“ONLY THE WEAK WILL FAIL!” President Donald Trump recently posted to Truth Social, a conservative social media platform. A new wave of tariffs would go into effect the next day, and the whirlwind of consequences had already picked up speed. As the stock market lunged into a freefall and fears of a recession mounted, the president and his cabinet desperately sought some way to reassure the American public and ease economic fear without canceling the burgeoning trade war.
Thus began the government’s campaign of gaslighting its own citizens.
At the outset, the tariffs were meant to revitalize American manufacturing industries and accumulate vast sums of tax revenue, enough to fully replace income tax with tariffs.
“We’re going to become so rich you’re not gonna know where to spend all that money,” Trump told reporters one month before the trade war. “I’m telling you. You just watch.”
But American business leaders did not greet the tariffs with festivity; they were sent into a frenzy. Suddenly, Trump’s supposed intentions behind the trade war changed. The tariffs were no longer a permanent means of collecting tax revenue but a temporary negotiating tactic. The Trump administration argued that by striking fear into America’s trade partners, the U.S. brings them to the negotiating table. The president announced that the tariffs would be put on hold for 90 days as negotiations went underway, and investors breathed a collective sigh of relief. That day, American stocks saw their best single-day performance in years. According to Treasury Secretary Scott Bessent, that had been his plan all along.
But Bessent was lying. In the brief absence of the president’s pro-tariff economic advisor, both he and Secretary of Commerce Howard Lutnick barged into the Oval Office, pleading for a tariff pause. It wasn’t until this unplanned meeting that Trump decided to temporarily pause the tariffs.
For the tariffs that remained in place, exemptions had to be carved out for the tech industry. Several days after an executive order clarified this, President Trump posted to Truth Social that “NOBODY is getting ‘off the hook’ for the unfair Trade Balances … There was no Tariff ‘exception’ announced on Friday.” One day later, Apple, whose products rely on Chinese manufacturing, was granted exemptions from the tariffs.
The rhetoric of Trump and his advisors not only contradicts the reality of their own policies, but also the perceived reality of public sentiment. Though 73% of Americans expect prices to rise and firms foresee business conditions declining under Trump’s new tariffs, the administration’s words tell another story.
“I think there’s a great optimism in this economy,” Press Secretary Karoline Leavitt said in a press briefing. “Great optimism for the American people, a lot of reason for people to feel optimistic … This is going to be a period of transition. [Trump] wants consumers to trust in him and they should trust in him.”
Despite their attempts to lie their way into a calmed economy, conditions have only worsened. Businesses do not want to expand when American economic policy changes day by day. Investors do not want to keep their money in an economy of uncertainty.
As a result, investors are pulling their money out of American stocks, bonds and the dollar.
U.S. bonds are of particular interest. Governments sell bonds as a way to raise money; investors buy government bonds known as Treasurys, and in return, they’re paid back their original investment plus interest. The bond market is typically a safe haven for investors fleeing the volatility of the stock market, but lately it’s become its own source of instability.
Because investors have been selling their American bonds en masse, the yield rates of these bonds are rising. Simply, this means that the U.S. government is raising the interest rate it pays investors to keep people buying bonds. And when the government raises its interest rates, other lending rates rise in tandem: mortgages, car loans and credit cards, to name a few. American consumers must now face higher costs in seeking out loans.
“If Treasurys are not a safe-haven asset, that has major implications for balance sheets across the board,” said Ernie Tedeschi, director of economics at Yale University’s Budget Lab. “So much of world finance is predicated on U.S. Treasurys being safe.”
In trying to obfuscate the flaws of his own plan, Trump has only further entrenched the economy in turmoil. The president believes it is better to distort reality than to recognize error, and Americans are paying the price.
Nicholas Sherwood is an Opinion Intern for the spring 2025 quarter. He can be reached at nesherwo@uci.edu.
Edited by Isabella Ehring and Joshua Gonzales