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      Colbert on Trump administration’s ethos: ‘Take full responsibility and dump it on somebody else’

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      Late-night hosts dug into the chaos at Newark airport leading to a cascade of cancellations, Donald Trump’s alleged Hollywood tariffs and the visit of the Canadian prime minister, Mark Carney, to the White House.Stephen ColbertOn Tuesday’s Late Show, Stephen Colbert looked into the cascade of delays at Newark airport this week, causing the cancellation of hundreds of flights. The culprit was a terrifying 90-second blackout during which air traffic controllers temporarily lost radar and communications with the aircraft under their control, making them unable to see, hear or talk to them. “Those are three fairly important things,” Colbert deadpanned.The blackout was caused by a fried piece of copper wire. “Unlike the other blackouts at Newark, which are caused by the grand coconut margarita at terminal A Chili’s Too,” Colbert joked.In response to the crisis, Trump’s transportation secretary, Sean Duffy, went on Fox News to, as Colbert put it, “take full responsibility and dump it on somebody else”.Duffy criticized old infrastructure in the US that hasn’t been updated in “30 or 40 years”, but said “this should’ve been dealt with in the last administration. They did nothing.”“Yes, this problem has been going on for years,” Colbert agreed. “Biden should’ve done something about it. Or really, the guy before him should’ve done something about it.”In truth, Biden did do something about it; in the 2021 infrastructure bill, he approved $25bn to improve airports. The upgrades began, but were partially derailed by Trump’s “department of government efficiency” (Doge) laying off more than 400 staffers at the Federal Aviation Administration shortly after taking office, including maintenance mechanics and employees who work on electrical issues. “Those are the people who do the stuff!” Colbert exclaimed. “There are plenty of useless people you could’ve fired, like the TSA agent who says you can’t bring in a snow globe. I hate having to chug my snow globe right before security.”Duffy claimed that he was going to spend the money on a new system, but warned that it would take three to four years. “Not exactly what you want to hear in a crisis,” Colbert noted.And it’s a crisis that probably won’t get better soon, as many air traffic controllers are now out on a 45-day trauma leave following the blackout. “Wait a second, there’s such a thing as trauma leave?” Colbert wondered. “Bye! I’m off to the tropics.”Jimmy KimmelIn Los Angeles, Jimmy Kimmel recapped the visit of the new Canadian prime minister, Mark Carney, to the White House, where Donald Trump insisted that “regardless of anything, we’re going to be friends with Canada”.“Poor Mark Carney had a helluva job today,” said Kimmel, noting that Trump keeps referring to Canada as the “51st state”. “It was like an Ewok going to a meeting on the Death Star.”But Carney “handled it well”, according to Kimmel. “In a friendly way, he made sure Trump knows they have no intention of becoming our 51st state.” Carney diplomatically told Trump that Canada is “not for sale, won’t be for sale”, to which Trump interjected: “But never say never!”“He doesn’t take no for an answer – in fact, he was found liable for it in a court of law,” Kimmel said, referring to a May 2023 verdict in which a New York court found Trump liable for sexual abuse and defamation of the writer E Jean Carroll, and ordered him to pay $5m.Kimmel also addressed Trump’s threat to (somehow) slap a 100% tariff on any movie made outside the US, “which caused every studio executive in Hollywood to double up on their Ativan yesterday,” he quipped. “No one seems to know what’s going on with these tariffs, including our own secretary of the treasury.“Remember how everyone said the main requirement to get a spot in his cabinet was to be good on TV? Well, here is our treasury secretary, Scott Bessent,” Kimmel continued before a clip of Bessent struggling to answer the basic question “who pays tariffs?” before Congress.“Try unplugging him and plugging him back in,” Kimmel laughed. “Scott Bessent has the demeanor of a headmaster at an all-boys school that’s under investigation.”Seth MeyersAnd on Late Night, Seth Meyers opened with Trump’s Truth Social post on Monday in which he claimed that he would order the government to reclaim and reopen the infamous Alcatraz prison. “I love that you can tell from his social media post what movie he watched on the plane,” said Meyers, referring to Clint Eastwood’s 1979 film Escape from Alcatraz, which played on public television in Florida while he was at Mar-a-Lago.Trump also joked with reporters about the possibility of becoming pope and said: “I would not be able to be married, though.”“And it looks like Melania has voted,” Meyers quipped next to a photo of white smoke.The Vatican’s conclave to elect a new pope is set to begin on Wednesday. “So just remember, black smoke means no decision, white smoke means a new pope and pink smoke means it’s a girl!” Meyers joked.The Late Night host also touched on reports that the US army is planning a parade to honor its 250th anniversary as well as Trump’s 79th birthday, including military vehicles, aircraft and nearly 7,000 soldiers. “And to honor Trump’s military service, he won’t be there,” Meyers quipped. 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      Why Donald Trump’s plan to weaken the dollar is flawed | Kenneth Rogoff

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      Now that US President Donald Trump’s tariff war is in full swing, investors around the world are asking: what’s next on his agenda for upending the global economic order? Many are turning their attention to the “Mar-a-Lago Accord” – a plan proposed by Stephen Miran, chair of Trump’s Council of Economic Advisers, to coordinate with America’s trading partners to weaken the dollar.At the heart of the plan is the notion that the dollar’s status as the world’s reserve currency is not a privilege but a costly burden that has played a major role in the deindustrialisation of the American economy. The global demand for dollars, the argument goes, drives up its value, making US-made goods more expensive than imports. That, in turn, leads to persistent trade deficits and incentivises US manufacturers to move production overseas, taking jobs with them.Is there any truth to this narrative? The answer is yes and no. It’s certainly plausible that foreign investors eager to hold US stocks, bonds, and real estate could generate a steady flow of capital into the United States, fuelling domestic consumption and boosting demand for tradable goods such as cars and non-tradables such as real estate and restaurants. Higher demand for non-tradable goods, in particular, tends to push up the dollar’s value, making imports more attractive to American consumers, just as Miran suggests.But this logic also overlooks crucial details. While the dollar’s reserve-currency status drives up demand for Treasuries (Treasury bills, Treasury bonds, and Treasury notes), it does not necessarily increase demand for all US assets. Asian central banks, for example, hold trillions of dollars in Treasury bills, to help stabilise their exchange rates and maintain a financial buffer in the event of a crisis. They generally avoid other types of US assets, such as equities and real estate, since these do not serve the same policy objectives.This means that if foreign countries simply need to accumulate Treasury bills, they don’t have to run trade surpluses to obtain them. The necessary funds can also be raised by selling existing foreign assets such as stocks, real estate, and factories.That is precisely what happened in the 1960s through the mid-1970s. By then, the dollar had firmly established itself as the global reserve currency, yet the US was almost always running a current account surplus – not a deficit. Foreign investors were accumulating US Treasuries, while American firms expanded abroad by acquiring foreign production facilities, either through direct purchases or “greenfield” investments, in which they built factories from the ground up.The postwar era was hardly the only time when the country issuing the world’s reserve currency ran a current account surplus. The British pound was the undisputed global reserve currency from the end of the Napoleonic wars in the early 1800s until the outbreak of the first world war in 1914. Throughout that period, the UK generally ran external surpluses, bolstered by high returns on investments across its colonial empire.There is another way to interpret the US current account deficit that helps explain why the relationship between the exchange rate and trade imbalances is more complicated than Miran’s theory suggests. In accounting terms, a country’s current account surplus equals the difference between national savings and investment by the government and the private sector. Importantly, “investment” here refers to physical assets such as factories, housing, infrastructure, and equipment – not financial instruments.When viewed through this lens, it is clear that the current account deficit is influenced not just by the exchange rate but by anything that affects the balance between national saving and investment. In 2024, the US fiscal deficit was 6.4% of GDP, significantly larger than the current account deficit, which was under 4% of GDP.While closing the fiscal deficit would not automatically eliminate the current account deficit – that would depend on how the gap is closed and how the private sector responds – it is a far more straightforward fix than launching a trade war. Reducing the fiscal deficit would, however, involve the difficult political task of convincing Congress to pass more responsible tax and spending bills. And unlike a high-profile trade confrontation, it wouldn’t cause foreign leaders to curry favour with Trump; instead, it would shift media attention back to domestic politics and congressional negotiations.Another key factor behind the current account deficit is the strength of the American economy, which has been by far the most dynamic among the world’s major players in recent years. This has made US businesses particularly attractive to investors. Even manufacturing has grown as a share of GDP. The reason employment has not kept pace is that modern factories are highly automated.skip past newsletter promotionafter newsletter promotionMiran’s plan, clever as it might be, is based on a flawed diagnosis. While the dollar’s role as the world’s leading reserve currency plays a part, it is just one of many factors contributing to America’s persistent trade deficits. And if the trade deficit has many causes, the idea that tariffs can be a cure-all is dubious at best. Kenneth Rogoff is professor of economics and public policy at Harvard University. He was the IMF’s chief economist from 2001-03.© Project Syndicate More

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      Mike Pence rebukes Trump over tariffs and ‘wavering’ support for Ukraine

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      Donald Trump’s tariffs policy will trigger a “price shock” and possible shortages, and lead to public pressure on him to change his approach, the former vice-president Mike Pence has said.In one of his most wide-ranging critiques yet on the policies of the president he used to serve, Pence, speaking to CNN, derided the White House’s “wavering” support for Ukraine and declared – in direct contradiction of repeated assurances from Trump – that President Vladimir Putin of Russia “doesn’t want peace”.Pence’s comments came in an interview after receiving the John F Kennedy Profile in Courage award in recognition of his refusal to bow to pressure from Trump to overturn the 2020 presidential election when he presided over Congress’s certification of the results on 6 January 2021.The vice president’s determination to carry out his constitutional role and certify Joe Biden’s victory presaged an attack on the US Capitol by a violent mob, who chanted “hang Mike Pence”, as the vice-president was spirited to safety by security personnel.Pence told CNN’s Kaitlan Collins that Trump’s decision to pardon about 1,600 convicted rioters after he returned to office in January “sent the wrong message”.“I was deeply disappointed to see President Trump pardon people that engaged in violence against law enforcement officers that day,” he said.Addressing tariffs – which Trump has made a signature policy of his second presidency while implementing a 90-day pause on exports from most countries after international markets plunged – Pence said they were “not a win for the American people” and warned that their worst effects had yet to be seen.“I do have concerns that, with the president’s call for broad-based tariffs against friend and foe alike, that ultimately the administration is advancing policies that are not targeted at countries that have been abusing our trade relationship, but rather are essentially new industrial policy that will result in inflation, that will harm consumers and that will ultimately harm the American economy,” he said.“Even the administration has conceded that there may be a price shock in the economy, and there may be shortages” after the current pause expires, Pence said.He said the White House was in danger of stoking a political backlash, citing Trump’s recent comment that tariffs might result in American children having two dolls instead of 30 and that “maybe the dolls will cost a couple of bucks more”.“Keeping our kids’ toys affordable: that really is part of the American dream,” he said.“I think the American people are going to see the consequences of this. I think they’ll demand a different approach.”He criticized the administration for threatening to abandon support for Ukraine, whose president, Volodymyr Zelenskyy, Trump has publicly blamed for Russia’s invasion, while repeatedly praising Putin – relenting only recently after the Russian leader rebuffed peace offers and instead ordered missile attacks on Kyiv.Pence said: “If the last three years teaches us anything, it’s that Vladimir Putin doesn’t want peace; he wants Ukraine. And the fact that we are now nearly two months of following a ceasefire agreement that Ukraine has agreed to and Russia continues to delay and give excuses confirms that point.“The wavering support the administration has shown over the last few months, I believe, has only emboldened Russia.”He was equally scathing about Trump’s stance towards Canada, which he had hit with trade tariffs and said he would like to annex as the 51st US state.Pence, by contrast, called Canada “a great ally, whose soldiers have fought and died alongside Americans in every war since world war one”. More

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      Trump says Biden caused the economic downturn. That’s malarkey | Steven Greenhouse

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      While Donald Trump delusionally asserts that “we’re celebrating the most successful first 100 days of any administration in American history”, last week’s economic news emphatically refutes that. Trump’s commerce department reported on Wednesday that the US economy – in a sharp and dismaying reversal – shrank in the first quarter of this year.That of course is when Trump returned to the White House, but Trump, true to form, denied that he was in any way responsible for the surprisingly bad economic news. Trump, who has spent his life blaming others and refusing to admit mistakes, was quick to blame Joe Biden for the downturn. The nation’s gross domestic product declined at a 0.3% annual rate in the quarter, after adjusting for inflation.At Wednesday’s cabinet meeting – where cabinet secretaries sounded like North Korean officials obsequiously extolling Kim Jong-un – Trump noted the bad first-quarter report and said: “This is Biden, and you can even say the next quarter is sort of Biden.” Later in the day in a speech to corporate executives, Trump continued to try to dodge responsibility, saying: “This is Biden’s economy.”Even the very careful New York Times said that Trump was full of it. The Times wrote that Trump “blamed his predecessor for handing him a bad economy, despite data showing that growth was strong when he took office”.When Biden left office, many economists had glowing words about the economy. “President Trump is inheriting an economy that is about as good as it ever gets,” said Mark Zandi, chief economist at Moody’s Analytics. “The US economy is the envy of the rest of the world, as it is the only significant economy that is growing more quickly post-pandemic than pre-pandemic.”With regard to the bad first-quarter GDP report, economists overwhelmingly agree that there was one overriding cause, and that cause was not Joe Biden. Rather, it was the huge uncertainty and fears stirred by the prospect of Trump’s tariffs. Eager to stock up on foreign goods before Trump imposed his wave of tariffs, US businesses rushed to increase their imports, and according to the formula used to calculate GDP, soaring imports have a downward effect on economic growth.Like the boy who would never admit he broke the cookie jar, Trump refused to admit that his tariffs had anything to do with the first-quarter downturn. For Trump, truth is a distant galaxy. It’s a foreign enemy that he is forever trying to repel. He stubbornly refuses to admit that the economy was in strong shape when he took office, just as he shamelessly refuses to admit that “MS-13” was Photoshopped on to the knuckles of Kilmar Ábrego García, an immigrant who was wrongly deported to a brutal prison in El Salvador. Far too often, Trump seems allergic to the truth. During an interview with Terry Moran of ABC News, he brazenly insisted that Moran accept Trump’s falsehood about Ábrego García, telling him: “Why don’t you just say: ‘Yes, he does’” have MS-13 tattooed on his knuckles.It’s as delusional for Trump to claim that “we inherited from the last administration an economic catastrophe”, as he did in a speech to a joint session of Congress in March, as it is for him to insist that Ábrego García’s knuckles say “MS-13”.When Biden left office, no economists were forecasting a recession anytime soon – that’s why Wednesday’s report that the economy shrank in the first quarter was such a surprising reversal. During last year’s fourth quarter, Biden’s last full quarter in office, the nation’s GDP grew at a solid 2.4% rate. Indeed, ever since the Covid-19 pandemic ended, economic growth in the US was considerably stronger than in Britain, Germany, France, Japan and other G7 nations. Several weeks before election day, the Economist magazine ran headlines saying the US economy was “the envy of the world” and had “left other rich countries in the dust”.When Biden’s term ended, the jobless rate was a low 4.0%. Not only that, during Biden’s four years, the average unemployment rate was lower than for any president since the 1960s. Trump won over many voters by attacking high inflation under Biden – and it was a serious problem – but by the time Biden left office, inflation had slid to just 2.9%, far below its 9% peak in 2022 and nearly down to the Federal Reserve’s inflation goal.As part of his economic disinformation efforts, Trump has repeatedly said that job growth was a disaster under Biden. Sorry, Donald, that’s a lie. The fact is that during Biden’s four years, the US added 16.6 million jobs, more than during any four-year term of any previous president. (Trump will never tell you this, but during his first term, the nation lost 2.7 million jobs overall, making his first-term presidency the first presidency since Herbert Hoover’s to suffer an overall loss in jobs. The pandemic was largely responsible for that.)As part of his never-ending effort to dodge responsibility, Trump blamed Biden for the stock market’s recent troubles. During Trump’s first 100 days, the S&P 500 fell 7%, making it the market’s worst beginning to a presidential term since Gerald Ford took office in 1974 after Richard Nixon resigned due to the Watergate scandal.Devious as ever, Trump posted on Truth Social on Wednesday: “This is Biden’s Stock Market, not Trump’s. I didn’t take over until January 20th.” What Trump failed to say was that the stock market didn’t begin to plunge until 2 April, when he announced his steep, worldwide “liberation day” tariffs. That was more than two months after Biden left office – so it’s absurd for Trump to blame him for that decline. And don’t expect Trump to ever acknowledge that Wall Street soared during Biden’s four years. The Dow Jones Industrial Average climbed 39% and the S&P 500 soared by 55.7%, including a 28% jump during 2024.Jared Bernstein, who was chair of the council of economic advisers under Biden, said on MSNBC on Thursday that it was ludicrous for Trump to blame Biden for the first-quarter downturn. “I have never seen a more direct connection to what we’re seeing in the economy and stock market to the action of one person, which is to President Trump and his trade war,” Bernstein said.Many economists warn that the US economy may sink further in the second quarter due to Trump’s tariffs as some supply chains break down, some imports dry up, prices rise on many goods and many consumers and business pull back on spending due to all the uncertainty and anxiety.John Kasich, a Republican and former governor of Ohio, sneered at Trump’s efforts to weasel out of responsibility. “You can’t blame Biden,” he said. “It’s like saying the dog ate my homework.”

      Steven Greenhouse is a journalist and author focusing on labor and the workplace, as well as economic and legal issues More

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      Trump’s tariffs get one thing right: capitalism is changing | Avram C Alpert

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      Trying to understand Donald Trump’s across-the-board tariffs based solely on economic theory won’t work. As the US president himself said: “Chronic trade deficits are no longer merely an economic problem, they’re a national emergency that threatens our security and our very way of life.” That may be why, as many economists have pointed out, there’s simply no good economic case for his plans.But few commentators have understood that facts and figures aren’t the whole point of the tariffs. As always, economics is part of a broader political vision. The tariffs help Trump make his claim that a way of life is under threat and he alone can protect it.Indeed, the political meaning of Trump’s tariffs is in the idea itself: “protectionism”. He is not just telling people that he’s going to improve the economy. He’s signaling that he’s going to protect a way of life, even – or especially – if it hurts others, by creating, in theory, good-paying factory jobs that could sustain local communities. (Never mind that the key to any industry’s ability to sustain communities are the practices of labor organizing Trump opposes.) On the campaign trail, he said: “Whether the women like it or not, I’m going to protect them.” He’s now saying the same thing to the country as a whole.Such non-economic justifications for economic policy are nothing new. They are part of what the sociologist Max Weber called “the spirit of capitalism”. Weber argued that capitalists had to justify a claim unique in human history: profit is good. For millennia before, philosophers had argued the opposite. Jesus, for example, told his disciples that it was likelier for a camel to go through the eye of a needle than for a rich man to get into heaven.But with capitalism, the pursuit of profit became good. How did it justify this? Weber said that’s where “spirit” comes in. He pointed to notions of work as a holy value in Protestantism and Calvinist ideas about how monetary success proved you were among God’s chosen few. These spiritual views engendered a work ethic and made capitalist excess palatable. At least for a time.When capitalist greed becomes unpalatable, new spirits emerge. To understand Trump’s protectionist spirit, we have to understand this preceding history.After the Great Depression, people saw that they might lose everything no matter how hard they worked and so the work ethic spirit lost its power. In its place, social democratic states gave a new collectivist spirit to capitalism. Social democracy limited excess and provided a moral logic by offering stability to all through a linked system of jobs and life-long public services.This collectivist spirit began to break down in the 1960s under the pressures of stagflation, oil shocks, and criticisms of a conformist, consumerist lifestyle. In response, capitalism’s spirit transformed itself again. According to two scholars of this transitional period, Luc Boltanski and Ève Chiapello, it did so by ingeniously incorporating the criticisms: it became about nomads, connections, flexibility, creativity.It was no longer the staid cubicle office man; it was now the exciting creative entrepreneur who knows no allegiances and is at home in the chaos of disruption. Hence Silicon Valley. Hence the destroyed manufacturing bases where jobs were converted to low-wage poverty traps and where Trump now finds many of his most loyal supporters. Hence his protectionist vision of a new spirit of capitalism.There is some merit in this desire to help those who lost out, but, as Weber noted, the spirits of capitalism can mask more sinister desires. By also pushing massive tax breaks for the wealthy, Trump is hoping that tariffs can provide rhetorical appeal without radically changing the social order.The tariffs say: we will protect your community by hurting those who profited off your pain and became rich through globalization. That’s why Trump blamed “globalists” for the dip in the stock market after the tariffs were announced: “A lot of [those selling stocks] are globalist countries and companies that won’t be doing as well … Because we’re taking back things that have been taken from us many years ago.” But that ignores the real ways in which jobs have been lost and communities upended. What the tariffs leave unsaid is that they won’t address the real issues underlying today’s economic pain: gutting welfare, failing to retrain workers, under-utilizing technology, and letting inequality rise relentlessly.Trump is right that capitalism, in a period of untrammeled greed and injustice, needs a new spirit to show it the way. But the trouble with a protectivist spirit is that it implies that some get protected while others get hurt. That will just create new cycles of dismay – as we are already seeing with the tariff whiplash and draconian immigration policies.What we need is a democratizing spirit, one that isn’t about protecting some and hurting others, but instead guides us to work collectively to ensure that all people can lead decent and meaningful lives even in a chaotic world. There are economic policies for this, such as fair trade, meaningful industrial policy, more worker representation on corporate boards, and more cooperatively owned businesses.But Democrats also need to learn from Trump and emphasize the spirit. They need to show that their democratic vision is not just technocratic, but as powerful and affirming as the feeling of being protected.The desire for this spirit may be why the rallies of Bernie Sanders and Alexandria Ocasio-Cortez have drawn record crowds. Most attenders say they aren’t there to hear the policies, which they already know. They’re there for the “community”, and to experience the “closest thing to a version of America you actually want to live in”, one that works for all of us. If the Democratic party can catch that spirit, they will not only win elections; they might just bring an end to decades of destruction.

      Avram Alpert is a lecturer in the Princeton Writing Program. His most recent book is The Good-Enough Life More

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      Trump announces 100% tariffs on movies ‘produced in foreign lands’

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      Donald Trump on Sunday announced on his Truth Social platform a 100% tariff on all movies “produced in Foreign Lands”, saying the US film industry was dying a “very fast death” due to the incentives that other countries were offering to draw American film-makers.In his post, he claimed to have authorised the commerce department and the US trade representative to immediately begin instituting such a tariff.“This is a concerted effort by other Nations and, therefore, a National Security threat,” Trump said in the Truth Social post. “It is, in addition to everything else, messaging and propaganda!”“WE WANT MOVIES MADE IN AMERICA, AGAIN!” Trump added.Commerce secretary Howard Lutnick posting on X said: “We’re on it.” Neither Lutnick nor Trump provided any details on the implementation. It was not immediately clear whether the move would target production companies, foreign or American, producing films overseas.Film and television production in Los Angeles has fallen by nearly 40% over the last decade, according to FilmLA, a non-profit that tracks the region’s production. At the same time, governments around the world have offered more generous tax credits and cash rebates to lure productions, and capture a greater share of the $248bn that Ampere Analysis predicts will be spent globally in 2025 to produce content.Politicians in Australia and New Zealand said on Monday they would advocate for their respective film industries, after the president’s announcement.Australia’s home affairs minister Tony Burke said he had spoken to the head of the government body Screen Australia about the proposed tariffs. “Nobody should be under any doubt that we will be standing up unequivocally for the rights of the Australian screen industry,” he said in a statement.New Zealand prime minister Christopher Luxon told a news conference the government was awaiting further detail of the proposed tariffs. “We’ll have to see the detail of what actually ultimately emerges. But we’ll be obviously a great advocate, great champion of that sector in that industry,” he said.The announcement from Trump comes after he triggered a trade war with China, and imposed global tariffs which have roiled markets and led to fears of a US recession. The film industry has already been feeling the effects of the tariffs, as China in April responded to the announcements by reducing the quota of American movies allowed into that country.China is the world’s second largest film market after the US, although in recent years domestic offerings have outshone Hollywood imports.Former senior commerce department official William Reinsch, a senior fellow with the Center for Strategic and International Studies, said retaliation against Trump’s foreign movies tariffs would be devastating.“The retaliation will kill our industry. We have a lot more to lose than to gain,” he said, adding that it would be difficult to make a national security or national emergency case for movies. More

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      Donald Trump’s cartoon-like chaos leaves US economy on unstable course | Heather Stewart

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      Ten days reporting from the US – in Pittsburgh, Washington DC, and just across the Potomac River in Arlington, Virginia – gave me a fascinating snapshot of what feels like the slow-motion unravelling of the world’s largest economy.So many conversations featured uncertainty and wariness; and weariness, too, as businesses and consumers weigh up every decision, against the backdrop of the chaos emanating from the White House.Even the president conceded last week that the economy was in a “transition period”, claiming he had warned of this during his campaign. (When challenged, the White House could not come up with any examples of when he had done so.)The problem for Trump and his supporters, many of whom remain staunchly loyal, is that the transition period in question is starting to resemble that felt by the classic Looney Tunes character Wile E Coyote between charging off a cliff into midair and plunging to the ground.So far, the hard data from the US economy is holding up well. Friday’s payrolls report was strong, and the negative first quarter gross domestic product reading, while worrying, was hard to take a clear reading from because of the rise in imports as companies stocked up ahead of tariffs.There is little sign of anything as dramatic as mass job cuts, or a sudden stop in consumer spending – although the recent crop of data mainly relates to the period before “liberation day”.Look at the forward-looking surveys, though, and there are clear signs of anxiety. The long-running Michigan consumer sentiment index just had its steepest quarterly decline since the 1990 recession.Spend any amount of time talking to US consumers and businesses, and it is abundantly clear why: there are so many sources of policy ambiguity as to make the future not just uncertain but completely unknowable.There is a cliche that “markets hate uncertainty”, but in truth the same applies to everyone in the real economy, too: the company wondering what size order to put in and how many people to hire and the family thinking about buying that fridge or booking that holiday.It is not surprising they are uncertain. No one, even inside the administration, can say with any confidence what the tariff rates on imports from specific countries will be in July.Even if the tariff policy was crystal clear, its impact on prices would be hard to gauge – depending, as it does, on how much of the cost companies are willing to bear (or “eat”, as the Americans have it) at the expense of reduced profits, and how much is passed on to consumers.For the moment, as the Treasury secretary, Scott Bessent, has admitted, the tariffs on China, at 145%, are now so high as to amount to an effective trade embargo.Not every company will have the deep pockets and global reach of Apple to be able to bend its supply chain away from China to manufacture products for the US elsewhere (in the iPhone-maker’s case, India). Instead, many will be scrambling to find substitutes, which may be more expensive or not exist at all. Shortages of some products seem a distinct possibility.At the same time, sharp cuts in federal budgets, many of which have an ideological taint, including Robert F Kennedy Jr’s decimation of the National Institutes of Health, are raising short-term questions about unemployment and much longer-term worries about the US’s world-leading science base.Some of the most heartbreaking conversations I had were about aspects of Trump’s immigration policy: the man who said a Guatemalan friend’s six-year-old son had stopped going to school in case his mum was snatched by the authorities while he was there, and the restaurant manager who said it was becoming harder to hire Latinos because even fully documented workers feared they could face deportation anyway.skip past newsletter promotionafter newsletter promotionThese are first and foremost human tragedies, but clearly they also have an economic dimension. The credit rating agency Fitch warned in a report last week: “Risks associated with mass deportations could include potential worker shortages, production delays and increased wage inflation that hinders revenue growth, weakens profitability and lowers return on investment.”Of course, because the US economy’s abrupt gearshift has been driven by deliberate policy actions, it’s tempting to think: “It doesn’t have to be like this.”Much more of the real economy impact so far results from this widely shared uncertainty – or perhaps it is better to call it fear – than from the specifics of Trump’s policies.Business owners told me that if they just knew what the final tariffs on products from the various countries in their supply chain would be, for example, then over time they could adapt.It is not completely out of the question that a more settled policy position could arrive in the coming weeks.Certainly, Bessent appears to be trying to manoeuvre Trump towards striking a series of “deals” (in effect, promises of concessions in exchange for tariff carve-outs) with key economies.Yet the president appears to have such a love of political drama – and such an inability to choose a course and stick to it – that the unknowability of future policy seems to be the very essence of Trump 2.0.It seemed to be the mighty bond markets, driving up the cost of US borrowing, that checked Trump’s initial “liberation day” drive, prompting the “pause”.But if time drags on with no agreements in sight, the next wave of distress signals are likely to come not from Wall Street but from main street – in soaring prices and empty shelves. How Trump responds then is anyone’s guess. More