U.S. stock markets have lost some $5 trillion in the three weeks since U.S. President Donald Trump initiated a series of trade wars. Tariffs have been raised against multiple countries on various products. Trump has lashed out in various directions, often rescinding tariffs only to threaten to reimpose them and doing so with allies, competitors, and adversaries alike—from China, to Canada, to Europe. Anyone who had thought the administration would only use tariffs as a threat was quickly disabused of that notion.
What sort of information do falling stock markets convey about tariffs? Should the United States want the jobs that tariffs promise to bring back? And does Trump’s agenda call into question the post-neoliberal project embraced by some Democrats?
Those are just a few of the questions that came up in my recent conversation with FP economics columnist Adam Tooze on the podcast we co-host, Ones and Tooze. What follows is an excerpt, edited for length and clarity. For the full conversation, look for Ones and Tooze wherever you get your podcasts. And check out Adam’s Substack newsletter.
Cameron Abadi: I’m curious how we should think about the stock market and the information it conveys. What kind of signal is this exactly? What kind of information do stock markets communicate in the first place?
Adam Tooze: What the stock market is basically saying is that they got it wrong. They were enthusiastic about Trump’s victory last autumn. They thought that this promised tax giveaways and a pro-business agenda for the United States. And all of that has kind of crumbled somewhat in 2025 as we’ve seen action by the Trump administration that just defies economic logic in a reasonable way. You know, the Canadian, Mexican, and China tariff push affects about $1.4 trillion worth of goods imported to the United States. And contrary to the Trump line, this is actually most likely going to be a tax on American consumers and American businesses. The efforts by Walmart to transfer this to its Chinese suppliers have got it into trouble with the Chinese authorities who saw this coming from a mile away and said, “Nope, what you’re not doing is imposing the insanity of your economic policy on producers in China. You cannot demand price cuts from them so as to offset the effects of the tariffs that your government is imposing.”
It’s not good for business, and the markets reflect this. The profit expectations of American business are lower under a scenario with tariffs than without. And it’s as simple as that. What we’re not seeing so far is a disorderly market. So—and this is important to understand about financial markets—if prices are going down, what this generally means is that people are buying and selling at lower prices. And for every person who’s selling, which helps to drive the price down, there’s somebody buying after all. And so we’re not in the situation in which it’s all sellers and no buyers. That would be a disorderly market. And then you tend to see sort of Wile E. Coyote kind of moments where you go over the cliff and then all of a sudden, you know, you just plunge to the ground. We’re very, very far away from that kind of situation.
So what’s going on is simply a kind of rebalancing of portfolios where people, who probably made considerable profits on the upswing of the market, have concluded that there really isn’t any more profit to make, and they don’t fancy riding the escalator down. And folks, on the other hand, who are relatively more optimistic about the medium-term prospects or feel that they missed out on the stock market when it was going up are attempting to buy the dip. I mean, they’re trying to find the bottom. They’re trying to spot the moment at which some of the stocks that are being offloaded might be attractive for a new entrance. And that’s the kind of reshuffle that’s going on. But it’s a judgment by the markets on the performance of Trump, of Tesla, and, of course, of Musk, who’s a very important symbolic figure for a certain sort of tech booster, tech optimist in the American markets and the chatter that accompanies market-making and trading in the United States.
CA: I’m curious what kind of jobs could these tariffs bring back to the United States in the first place. Are these jobs that the United States should want?
AT: I think it’s important to disentangle things at this stage because things are getting pretty messy. You know, there is a continuity with Bidenomics and with the strategic moves within the first Trump administration on certain sectors like chips. That’s one kind of logic for doing various types of national economic policy. And the argument there is you want to have a presence in this strategic industry, and, obviously, you also need a workforce, and so you’re going to, as it were, rear the jobs necessary. And to get the top Taiwanese, South Korean chip manufacturers to locate in the United States, you have to build an entire infrastructure. So that’s one kind of logic. And you can see that at a pinch extending to electric vehicles, once upon a time under former U.S. President Joe Biden, right? The idea was the auto industry is strategic. And if the future of the auto industry is battery electric vehicles, then we need to have a position there, we need to start building the workforce, and we need to start building the infrastructure necessary for that, or we need to accompany the existing workforce of the auto industry through the transition—and it might be painful.
And then, at the very bottom rung of this kind of logic would be the steel industry, where you’re saying, “No nation can be free, proud, and macho and build big stuff, heavy stuff, unless it’s got a steel industry, and so we need to protect the American steel industry and the workers who work there.” And maybe at the absolute outer limit of this, you’d have the shipbuilding obsession. America needs to be able to build really big ships, and it needs to be able to build more. It can’t currently build hardly any, and so we need to do various types of subsidy and protection. So that’s a logic that answers your question. Emphatically yes, Cam, we definitely want all of these jobs. We want chip jobs, we want car jobs, we want steel jobs, we want ship jobs. So that’s a simple answer.
When you do a general tariff against Canada or China, it’s far, far less obvious. U.S. Treasury Secretary Scott Bessent has said, you know, access to cheap goods is not the essence of the American Dream, the American Dream is rooted in the concept that any citizen can achieve prosperity, upward mobility, economic security. This is, again, this move where you’re doing an economic policy of a fairly blunt kind, a general tariff with a view ultimately to anchoring some sort of social policy vision, like what American society should be. And this is where your question really cuts, which is, are you seriously suggesting that on-shoring the manufacturer of T-shirts or cheap electric appliances is the realization of the American Dream in this current moment? What on Earth would you mean by saying that? Because these are not high-paying jobs with career prospects in which you would expect to have skill advancement, the realization of human potential, or something that would make an American man or woman be proud to have these jobs.
The gender dimension is important, I think, here, because if you’re talking about jobs, where is your problem? What is your problem? And it can’t be overall unemployment because overall unemployment is very low because the Biden economy was not a bad economy. It was a high employment economy, as Trump’s was in the first administration. So America isn’t in the 1970s and 1980s, with chronically high deindustrialization unemployment. So when you’re saying we need more jobs, who is it that’s going to fill these? Well, it must be underemployed bits of the population. And it isn’t the women you’re talking about, because you’re against any kind of family policy that would enable women with families to work more. So you must mean men. So, really, the story has got to be about the fact that in the 1950s, 97 percent of prime working age men—so that’s 24 through 55—worked, and now it’s closer to 90 percent. And so, is the proposition genuinely that reshoring tough, hardworking manufacturing jobs is going to lure that missing quota of American men back into the labor market? Is that really the proposition? It doesn’t make a lot of sense, right? It’s a kind of incoherent symbolic politics. And when we actually get to the level of implementation right now, it’s the maddest thing anyone’s ever seen in economic policy by a major economic power.
CA: What kind of light does the Trump agenda shed on the broader post-neoliberal project—the project to move past the era of neoliberalism and the associated policies of free trade—that has also been embraced by Democrats. Does the way this agenda is playing out right now give reason to question that broader project?
AT: I’ve really been thinking about this a lot because, you know, I was on the record as a critic of Bidenomics in part because I saw it as a deep continuity with MAGA 1.0. I rather cruelly referred to Bidenomics as MAGA for thinking people. And the question now is: Adam, do you really stand by that judgment in light of MAGA 2.0? Could you honestly say that you think Trump in this incarnation is Bidenomics for really, really unhinged people? And I’m quite set back by that. This is a trade war. It’s the stupidest trade war ever. So then the question is, you know, is the sheer stupidity and the kind of radicalization of MAGA 2.0—is it a bug or is it a feature? I mean, if it’s a bug, then what we would say is, well, there is a post-neoliberal trend going on. We see it all over the world. We saw it in Trump 1.0 and then Bidenomics, and then Trump 2.0 was the continuation of that, but with a special craziness that we’re getting such ample portions of right now.
But I’m increasingly skeptical about that. So, what if we think of the unhinged, punitive, bullying—stupid, let’s call it—thuggish element of this as not a bug but a feature. How do we think this through? And I think we have to come back to that riff that I developed a couple of shows back, where we were talking about Trump as anti-professional managerial class (PMC) politics. And what we could say, I think, is that neoliberalism was nothing if not a professional managerial class project, right? It was a doctrine. It was an ideology. It was, in many ways, kind of counterintuitive. It was class politics that favored that group over the working class. And, in a sense, the anti-PMC, anti-neoliberal backlash has two wings. And you could think of Bidenomics and the central liberal people—I would count myself among their number—as the kind of seminar room version of the anti-neoliberal backlash. And it’s kind of internal to the professional managerial class. We look at ourselves and go, you know what, this isn’t working. It’s exclusionary. It’s disastrous. It produces all this inequality that’s appalling. It’s not self-sustaining. It’s bad for the environment. You know, it’s an internal reform project within the PMC elite to rethink. And as much as the Bidenomics people, in often really cloying ways, would describe themselves as, you know, going to meet the American people where they are or Sullivan’s foreign policy for the American middle class, not by or of, but for the American middle class, ultimately, it remains a PMC project.
And the interesting thing about Trump is that this is the cheeseburger, Diet Coke, Mar-a-Lago, long day of golf, and I’m now going to sound off about Canada, Mexico, and God knows what else. MAGA 2.0, I think, exposes the fact that the anti-neoliberal element of Trump is really an anti-PMC project. It’s a genuine rejection in that sense of both the class base and the ideology that went with it in favor of something much rawer—something, you know, no less, of course, privileging of certain sorts of business, but more plebeian in its understanding and, above all, targeting the seminar room. And listeners may think I’m obsessing about universities right now but it’s pretty hard not to if you work in an American university at the current moment, because what MAGA is doing is, if you like, targeting the universities as institutions of the PMC, both generative of the original neoliberal project, the kind of Larry Summers of this world—which Trump, of course, doesn’t want to have any business with—and, on the other hand, the woke liberal and, at some level, the Bidenomics version of the anti-neoliberal scheme, which is co-targeted.
And so, you have this division within the anti-neoliberal camp, which is a seminar room-style post-neoliberal politics, which Bidenomics was the expression of. And it’s not for nothing that former U.S. National Security Advisor Jake Sullivan has just literally gone off to a position at the Kennedy School at Harvard. Like, settling back into the frame of the university system. And the cutting edge of MAGA right now is tariff politics on the one hand and then an all-out assault on the PMC elements of the American state machine, the Department of Education, the statistics bureaucracy, U.S. Agency for International Development, and now leading research universities that are being directly targeted on a variety of different grounds, on antisemitism, but also just on vaccines, on foreign aid.
2025-03-17 22:49:00
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