Tariffs might sink Trump’s second term

He is also rolling back federal assaults on mainstream American values — such as by policing racial favoritism. Mr. Trump was elected to counter the excesses of the left on climate, culture and censorship, and he is doing it.

On other priorities, the execution hasn’t matched the promises. That would seem to apply to DOGE, which we’ve supported but has been so frenetic it isn’t clear what it is achieving. Easy targets like USAID make for symbolic victories but no fundamental change in the growth of government. The Trump budget will offer more reform proposals, if the White House can get them through Congress. He badly needs a pro-growth tax bill.

Even on popular causes, one problem has been needless excess. Harvard and other universities need to change, but trying to dictate their curriculum and faculty choices is an intrusion on free speech and risks defeat in court. His deportation of criminals is worthwhile, but denying due process and toying with the courts will sour the effort. The White House motto seems to be that if something is worth doing, it’s worth doing too much.

That’s especially true on tariffs, which could sink his presidency. Mr. Trump was elected to control inflation and raise real incomes, but tariffs do the opposite. They guarantee at least a one-time increase in prices on imported goods that will flow through the economy. They portend shortages for consumers, and for businesses that source goods and components from abroad.

The tariffs are the largest economic policy shock since Richard Nixon blew up Bretton Woods in 1971, which unleashed inflation that Nixon tried to stop with wage and price controls and a tariff. The economic consequences arguably doomed Nixon’s second term, perhaps as much as Watergate.

It’s a mistake to think the tariff damage is only domestic. The willy-nilly assault on friends and foes has shaken global confidence in U.S. reliability. Ken Griffin, the investor and major donor to Mr. Trump, summed it up last week as a self-inflicted blow to the American brand. The United States is needlessly ceding global economic leadership.

China is already taking advantage by courting U.S. allies as a more dependable giant market. This will make it much harder to build a trade alliance to stop China’s often predatory economic behavior. Mr. Trump last week called us “China Loving,” which must amuse Beijing. Mr. Trump’s tariffs on allies are the real gift to Xi Jinping.

There are signs Mr. Trump is finally recognizing some of the tariff risks, as he now talks of doing some 200 trade deals. He is also saying he might unilaterally cut his 145% tariff on Chinese imports. We’d like nothing better than to see a retreat—a “Mitterrand moment,” as we wrote last week about the reversal by the 1980s French socialist. But Mr. Trump remains a long way from making such a pivot, and those trade deals won’t be easy to strike.

Mr. Trump’s second-term foreign policy so far is a work in progress. He is trying to reclaim Middle East sea lanes from the Houthis after Joe Biden’s timidity. And he is restoring “maximum pressure” on Iran to abandon its nuclear program. These are hopeful signs.

The main cause for alarm is his one-sided pursuit of peace in Ukraine. Until this weekend he had said scarcely a discouraging word about Vladimir Putin while squeezing Ukraine to make concessions that could doom it to future marauding. Much will hang on the details of an armistice, if there is one, and not merely for Europe’s future.

Joe Biden’s retreat from Afghanistan destroyed American deterrence. A debacle in Ukraine would do the same for Mr. Trump, with ramifications for Iran, North Korea and especially Chinese ambitions in the Pacific. Don’t be surprised if China decides to snatch Taiwan’s outer islands or tries a partial blockade. Mr. Trump told us in October that he’d respond to such a provocation with tariffs, but he’s already playing that card without success.