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Economists are trying to quantify what Trump’s trade wars could do to the economy. There’s little precedent

He really means it. Until a week or two ago, President Donald Trump’s conflicting statements left open a strong possibility that the leader of the free world was threatening sweeping tariffs as a cudgel to extract better terms from exporters, as well as succeed in pushing Canada and Mexico to curb the smuggling of lethal drugs across our borders, and that he wouldn’t unleash a trade war if he got all or even part of what he wanted. Now, it’s becoming increasingly clear that the president is determined to do exactly what friendly governments and consumers and businesses from New York to Sydney feared but didn’t really believe could happen in this day and age: reverse decades of global free trade, and build another “wall,” not the barrier along the Mexican border, but a protectionist barricade around America that repels even our closest allies and trading partners. That realization has sent stocks skidding. Following a peak of Trumpian euphoria reached in mid-February, the S&P 500 has tumbled 11% into correction territory as of market close on March 13, while the Nasdaq Composite has tumbled 16%.
Trump’s stated plan all along: impose tariffs of never-before-witnessed weight, mostly at 25%, on most if not virtually all imports from our four largest trading partners, China, the EU, Mexico, and Canada. It’s been a start-stop-reverse process. But now, Trump’s actions are matching his fiery rhetoric. Trump got going in early March by doubling import duties on China from 10% to 20%. In early March, he hit a broad range of products from Canada and Mexico with 25% tariffs. At the same time, he partially retreated by granting a one-month reprieve on one-third of exports from the Great White North and one-half from our southern neighbor covered by the USMCA free trade agreement he himself had negotiated in late 2018. A call to the Oval Office placed by CEOs of the Big Three automakers won them a comparable 30-day reprieve for cars and parts from Canada and Mexico. Now he’s targeting global steel and aluminum, EU textiles, apparel, and agricultural products, and sundry other categories for future tariffs.
Trump’s targets are already firing back. So far, the EU, Canada, and China have announced $100 billion in new tariffs on U.S. imports to counter Trump’s offensive. Mexican President Claudia Sheinbaum blasted the steel and aluminum levies as “offensive, defamatory, and without support” and vowed to unveil tough countermeasures shortly. Asked by reporters if he’d reconsider the tariff wave planned for April 2, Trump responded, “We’re not going to bend at all.”
Since World War II, America’s never remotely hit this many countries with tariffs this high. The experiment is all so new that even approximating the impact on things like GDP and employment is difficult. But according to the world’s past experience with even much more modest protectionist measures, the overall course is predictable—and amounts to a radical wrong turn.
Tariffs explained—and why Trump loves them
To grasp why Trump’s the first postwar president to embrace big tariffs at all, let alone as a central economic strategy, it’s critical to understand his worldview. For this self-proclaimed master of the deal, the overriding force restraining U.S. prosperity is the imbalance between the goods we make and consume stateside or send oversees, and everything else we buy from abroad. Put simply, Trump is haunted by our “trade deficit” for goods.
In Trump’s telling, our trading partners rig the system to maximize sales in their home markets for products made within their borders, and minimize competition from our exports. In the contest, we’re like tennis players forced to start every game down love-30. Meanwhile, says Trump, past leaders have left the U.S. naively open territory to the inflow of goods produced in Shanghai, Ontario, or Monterrey that grab sales from the cars and steel produced in Michigan, Wisconsin, and Pennsylvania. Trump regards the gulf between the dollars we’re dispensing for imports, and the lesser euros, yuan, and pesos we’re collecting on exports, as a deadweight that severely restrains GDP growth, shutters plants, and kills jobs.
His solution for shrinking that gap: the big tariffs that render goods from abroad much more expensive within our borders, digging a protective moat that encourages the stateside construction of factories for the likes of chips and autos—industries where U.S.-based players now struggle in outdueling cheaper versions made in China or Canada. Trump seeks to build a new paradigm where the U.S. manufactures a huge share of the products we now import, right in the U.S.A., notably across the industrial heartland. That way, our consumers and businesses would be sending hundreds of billions less of our dollars abroad to buy foreign-made goods, and spending the greenbacks here at home, sparking a boom in factory-building and a renaissance in American manufacturing. That dynamic would lower or eliminate that chasm between the immense dollars flowing out and the relatively piddling foreign currency coming in that so favors commercial counterparts and for Trump, represents America’s overriding economic problem. For the president, fixing that shortfall in trade represents the nation’s biggest opportunity for revival.
Trump doesn’t actually use the words “U.S. trade deficit” in his speeches or interviews. This macro, wonky term mainly appears in his policy papers, where his economic team vilifies the overall “trade deficit” and extolls the necessity of shrinking it. Instead, the president keeps pounding on how our import-export gaps with individual nations are victimizing the U.S. Those numbers prove that all our major trading partners are fleecing us, Trump insists. As he told Fox News’s Maria Bartiromo on March 9, the U.S. “has been ripped off from every nation in the world, every company outside in the world.”
To hammer home that point, Trump cites highly exaggerated numbers for the deficits with the four giants we do the most business with, again suggesting that these overstated gorges represent losses for the U.S. and bounty for the invaders. At the World Economic Forum in January, Trump declared that the U.S. has a “$200 billion or $250 billion” deficit with Canada, and that our northern cousin “wouldn’t be a viable country” benefiting from their surplus achieved at our expense. “We have a deficit with Mexico of $350 billion,” he declared in February on Fox News. At a cabinet meeting on Feb. 27, Trump told reporters, “The EU has really taken advantage of us … We have about a $300 billion deficit with the EU.” Also last month, he alleged on Fox News Radio that the U.S. faces a canyon in China’s favor “like we’ve never seen before” of “over $1 trillion.” Add it all up, and Trump is maintaining that the U.S. is suffering big-time from a $2 trillion trade deficit with the Big Four alone.
Those numbers aren’t even close. The true figures for Canada and Mexico are roughly one-third and half of what Trump claims, and his total for those four leading exporters to the U.S. is actually $709 billion, around one-third of Trump’s “rip-off” sum. (Our total deficit in goods was $971 billion, less than half what Trump claims for the Big Four alone.) The deficit with China hasn’t reached new highs at all, and is in fact going the other way: It’s shrunk by 40% in the past six years. Nevertheless, our divergence between imports and exports is huge and growing. The shortfall in goods expanded from $846 billion in 2019 to $1.2 trillion last year, and in January broke an all-time monthly record, vaulting to $156 billion.
The real issue is whether these deficits represent the near-crisis, and opportunity for repair so rich it merits “disruption,” that Trump’s advertising, or that the willingness of foreigners to finance our lavish government and consumer spending may be a good thing.
Why economists by and large despise tariffs
In the opinion of all the noted economists I interviewed for this story, and the extensive studies dedicated to the past impact of tariffs—the Trump 2018–19 version provides an informative case study—the president’s template will do nothing to achieve its goal of narrowing the gorge between America’s imports and exports. “It’s not clear why a trade deficit’s a problem in the first place, because nations are reinvesting the dollars we send them right back in the U.S.,” says economist John Cochrane of Stanford’s Hoover Institution. “Canada and Mexico have placed big bets on integrating with the U.S. It’s not great economic policy to hit them with tariffs and insult them at the same time we’re trying to convince them to cut imports from China.”
Adds Andrew K. Rose, former dean of UC Berkeley’s Haas School of Business and now dean of the NUS Business School in Singapore, as well as coauthor of a detailed study on tariffs: “Overall, Trump’s tariff policy is a disaster. Just look at the uncertainty alone. No one benefits from that, it just delays investment, and that’s unambiguously bad.” In seeking to enrich this nation, notes Rose, it’s the worst of trades “to go after your top allies in trade.”
Perhaps the best summary comes from Steve Hanke of Johns Hopkins University. “You can’t win a trade war,” he says. “Starting one, as Trump is doing, only ensures that both sides lose.”
It’s hard to estimate the potential damage to the U.S. economy for two basic reasons. First, though Trump’s stance is hardening, it’s impossible to predict how much of his current plan he’ll scuttle if he wins big concessions on trade, or if the impact is so crushing and the public and business backlash so strong that he decides to switch course. Second, we have absolutely no precedent for tariffs the size that Trump’s proposing. Still, studies suggest that even if Trump enacts portions of his agenda, the blow to U.S. prosperity will prove severe.
The mind-spinning part is that we’ve never seen an increase this big, in almost 100 years of U.S. history. The Smoot-Hawley tariff program of 1930, widely branded as a major force in deepening and perpetuating the Great Depression, hiked the levies on U.S. imports much less than the breathtaking wallop promised under the Trump plan. That law lifted rates just over five points, from 13.5% to 19.5%. Trump’s crusade would beat Smoot-Hawley twofold.
In the Middle Ages, cartographers tagged untamed, treacherous, unexplored territory by the slogan, “Here lie dragons.” Donald Trump will be dueling dragons soon, and his best move would be one he’s good at, declare victory, lower his broadsword, and retreat.
This story was originally featured on Fortune.com
Tech News
Democratic Party fractures in government shutdown fight as activists back primary challenges to supporters of GOP bill

The Democratic Party was fracturing Friday as a torrent of frustration and anger was unleashed at Senate Democrats, led by Sen. Chuck Schumer, who faced what they saw as an awful choice: shut the government down or consent to a Republican funding bill that allows President Donald Trump to continue slashing the federal government.
After Schumer announced that he would reluctantly support the bill, he bore the brunt of that anger, including a protest at his office, calls from progressives that he be primaried in 2028 and suggestions that the Democratic Party would soon be looking for new leaders.
Nine other members of the Democratic Caucus — a contingent of mostly swing-state and retiring senators — eventually joined Schumer in voting to advance the Republican funding proposal, providing crucial support to bring it to a final vote. It passed late Friday with Sens. Jeanne Shaheen of New Hampshire and Angus King of Maine voting with Republicans in favor.
Since their election losses, Democrats have been hunkered against a barrage of Trump’s early actions in office, locked out of legislative power and left searching for a plan to regain political momentum. But as Schumer let pass one of the rare moments when the party might regain leverage in Washington, the Democratic Party erupted in a moment of anger that had been building for months.
Many in the party felt the New York Democrat was not showing sufficient fight, arguing that a government shutdown would have forced Trump and Republicans to the negotiating table. Yet for Schumer, who has led Senate Democrats since Trump took office in 2016, the choice ultimately came down to preventing a shutdown that he believed would only hand Trump more power and leave his party with the blame for disruptions to government services.
“A shutdown would allow DOGE to shift into overdrive,” Schumer warned on the Senate floor Friday, referring to the Department of Government Efficiency effort led by Elon Musk.
Schumer voted no on the final vote for the funding bill, which only needed a simple majority to pass. Nonetheless, House Democrats released a stream of angry statements and social media posts aimed at Schumer.
Democratic Rep. Troy Carter of Louisiana shared a photo of Trump and Schumer engaged in conversation with the caption, “A picture is worth a thousand words!”
Even in the Senate, hardly any Democrats were speaking up in support of Schumer’s strategy Friday. It was a remarkable turn for the longtime Democratic leader, leaving him standing practically alone.
Speaker Emerita Nancy Pelosi, his longtime ally and partner in funding fights of the past, said in a statement, “Let’s be clear: neither is a good option for the American people. But this false choice that some are buying instead of fighting is unacceptable.”
Pelosi added that the senators should listen to the women who lead appropriations for Democrats, Rep. Rosa DeLauro of Connecticut and Sen. Patty Murray of Washington. They had proposed a 30-day stopgap plan instead of the Republican proposal that provides funding until September. The Republican bill will trim $13 billion in non-defense spending from the levels in the 2024 budget year and increase defense spending by $6 billion.
As House Democrats, who almost all voted against the bill earlier this week, concluded a retreat in northern Virginia Friday, they also called for their Senate colleagues to show more fight. House Democratic leadership rushed back to the Capitol to hold a news conference and urge senators to reject the bill.
“We do not want to shutdown the government. But we are not afraid of a government funding showdown,” Jeffries said.
He also repeatedly declined to answer questions about whether he had confidence in Schumer.
Other Democrats, such as Kentucky Gov. Andy Beshear, who is seen as a potential presidential candidate in 2028 and also visited the Democratic retreat, called for a broader movement. He mentioned the recent 60th anniversary of peaceful civil rights protests in Selma, Alabama, and argued that Democrats need to find “collective courage.”
“When those individuals marched, there wasn’t one voice,” Beshear said. “There was a collective courage of that group that changed the world. That day opened up the eyes of the country to what was really going on.”
Some were ready to start marching.
“We’re ready to get out of this building and head back to the Capitol at any moment and prevent the government from shutting down,” said Rep. Greg Casar of Texas, chair of the Congressional Progressive Caucus.
“Now is the moment for Democrats to draw a line in the stand and say that we stand very firmly on the side of working class people and against the ultra-rich that are trying to corrupt our government for themselves,” he added.
Meanwhile, some of the nation’s most influential progressive groups warned of serious political consequences for Senate Democrats and predicted a fierce backlash when members of Congress return home next week.
Ezra Levin, co-founder of Indivisible, which has organized hundreds of protests across the nation, said that nearly 8 in 10 of the group’s activists support primary challenges against “Senate Dems who cave on the GOP bill.”
He wrote on social media that the vast majority of those Democratic activists plan to express their anger at town halls or other public events next week. MoveOn, another progressive group that claims nearly 10 million members nationwide, predicted that its activists would also demand answers from Democratic officials in the coming days
“Clearing the way for Donald Trump and Elon Musk to gut Social Security, Medicare and Medicaid is unacceptable. It’s past time for Democrats to fight and stop acting like it’s business as usual,” said Joel Payne, a spokesperson for MoveOn.
Senate Democrats were also mostly unwilling to speak up to defend Schumer’s move. Sen. Raphael Warnock, a Georgia Democrat, even suggested that the party should be looking for new leaders in the coming years.
“I think come ’26, ’28, we’ll get some new leadership,” he said. His office later said Warnock was answering the question broadly.
Mostly, though, senators just lamented that they had been jammed by a Republican Party that has found a new sense of unity under Trump. For years, House Republicans have not been able to muster votes for government funding on their own, forcing them into bipartisan negotiations. This time, they passed the bill on party lines and left Washington.
“We’re stuck with two bad choices presented by a unified Republican front,” said Sen. Mark Warner, a Virginia Democrat.
He voted against the bill, yet said of Schumer’s decision: “These are tough, tough calls.”
This story was originally featured on Fortune.com
Tech News
Intel’s new CEO gets pay package valued at about $69 million

Incoming Intel Corp. Chief Executive Officer Lip-Bu Tan, who was named to the position this week, will receive compensation valued at about $69 million if he reaches targets over the coming years.
The package includes a salary of $1 million, plus a 200% performance-based bonus, the chipmaker said in a filing Friday. It also includes $66 million in long-term equity awards and stock options and new-hire incentives.
Separately, Tan agreed to buy $25 million in Intel shares in the first 30 days of taking the job. “Lip-Bu’s purchase reflects his belief in Intel and commitment to creating shareholder value,” the company said in a statement.
Earlier this week, Intel announced Tan was filling the role left vacant when the board ousted his predecessor, Pat Gelsinger. The semiconductor industry veteran, who previously served as an Intel board member, is tasked with trying to return the company to the forefront of an industry that it dominated for decades.
Tan, 65, will assume the role on March 18, the company said Wednesday. He will rejoin the board as well after stepping down in August 2024.
Intel’s stock has rallied this year, gaining 20%, including a surge of 15% on Thursday following the announcement of Tan’s appointment.
This story was originally featured on Fortune.com
Tech News
Trump’s staff cuts at federal agencies overseeing US dams could put public safety at risk, critics warn

Trump administration workforce cuts at federal agencies overseeing U.S. dams are threatening their ability to provide reliable electricity, supply farmers with water and protect communities from floods, employees and industry experts warn.
The Bureau of Reclamation provides water and hydropower to the public in 17 western states. Nearly 400 agency workers have been cut through the Trump reduction plan, an administration official said.
“Reductions-in-force” memos have also been sent to current workers, and more layoffs are expected. The cuts included workers at the Grand Coulee Dam, the largest hydropower generator in North America, according to two fired staffers interviewed by The Associated Press.
“Without these dam operators, engineers, hydrologists, geologists, researchers, emergency managers and other experts, there is a serious potential for heightened risk to public safety and economic or environmental damage,” Lori Spragens, executive director of the Kentucky-based Association of Dam Safety Officials, told the AP.
White House spokesperson Anna Kelly said federal workforce reductions will ensure disaster responses are not bogged down by bureaucracy and bloat.
”A more efficient workforce means more timely access to resources for all Americans,” she said by email.
But a bureau hydrologist said they need people on the job to ensure the dams are working properly.
“These are complex systems,” said the worker in the Midwest, who is still employed but spoke on condition of anonymity for fear of possible retaliation.
Workers keep dams safe by monitoring data, identifying weaknesses and doing site exams to check for cracks and seepage.
“As we scramble to get these screenings, as we lose institutional knowledge from people leaving or early retirement, we limit our ability to ensure public safety,” the worker added. “Having people available to respond to operational emergencies is critical. Cuts in staff threaten our ability to do this effectively.”
A federal judge on Thursday ordered the administration to rehire fired probationary workers, but a Trump spokesperson said they would fight back, leaving unclear whether any would return.
The heads of 14 California water and power agencies sent a letter to the Bureau of Reclamation and the Department of Interior last month warning that eliminating workers with “specialized knowledge” in operating and maintaining aging infrastructure “could negatively impact our water delivery system and threaten public health and safety.”
The U.S. Army Corps of Engineers also operates dams nationwide. Matt Rabe, a spokesman, declined to say how many workers left through early buyouts, but said the agency hasn’t been told to reduce its workforce.
But Neil Maunu, executive director of the Pacific Northwest Waterways Association, said it learned more than 150 Army Corps workers in Portland, Oregon, were told they would be terminated and they expect to lose about 600 more in the Pacific Northwest.
The firings include “district chiefs down to operators on vessels” and people critical to safe river navigation, he said.
Their last day is not known. The Corps was told to provide a plan to the U.S. Office of Personnel Management by March 14, Maunu said.
Several other federal agencies that help ensure dams run safely also have faced layoffs and closures. The National Oceanic and Atmospheric Administration is laying off 10% of its workforce and the Federal Emergency Management Agency’s National Dam Safety Review Board was disbanded in January.
The cuts come at a time when the nation’s dams need expert attention.
An AP review of Army Corps data last year showed at least 4,000 dams are in poor or unsatisfactory condition and could kill people or harm the environment if they failed. They require inspections, maintenance and emergency repairs to avoid catastrophes, the AP found.
Heavy rain damaged the spillway at California’s Oroville Dam in 2017, forcing nearly 190,000 residents to evacuate, and Michigan’s Edenville Dam breached in storms in 2020, the AP found.
Stephanie Duclos, a Bureau of Reclamation probationary worker fired at the Grand Coulee Dam, said she was among a dozen workers initially terminated. The dam across the Columbia River in central Washington state generates electricity for millions of homes and supplies water to a 27-mile-long (43-kilometer) reservoir that irrigates the Columbia Basin Project.
“This is a big infrastructure,” she said. “It’s going to take a lot of people to run it.”
Some fired employees had worked there for decades but were in a probation status due to a position switch. Duclos was an assistant for program managers who organized training and was a liaison with human resources. The only person doing that job, she fears how others will cover the work.
“You’re going to get employee burnout” in the workers left behind, she said.
Sen. Alex Padilla, a California Democrat who pushed a bipartisan effort to ensure the National Dam Safety Program was authorized through 2028, said, “the safety and efficacy of our dams is a national security priority.
“Americans deserve better, and I will work to make sure this administration is held accountable for their reckless actions,” Padilla said.
This story was originally featured on Fortune.com
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