The Tariff Reality Test
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To plainly state what is going on right now would make you sound delusional.
The president of the United States has essentially been holding the global financial system hostage. He’s done so by threatening massive tariffs on nearly 100 countries and territories, including one that is unpopulated. These tariffs, which were set to go into effect today but have now been put on a 90-day pause for every country except for China, which will see a 125 percent tax on exports, seem to have been calculated using a blanket formula that some economists and trade experts find almost nonsensical. (Many have speculated that the math was done by a chatbot.) The administration’s supporters do not have a coherent message about why any of this is happening; before President Donald Trump announced the pause, they’d argued simultaneously that the tariffs were a temporary negotiating tactic but also that they might be durable enough to bring manufacturing jobs back to the United States.
As the world braced for Trump’s tariffs to go into effect, stocks plummeted, wiping out trillions of dollars in value. The price of government bonds also dropped precipitously, triggering genuine fear of a dangerous debt crisis. Wall Street analysts likened the tariffs to a U.S. tax increase of roughly $660 billion; one economist called it a set of “punishing sanctions against the American people.” The situation is volatile: 10 percent universal tariffs are still in place, inflation remains a concern, America is still in a trade war with China, and it’s not at all clear that Trump will not just repeat this act as we approach the 90-day deadline.
For many, the second Trump administration has felt like a constant tearing of the fabric of our reality. The country is facing a deadly measles outbreak after Congress confirmed Robert F. Kennedy Jr., a man with a profound skepticism of modern medicine, to run the Department of Health and Human Services. For a time, the businessman Elon Musk seemed to be acting as a shadow president, and he’s participated in the gutting of the federal government (when he’s not streaming himself playing video games on social media). ICE has apprehended visa-holding students off the street—sometimes for no clear reason at all.
While many of these acts have been ignored or rationalized by the president’s supporters, the tariffs may be different. Can the culture war—largely powered by memes, ideologies, vibes, and extremely online radicalization—survive the harsh reality of a trade war? The pause is only temporary; if Trump does not relent, he might still cause a financial meltdown. Trump has also destroyed a lot of trust—just the possibility of future tariffs may cause enough uncertainty to hurt businesses and investors. This would be the ultimate stress test of people’s otherwise unshakable devotion to the president—a final gantlet for this MAGA delusion.
Tech leaders and venture capitalists who have cozied up to Trump were already harmed by the threat of tariffs. Their stock prices are down, and the broad duties planned by the administration will severely affect supply chains, making core products such as smartphones more expensive. (The 125 percent tax on Chinese exports that remains might still have this effect.) There’s genuine concern that the entire industry could be set back years as the uncertainty caused by Trump’s erratic decision making hinders the building of supercomputers as well as strategic investments by VCs. One analyst called it an “economic armageddon” for the industry.
[Read: Buy that new phone now]
Although none of the big technology companies have issued a public statement against the tariffs, some cracks have begun to show. Musk, an administration loyalist, has made personal appeals to Trump to reverse course and used his platform on X to repeatedly insult Peter Navarro, one of the architects of the tariffs, calling him “dumber than a sack of bricks” and giving him the nickname “Peter Retarrdo.” A few other pro-Trump investors and entrepreneurs have issued their own frustrations: The Palantir co-founder Joe Lonsdale tepidly critiqued the rollout, suggesting that “the tariffs could be done better.” Others have indicated that they were misled by enthusiasm for Trump’s culture warring.
Bill Ackman, the billionaire hedge-fund manager and ardent Trump supporter, might have offered the best example of buyer’s remorse on Sunday, when he posted on X that the tariffs were the equivalent of an “economic nuclear war.” He posited that the United States “will severely damage our reputation with the rest of the world that will take years and potentially decades to rehabilitate.” Later, he admitted that he’d underestimated Trump’s penchant for chaos. “I don’t think this was foreseeable,” he posted, referring to the tariffs Trump touted throughout his campaign. “I assumed economic rationality would be paramount. My bad.” The contrition didn’t last: After the pause was announced, Ackman posted on X, “This was brilliantly executed by @realDonaldTrump. Textbook, Art of the Deal.” As of this writing, there is no evidence from the White House that Trump received any specific concessions from the tariffed nations; he merely created a crisis and then paused it because the world (and markets) got spooked. “People were getting a little bit yippy,” Trump told reporters this afternoon.
[Jonathan Chait: Trumpworld makes the case against Trump]
Just as notable are the justifications from the far-right influencers who have served as a de facto propaganda arm for the White House. As markets tanked last week, they swiftly argued in favor of broad austerity measures as a necessary hardship, suggesting that Americans do “not need” consumer electronics such as cellphones and video-game consoles and that American lives have not been changed by the tariffs. Benny Johnson, a Trump loyalist, social-media personality, and podcast host, went further: “Losing money costs you nothing,” he said on his podcast. “In fact, you learn a lot of lessons actually by losing money. Losing your character costs you everything. Losing your country loses you everything.” Other MAGA devotees and some Fox News hosts have conscripted tariffs into the culture wars, justifying them as helping to fix the country’s “crisis in masculinity.”
It’s not just the shock jocks. On X, entrepreneurs, venture capitalists, and a faction best described as an anti-woke tech commentariat posted long threads, proclaiming the tariffs a Trumpian masterstroke. Chamath Palihapitiya, a venture capitalist and one of the hosts of the All-In podcast, recently hypothesized that Trump would bring world leaders to Mar-a-Lago to remake the world economy in what Palihapitiya referred to as “Bretton Woods 2.0.” Keith Rabois, a well-known tech investor, declared that “Trump Derangement Syndrome has morphed into Tariff Derangement Syndrome,” suggesting that the slew of economists and trade experts horrified by the administration’s proposal are all wrong. “I would believe in any macro trader w sustained returns for decades over any academic,” he wrote.
This combination of blind faith, reactionary ideology, and endless justification have less in common with any kind of politics and policy than they do with genuine conspiratorial thinking—a kind of QAnon 2.0 for finance. As in QAnon, a sprawling network of conspiracy theories about a nefarious cabal referred to as the “deep state,” Trump is made out to be a hero, pulling the strings and playing multidimensional chess to deliver political salvation to his devotees. QAnon’s earliest prediction, back in 2017, revolved around Trump “removing criminal rogue elements,” including arresting Hillary Clinton. But the broader goal was a dismantling of the New World Order. The arrests never came, but the elaborate predictions continued. QAnon became a cult in which followers were given “crumbs” and told to “trust the plan.” The group’s slogan was an admission of total surrender to the conspiracy: “Where we go one, we go all.”
It’s not a perfect one-to-one comparison, but many of the dynamics are quite similar. Both QAnon and the legion of tariff true believers share an unabiding faith in Trump, ascribing his erratic governing style to a master plan. As my colleague Adrienne LaFrance wrote in 2020, in QAnon, “every contradiction can be explained away; no form of argument can prevail against it.” Similarly, ardent supporters of Trump’s tariffs have refused to see any of the plan’s glaring flaws: Fluctuations in the stock market are dismissed as not real or, in some cases, a good thing, because they hurt the “bastards” on Wall Street. Either the sell-off is part of a necessary cleansing of the American economy or it’s a blip, the result of Trump playing chicken with world leaders. In some cases, supporters argue that the stock market has almost nothing to do with the long-term health of the economy at all. To these people, the notions that the tariffs will hurt the working-class families they’re supposed to liberate and that they could halt the domestic manufacturing they’re supposed to energize are distractions seeded by an enemy who doesn’t want you to see the end game.
But above all, the prime directive for both QAnon and the tariff truthers is the same: Trust the process. The tech investor and Trump supporter Shaun Maguire wrote on X last week that the tariffs are better than maintaining the status quo: “Stay the course and have a 100% chance you lose in 20 years…Or do the hard things and have a 70% chance you win.” These numbers, it’s worth noting, appear to be random, but they represent a kind of unflinching devotion to a plan that doesn’t seem to exist. Trump, taking a page from Q’s book, issued his own version of this message on Monday, telling supporters on social media, “Don’t be Weak! Don’t be Stupid! Don’t be a PANICAN (A new party based on Weak and Stupid people!).” In response, Fox News ran a lower-third banner with the phrase Good Things Come To Those Who Wait. On X, far-right influencers began using Trump’s term—Panican—as a way to dismiss earnest criticism and concerns about the tariffs. Just as QAnon offered promises of a Great Awakening, in which the deep state was vanquished and the truth of the evils of the global elite cabal was revealed, the tariffs also offer the promise of an imagined utopia. The far-right activist Jack Posobiec summed up the attitude best on X on Monday: “My own retirement account is down too … Don’t care … All-in on the Great Deal … The Golden Age is on the other side.”
The TariffAnon crowd is right about one thing: Even the near future is deeply uncertain. As I wrote these words, the market rallied (the Panicans were fools all along!), only to lose all gains a few hours later (the Panicans are making too big a deal out of market fluctuations). After announcing his pause, Trump confusingly also said that the U.S. would apply additional 10 percent tariffs to Canada and Mexico. It remains possible that Trump could successfully negotiate a bunch of trade deals, placating the markets and further cementing him as a hero among his base. Or it could all go disastrously.
Some political observers hope that Trump single-handedly inflicting deep financial pain on the world might break the spell among his most ardent supporters. In this way, the tariffs are a reality test. But if the recent past is any guide, what many dismiss as bad-faith rhetoric can quickly harden into a core ideology for a set of true believers; the anti-vax movement and the subsequent measles outbreaks are a sobering analog. This is how breaks with reality occur now, aided, in part, by the internet’s justification machine, which is an efficient mechanism for dispelling any trace of cognitive dissonance. In some cases, falling down the conspiratorial rabbit hole is motivated by grievance—my enemies hate this, therefore it must be good. And any market bounce-back after Trump’s announcement of a 90-day pause will be taken by true believers as evidence of the president’s genius (see: Bill Ackman).
Some Trump supporters are also worried about their reputations. For many outspoken VCs, backing Trump was a bet, much like investing in a portfolio company—one that came with substantial risk. Should Trump’s tariff scheme backfire completely by causing a recession or worse, their reputations as risk managers and complex-systems thinkers would naturally be tarnished (see: Bill Ackman). Unless, of course, they chose to double down and create a fictional narrative in which they cannot be wrong. The truthers are, in essence, talking up their reputational investment —as if the Trump administration was a stock they were holding. As Trump himself has proved throughout his political career, it is often easier to double down and build a fantasy world around your mistake than to admit you were wrong.
That sufficiently motivated people might break with reality is by now somewhat predictable in American politics. But what’s far more uncertain is what happens when reality punctures the protective bubble of cognitive dissonance. QAnon devotees and MAGA die-hards were certain that Trump won the 2020 presidential election. When reality became impossible to ignore, we got January 6. Few events have the power to pierce the veil, but a global financial crisis could be one of them. What happens if the true believers are confronted with a truth they can’t look away from? History suggests it won’t go well.
