Trump’s Tariffs: Lighting the Fuse Beneath a Fragile Economy was published in February 2025: I Have Updated The Essay Including the original video and an updated audio message, April, 2025.

Geopolitical economy hour. from February, Hudson and Wolff audio from April 3rd.

The Audio segment above the video is an audio version of my February essay. My April Update Follows, without audio. Read the essay update and listen to the Audio from Michael Hudson and Richard D. Wolff discussing the expanding Trump disaster…as follows

April 5th, 2025 Update: This essay was written to pair with the above video discussion from Geopolitical Economy Hour with Radhika Desai and Michael Hudson—where nuanced critiques of Trump’s tariff policies reveal their dangerous implications for both domestic stability and global trade dynamics. Their insights underscore and motivate my thoughts on how such measures could tip an already vulnerable system into full-blown collapse—a warning we cannot afford to ignore.

The statements and the essay belong to me and are not specifically their thinking. Though after you listen to the video, you might imagine that they might be. Trump's recent tariff policies, coupled with his chaotic economic strategies, represent a profound escalation in the systemic dysfunction that has plagued the U.S. economy for decades. His sweeping new tariffs—a 10% baseline on all imports and higher, individualized tariffs targeting countries with significant trade deficits—are emblematic of a shortsighted, destructive approach that prioritizes political posturing over economic stability. These measures will likely exacerbate inflation, deepen inequality, and accelerate the unraveling of a fragile system already riddled with vulnerabilities.

I have also included my original essay after my observations below from April 2025… read on for the big picture

Implications of Trump's Recent April 2025 Actions

1. Inflation and Economic Pain

The tariffs are expected to add nearly 2% to the Consumer Price Index in 2025, driving up costs for essential goods like food, clothing, and energy513. Lower-income households, which allocate a larger portion of their income to consumption, will bear the brunt of these price increases. For example:

• Disposable income for low-income households is projected to drop by 4%, compared to 1.6% for wealthier families7.

• Essential items like groceries and building materials will see immediate price hikes, further straining household budgets13.

This inflationary pressure is compounded by retaliatory tariffs from major trading partners like China and the EU, which will disrupt supply chains and reduce U.S. export competitiveness56.

2. Systemic Collapse

Trump's policies highlight a broader pattern of "sticking fingers in the dyke"—temporary fixes for systemic issues that are now spiraling out of control. The U.S. economy is burdened by massive debt ($36 trillion), financial instability tied to derivatives markets, and deepening inequality12. These tariffs act as accelerants to an already precarious situation:

• JPMorgan analysts warn of a 60% likelihood of a global recession if these tariffs remain in place16.

• The Federal Reserve has expressed concerns about stagflation—a toxic mix of high inflation and stagnant growth—which could lead to prolonged economic stagnation1216.

3. Fatcats Floating Along

As ordinary Americans face rising costs and job losses, wealthy elites appear insulated from the worst effects. Trump's administration continues to prioritize policies that benefit corporations and billionaires while dismissing the struggles of working-class citizens17. For example:

• Treasury officials have openly ridiculed calls for social safety nets like Social Security payments17.

• The administration's rhetoric frames access to affordable goods as irrelevant to the American dream, further alienating struggling families17.

This detachment underscores the systemic inequities that have defined U.S. economic policy for decades—policies that enrich the few while leaving the majority grappling with financial insecurity.

The Endgame: A System Beyond Repair

The metaphorical dyke holding back economic collapse is now riddled with irreparable holes. Trump's chaotic actions—declaring a national emergency under the International Emergency Economic Powers Act (IEEPA) and imposing blunt tariffs—signal desperation rather than strategy34. These measures fail to address structural issues like automation, globalization, and financialization, instead exacerbating long-term trends:

• Rising inequality: Wealth disparities continue to widen as lower-income households face disproportionate economic pain9.

• Erosion of consumer confidence: Protests and plummeting confidence levels reflect growing discontent with Trump's policies17.

• Global instability: Retaliatory measures from trading partners threaten to destabilize international trade networks further56.

The system appears poised for collapse—not because of one policy or administration but due to decades of neglect and mismanagement. Trump's actions may hasten this collapse by undermining trust in institutions and deepening economic fractures.

Conclusion

Trump's recent "brain-dead" tariff policies epitomize chaos disguised as strength. They accelerate inflation, deepen inequality, and push an already fragile system closer to collapse—leaving ordinary Americans to bear immense pain while elites cling to their privileges. The dyke holding back systemic failure is no longer sustainable; its collapse will likely redefine the U.S. economy in ways we can scarcely imagine.

MY ORIGINAL ESSAY FROM FEBRUARY FOLLOWS HERE…This essay was written to pair with the lead in FEBRUARY discussion from Geopolitical Economy Hour with Radhika Desai and Michael Hudson—where nuanced critiques of Trump’s tariff policies reveal their dangerous implications for both domestic stability and global trade dynamics. Their insights underscore and motivate my thoughts on how such measures could tip an already vulnerable system into full-blown collapse—a warning we cannot afford to ignore.

The statements and the essay belong to me and are not specifically their thinking. Though after you listen to the video, you might imagine that they might be.

Trump’s Tariffs: Lighting the Fuse Beneath a Fragile Economy

Picture this: a wildfire sweeps across California, consuming everything in its path. The flames, ferocious and unrelenting, destroy homes, businesses, and entire communities. Insurance companies, overwhelmed by the sheer scale of the disaster, begin to falter. Unable to cover the mounting claims, their collapse sends shockwaves through financial markets, affecting industries and individuals far beyond the fire’s reach. Now imagine that these wildfires are Trump’s tariffs, and the insurance industry represents the entire U.S. economy. This is not just a metaphor—it is a harbinger of what could happen when ill-conceived policies are introduced into an already unstable system. In America today, we are living in a fragile economic ecosystem—a house of cards built atop systemic vulnerabilities like massive debt, financial instability, and economic inequality. Trump’s tariffs are not just misguided; they are incendiary. They threaten to ignite a chain reaction of economic failures that could cascade into a collapse more devastating than the Great Depression. What might be manageable in a healthy economy becomes catastrophic in one as precarious as ours.

A Fragile America: A House of Cards

To understand the peril posed by Trump’s tariffs, we must first examine the fragility of the U.S. economy. While it may appear strong on the surface—with low unemployment and stock market gains—the foundation is riddled with cracks:

• Massive Debt: The national debt has soared past $36 trillion, an unsustainable burden that leaves little room for error. Tariffs may generate some revenue for the government, but they also slow economic growth, worsening fiscal imbalances.

• Systemic Financial Risks: The derivatives market—valued at hundreds of trillions of dollars—is a ticking time bomb. A sudden economic shock could destabilize financial markets and spark cascading defaults.

• Global Supply Chain Dependency: Modern industries depend on intricate supply chains that cross borders multiple times. Tariffs disrupt these networks, raising costs at every stage and reducing competitiveness.

• Economic Inequality: Rising prices disproportionately harm lower-income households already struggling with stagnant wages and high living costs.

• Eroding Consumer Confidence: Inflation has strained household budgets, weakening consumer spending—the backbone of the U.S. economy.

In this context, Trump’s tariffs are not just another policy misstep; they are a spark in a parched forest.

The Wildfire Ignites: How Tariffs Disrupt the Economy

Trump’s tariffs—such as the 25% levy on imported steel—are designed to protect American industries from foreign competition. But in practice, they act as taxes on imports, raising costs for manufacturers and consumers alike. Here’s how these policies set off a chain reaction:

1. Rising Costs for Manufacturers: Industries like automotive and construction rely heavily on imported steel and aluminum. Tariffs drive up prices for these materials, forcing businesses to either absorb the costs or pass them on to consumers.

2. Higher Prices for Consumers: Increased production costs translate into more expensive goods—cars, appliances, even infrastructure projects—reducing purchasing power and dampening demand.

3. Job Losses in Downstream Industries: For every job saved in steel production, many more are lost in industries that consume steel. Studies show that jobs in steel-consuming sectors outnumber those in steel production by as much as 80 to 1.

4. Retaliatory Tariffs: Trading partners impose their own tariffs on American exports like soybeans and machinery, further harming industries reliant on global markets.

These disruptions create a vicious cycle: rising costs lead to reduced demand, which leads to layoffs and further economic contraction.

A Narrative Example: The Cascade of Collapse

Imagine an American car manufacturer dependent on imported steel:

• The company faces higher material costs due to tariffs and raises car prices to compensate.

• Consumers balk at the higher prices and delay purchases, causing sales to plummet.

• To cut losses, the company lays off workers—not just on assembly lines but throughout its supply chain.

• Retaliatory tariffs from trading partners reduce demand for American-made cars abroad, compounding losses.

• Investors lose confidence in the company’s future prospects, leading to stock market declines.

Now multiply this scenario across countless industries—from agriculture to electronics—and you begin to see how Trump’s tariffs could trigger widespread economic collapse.

The Insurance Industry Analogy: Systemic Risks Exposed

Returning to our wildfire metaphor: just as wildfires overwhelm insurers with claims they cannot cover, Trump’s tariffs expose systemic risks in our economy that cannot be easily contained:

• Derivatives Market Instability: Many financial institutions hold derivatives tied to affected industries. A shock caused by tariffs could lead to cascading defaults reminiscent of the 2008 financial crisis.

• Global Recession Risks: The U.S., deeply integrated into global trade networks, risks triggering worldwide economic contraction through trade wars with major partners like China or Mexico.

• Erosion of Trust: Unilateral tariff policies strain relationships with allies and trading partners, undermining international cooperation at a time when it is most needed.

The result is an economy pushed past its breaking point—not unlike an insurance industry collapsing under wildfire claims.

Trump’s Policies: A Misguided Strategy

Trump’s reliance on tariffs reflects an outdated 19th-century mindset ill-suited for today’s interconnected world:

• Limited Benefits for Domestic Industries: While steel producers may see temporary gains from reduced competition, downstream industries suffer far greater losses.

• Higher Costs for Consumers: Tariffs act as taxes on imports—raising prices for everyday goods while reducing purchasing power.

• Failure to Address Structural Issues: The decline of U.S. manufacturing jobs is driven more by automation and globalization than foreign competition. Tariffs do nothing to address these underlying challenges.

By focusing on short-term political wins rather than long-term solutions, Trump’s policies exacerbate existing vulnerabilities instead of resolving them.

Conclusion: A Recipe for Disaster

In a healthy America with strong institutions and a resilient economy, Trump’s tariff policies would still be problematic—but manageable. In today’s fragile America—a nation burdened by debt, inequality, and systemic risks—they are catastrophic.The United States is like a house of cards built atop shaky ground—a nation vulnerable to collapse under its own weight. Trump’s tariffs are not just another card added to this precarious structure; they are a match struck beneath it.When this house falls—and history suggests it will—it will not be politicians or corporations who suffer most. It will be ordinary Americans: workers laid off from shuttered factories; families struggling with rising prices; communities fractured by economic despair.

America does not need more instability or division; it needs thoughtful policies that address systemic vulnerabilities while fostering resilience and growth. Unfortunately, Trump’s approach offers none of these things—only chaos disguised as strength.In introducing tariffs into this delicate system, Trump is not solving problems; he is lighting fuses beneath an already fragile economy—and when it collapses under its own weight, it will be ordinary people who pay the price.

Here are some links related to Trump's April actions.

Starting with Pepe Escobar at Zero Hedge, As he quotes Michael Hudson “The indispensable Michael Hudson has configured the key problem. Allow me a little tweak: “Sanctions and threats are the only thing that the United States has left. It no longer can offer other countries a win-win situation, and Trump has said that America has to be the net gainer in any international deal it’s made, whether it’s a financial deal or a trade deal. And if America is saying, any deal we make, you lose, I win”, that Mafia extortion gambit does not exactly reflect the Art of the Deal.

Prof. Hudson neatly describes Trump’s negotiation tactics: “When you don’t have very much to offer economically, all you can do is offer not to hurt other countries, not to sanction them, not to do something that will be against their interest.” Now, with TTT, Trump is actually “offering” to hurt them all. And they will certainly invest in all sorts of counter-tactics to “get away” from that “strategy” of American “diplomacy”.

https://www.zerohedge.com/geopolitical/escobar-how-trumps-tariff-tizzy-burning-down-house?fbclid=IwY2xjawJeC4hleHRuA2FlbQIxMQABHllKNfTCijfHoKmC5MFaP6rohcsdF-5fBieZDlmbMa6GNoIoSVMP7SgqL4om_aem_Nu4yzBXD9Xm6bdMWIbIqLw

https://apnews.com/article/trump-tariffs-economic-impact-trade-markets-3e38352ab5693852bfd9bc8dd2ac2d56?utm_source=perplexity

https://finance.yahoo.com/news/live/trump-tariffs-live-updates-china-retaliates-with-34-tariff-as-trump-digs-in-vows-to-never-change-policies-191201052.html?utm_source=perplexity&guccounter=1

https://www.cnn.com/2025/04/04/economy/recession-trump-tariffs-intl/index.html?utm_source=perplexity

https://www.commondreams.org/opinion/trump-s-tariffs-are-extremely-dumb-just-not-for-the-reasons-you-might-think?utm_source=perplexity

https://www.bbc.com/news/articles/cvgql020y5lo?utm_source=perplexity