Trump’s Tariffs Are Part of a ‘Tectonic Plate Shift’ in the Global Economy

Here is how the last week or so went: President Donald Trump unveiled a half-baked package of gigantic tariffs — so half-baked that one of them was a tariff on a group of islands inhabited mainly by penguins — which threw the markets into chaos.

But the chaos was not simply the result of higher expected prices and supply chain disruptions. What markets hate is uncertainty. Financial crises are usually the result of some unexpected, uncontrollable shock that overwhelms the policymakers who are trying to maintain stability.

In this case, Trump was the shock. He was announcing that he was, himself, trying to end this era of stability. He wanted a realignment of the global financial system, and you can’t shift tectonic plates without creating a few earthquakes.