Just after 1 p.m. this past Wednesday, President Trump posted a statement on Truth Social saying that he was pausing, for ninety days, the historically steep, economically nonsensical Liberation Day tariffs on virtually the entire world, which he had announced the week before. Retreat was inevitable. The tariffs had been so hastily designed that they imposed duties of ten per cent on Antarctic islands inhabited by only seals and penguins, and placed a duty of nearly fifty per cent on Cambodia, a producer of cheap textiles that is too poor to plausibly buy much of what we produce. The markets predictably plunged, wiping out more than six trillion dollars in value; Jamie Dimon, the chief executive of JPMorgan Chase, said that the “likely outcome” would be a recession; and a sell-off of government bonds raised the ominous possibility that the U.S. Treasury market would no longer be the world’s reserve of choice. The labor economist Arindrajit Dube wrote, “Never in human history has a whimsical decision by a single person destroyed so much wealth.”

The markets, the President allowed, had become “a little bit yippy.” But Trump never really retreats; he repositions. In his Wednesday post (“Thank you for your attention to this matter!” he closed), he revealed that he would be leaving in place ten-per-cent duties on most countries and immediately escalating a trade war with China, imposing tariffs of nearly a hundred and fifty per cent. The stock market rebounded rapidly on Wednesday, when most of the more inane tariffs were rescinded, and then fell again on Thursday, when the reality of the conflict with China set in. Had the President actually pulled back at all?

Jason Furman, who’d chaired President Obama’s Council of Economic Advisers, wrote on social media, “I don’t think people realize that in important respects tariffs are now higher & more inflationary than what was announced” on Liberation Day—even the “reduced” tariffs are now far higher than those levied by any other large nation. So the President’s new approach may not be the end of a self-induced destabilizing and hugely risky period in global economics but the beginning of one.

Trump’s efforts to make a bold adjustment in the relationships that govern the economic world have some financial analysts asking why. Viktor Shvets, a global-market strategist at Macquarie Capital, said, on Bloomberg’s “Odd Lots” podcast, “I keep asking myself, ‘What is this Administration trying to do?’ ” Was the objective to reindustrialize the United States, or to raise revenue to help pay for tax cuts to the rich, or to change the global flow of funds? “My answer consistently is, they want to remake America,” Shvets said. “But you can’t remake America unless you remake the world at the same time. So it’s a revolutionary movement.”

As Shvets went on to hint, the second Trump Administration is taking shape as a through-the-looking-glass Team of Rivals. It comprises big personalities (Trump, Elon Musk, J. D. Vance) with incongruous views of what America’s role in the world should be—a rift highlighted this past week, when Musk publicly denounced the Trump trade adviser and tariff architect Peter Navarro as “dumber than a sack of bricks.” But, even if the advisers have different objectives, they seem to share a sincere repugnance for the universalism of the liberal world order and a desire to reimagine it radically—to weaken its universities, to abridge the global movement of people and goods, to retreat into a fortress of self-interest.

If the Trump Administration could pivot so easily from a punitive tariff system aimed at practically everyone to one that summoned a sudden trade war with China (which quickly imposed retaliatory tariffs), perhaps that’s because the details of the policy change mattered less to the White House than its scale—that it represents a dramatic break from the old system. On Tuesday, as the markets were plunging, Trump told the National Republican Congressional Committee, “They’ve ripped us off left and right, but now it’s our turn to do the ripping.”

That remark presumes a brute power—an ability to apply transformative torque—that the U.S. may not have for much longer. The week of the Liberation Day tariffs operated as a test of how the markets would react and how the real economy would reset, and it provided some results. We now know that investors don’t trust Trump to reinvent the trade system, and neither do many people in his own party: in a hearing this past week, Senator Thom Tillis, of North Carolina, asked the U.S. Trade Representative, Jamieson Greer, “Whose throat do I get to choke if this proves to be wrong?”

The White House’s theory seems to be that high tariffs will eventually incentivize manufacturers to relocate, say, auto plants and aluminum smelters to the U.S. But businesses need stability to make the kinds of major capital investments that building new factories in this country requires, not a climate defined by ninety-day pauses and abrupt reversals. Even amid tariffs, the Times found little appetite for re-shoring among companies: “Staying in China and making China work is everyone’s strategy right now,” a U.S. entrepreneur said. Meanwhile, China and the European Union are exploring their own trade relations. The danger behind Trump’s posturing is that, by so emphatically insisting on America’s indispensability, he may be undermining it. (On Friday, Axios reported, “The world’s hot new trade is ‘sell America.’ ”) Currently, some ten per cent of global trade flows through the U.S., but, if nations continue to look for other trading partners, how much of that will be lost?

Beijing, for its part, is preparing for a trade war. According to the Financial Times, Chinese state and commercial institutions have organized a “national team” to fight the tariffs, coördinating investments in Chinese companies to offset trade losses. And, though Trump has spent a decade inveighing against the effects of China’s economic gains on American communities, the current chaos indicates he does not really have a road map for how to unwind them, beyond complete faith in his own ability to pull off a deal. He means to gamify tariffs so that he can leverage each threat for a better negotiating position. But too much now rests on presumptive talks to come: one estimate suggested that the new tariffs would cost the average American household forty-seven hundred dollars a year. Unlike partisan politics, trade wars aren’t zero-sum. Sometimes everybody loses. ♦