tanks like the Roosevelt Institute and the Hewlett Foundation fund thinkers and events dedicated to deciding what comes after neoliberalism (I’ve participated in some of these events myself). The Warren movement—an intellectual elite project that has considerable influence in the Biden administration—began to put this concept into practice, taking on key policy tools like antitrust, price controls, and increased support for unions. More national security-focused liberals, like Jake Sullivan and Jennifer Harris, focus more on industrial policy (something I also strongly support). The Sanders movement—a populist movement that has influenced policy but never held power—calls for more radical policies, including punitive high taxes and nationalization of industry.
You’ll notice that tariffs and trade deficits don’t feature prominently in these lists. Anti-neoliberalism is indeed skeptical of free trade, and Biden has implemented strategic, targeted tariffs on specific Chinese products. But tariffs have never been a very important part of anti-neoliberal ideology, and few progressives cite trade deficits as evidence that the United States is being taken advantage of by other countries. Even the most ardent Bernie supporter would probably balk at the level of trade destruction that Trump is now attempting to enact (and Bernie himself certainly would).
But if the progressive movement against neoliberalism was inching along in the slow lane, Trump has, like a sports car, raced straight through it. Trump has now seized the banner of anti-neoliberalism and is pushing it further, in directions that the movement’s former leaders never dreamed of.
Now, progressive leaders worry that if they fight Trump by raising the banner of free trade, and succeed, their entire anti-neoliberal project will be thrown out along with the tariffs. I think this is a legitimate concern. Trump has already made most Americans view free trade more positively, and as the economic damage from tariffs spreads, the backlash is likely to intensify further:
We may indeed be witnessing a generational shift back toward free trade. This would undoubtedly jeopardize the progressives’ generation-long anti-neoliberal project.
This possibility has anti-neoliberal thinkers and activists a bit panicked, so they are now spouting off:
Such an approach would lead to the complete defeat of the progressive movement. Not just because Democrats who adopt this attitude would let a golden opportunity for power slip through their notoriously clumsy hands (although that is certainly true). But by refusing to unequivocally condemn and oppose the greatest act of economic self-destruction in modern American history, progressives would hand over a major ideological victory to their neoliberal opponents within the party and consign their nascent revolution to the dustbin of history.
Perhaps some progressives imagine that after the damage Trump has done, Democrats will return to power but keep some of Trump’s tariffs. This has happened before—Biden, for example, kept in place tariffs on China that were in place during Trump’s first term. Progressives might console themselves by saying that Trump is moving the Overton Window for them, and after he’s gone, they can quietly come back and offer a more moderate version of anti-neoliberalism as a compromise.
I highly doubt it will happen. The reason the tariffs from Trump’s first term stayed in place is that they didn’t do much damage. When Americans are experiencing real economic pain — such as after the 2008 financial crisis — they tend to turn radically against whatever is perceived to be causing that pain. After the financial crisis, they turned against the financial industry, resulting in the most stringent regulation of that industry since World War II. After Enron, Sarbanes-Oxley may have gone too far in regulating corporate accounting. And after the Smoot-Hawley tariffs of 1929 — far smaller than Trump’s now — free trade became an ethos that lasted generations.
When this is all over, if Americans think that “anti-neoliberalism” means tariffs, they will build shrines to Milton Friedman in their front yards. If industrial policy, antitrust, and higher taxes are tied to tariffs, those will be abandoned, too. Public opinion will be filled with statements like:
If progressives and the Democrats who listen to them want to salvage anything from their plan—and I agree that there are important parts worth salvaging—they have to come up with something better than, “Well, tariffs are good if implemented properly, but these Trump tariffs were poorly implemented, blah blah blah.”
Fortunately, it should be easy to attack Trump’s tariffs with maximum force without talking about “neoliberalism” or other grand ideological concepts. They can say this: tariffs will crush the American working class. They can say this: tariffs will greatly accelerate the deindustrialization of the United States and put factory workers out of work. They can even say this: tariffs will make the middle class poorer, increase unemployment, destroy retirement savings, and erode purchasing power.
You don’t have to tie anything to “neoliberalism,” or “elites,” or “the financial class,” or anything like that. You don’t have to frame it as part of some broader ideological contest. This kind of thinking may resonate with the class of Democratic staffers who run lawmakers’ Twitter accounts, but the average voter doesn’t really need much information beyond “tariffs are bad, therefore Trump is bad.” Tariffs were never a big part of the progressive program, and Franklin D. Roosevelt significantly reduced them with the Trade Agreements Act of 1934.
And you can still say industrial policy and antitrust are good! You don’t have to link these things together in your rhetoric, even if in your own thinking they are linked together through some “neoliberal” theory. Just leave the tariffs alone and spare the American people from university lectures on ideology.
Also, Democrats really need to stop trying to turn this into a class warfare story. Some Democrats have weakly tried to claim that the rich benefit from tariffs:
No one is stupid enough to believe this. Everyone knows that the rich own a lot of stocks, and when the market crashes, the rich will
Suffered a huge blow.
Class struggle has always been a weak platform for trying to take back the country. But trying to shoehorn tariffs into a “billionaires versus everyone else” narrative is simply ridiculous. This really is one of those Pareto improvement situations they teach you in Econ 101, where a dumb policy hurts both billionaires and working-class Americans. A rising tide really does lift all boats when you stop a lunatic from drilling holes in the hull.
In short, Democrats and Progressives need to take the lead in the fight against the mad King and his tariff madness. Tariffs are clearly not a viable economic or political plan, and the people who take the lead in rolling them back will be the de facto leaders of American economic policy. Be those people.
