As his tariffs sank the market, Trump was nowhere to be seen

Washington: Donald Trump had decisions to make about whether to grant Australia – and other allies such as Japan – an exemption to 25 per cent tariffs on steel and aluminium imports, due to begin on Wednesday.

But now, in the face of financial market turmoil and a simmering backlash among some Republicans and business leaders, the US president has a bigger issue on his hands: whether to proceed with the tariffs at all.

US President Donald Trump leaves Air Force One on his return to Washington from Florida on Sunday (US time).Credit: AP

We’ve already seen that Trump’s bark is worse than his bite when it comes to tariffs, at least when it concerns allies. Planned tariffs on Mexico and Canada were paused for a month, then implemented for less than a day, then modified to exclude goods covered by their tripartite free-trade agreement – at least for another month.

At first, it was only Mexico that was offered the reprieve; hours later, Canada joined the party. The process has been chaotic and utterly Trumpian.

Markets have not been impressed with the uncertainty, or the tariff agenda more broadly. The Nasdaq had already erased all of its post-election gains by the weekend; on Monday, it sank another 4 per cent. The Dow Jones Industrial Average closed 890 points, or 2.1 per cent, lower.

Traders were particularly bruised by Trump’s comments at the weekend in which he acknowledged the possibility of a recession and seemed to suggest it might be a necessary part of his economic remaking of America, not unlike Paul Keating’s “recession we had to have”.

“I hate to predict things like that. There is a period of transition because what we’re doing is very big. We’re bringing wealth back to America,” he told Fox News Business in an interview that aired on Sunday (Monday AEDT).

Rand Paul, a libertarian Republican senator from Kentucky and an opponent of tariffs, drew attention to the plunging sharemarkets on Monday in a post on X, adding: “The market indexes are a distillation of sentiment. When the markets tumble like this in response to tariffs, it pays to listen.”

This hardly needs to be pointed out to Trump. The lifelong businessman is an avid market watcher; indeed, he made a booming sharemarket a marker of presidential success, claiming credit when it rose and savaging former president Joe Biden when it fell.

But on Sunday he sang from an entirely different song sheet, telling Fox: “What I have to do is build a strong country. You can’t really watch the stockmarket.”

On Monday, as the markets tumbled, the White House’s strategy was to lie low and otherwise blame Biden. Trump did not appear on camera; a rarity for a president who has made a show of being busy and answering reporters’ questions on a daily basis, in contrast to his predecessor.

Instead, deputy chief of staff Stephen Miller appeared on cable network NewsNation to deflect the blame. “I don’t think you appreciate the magnitude of what President Trump is in the process of repairing,” he said, claiming Biden had left the US “on a path to economic oblivion”.

And in a written statement, deputy press secretary Kush Desai pointed to large investments that companies had pledged to make in the US since Trump’s election, without mentioning the market slump. Trump delivered growth in his first term and would do so again, Desai said.

In recent statements, Trump and his key advisers have displayed an indifference to the consequences of their drive to remake America. The president has repeatedly acknowledged there may be short-term pain, and his Treasury secretary, Scott Bessent, said the economy could enter a “detox period”.

But looking at what Trump says can be a fruitless exercise. And what he has actually done on tariffs – the flip-flopping and reverse pikes – reveals a level of skittishness.

On Monday, Ontario, Canada’s most populous and important province, whacked a 25 per cent surcharge on energy exports to the US. Trump responded in a late-night social media post: “Your [sic] not even allowed to do that … Canada is a tariff abuser, and always has been, but the United States is not going to be subsidising Canada any longer.”

The latest we have heard from a Trump administration figure on the steel and aluminium tariffs suggests the plan is for them to proceed with no exemptions.

But with Wall Street nervous, Trump under pressure and retaliatory measures mounting, you have to wonder whether they’ll go ahead.

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