Parents teach their children that their actions have consequences.
In physics class, we learned an action generally is associated with a reaction. These actions and reactions are described as physical laws. Among other things, we rely on them to fly airplanes and orbit space stations.
Economics describes the consequences of actions in the marketplace. Although President Trump says he doesn’t “believe in” the “laws” of economics, he can’t escape them or intimidate his way out of them.
President Trump and his team have conducted a series of actions in the very brief time of his second presidency, including imposing tariffs, closing down USAID, proposing to close the Department of Education, and severely reducing personnel in other departments, including the IRS and Veteran’s Affairs. Congress is working on a budget that would severely reduce Medicaid and food assistance programs.
We are seeing natural consequences of these actions that are isolating the United States and hurting U.S. businesses and residents.
The response of Canada, Mexico and China to U.S. tariffs is to impose retaliatory tariffs. China is imposing a 15% tariff on U.S. agricultural products. During President Trump’s first term, U.S. agriculture suffered billions in losses, requiring a bailout by the federal government. It’s likely to happen again. China also has suspended U.S. lumber imports and blacklisted 15 U.S. companies.
After the first Trump administration imposed tariffs on China’s goods, China shifted its trade partnerships to buy most of its soybeans from Brazil and Argentina instead of the U.S and reduce its exports to the U.S.
When USAID was shut down, millions of dollars of shipments from U.S. farms that were in the process of being shipped were left to rot, leaving U.S. farmers “holding the bag.” USAID annually buys about $2 billion in food aid from U.S. farmers. If farmers can’t depend on being paid, they won’t plan crops for USAID.
Canada has been sending about 75% and Mexico about 80% of their imports to the United States. Now both countries are seeking alternative trading partners. Canada is considering joining the European Union and selling crude oil to Europe and Japan.
President Trump’s imposing and then pausing tariffs has created confusion and uncertainty for investors. On Monday, March 10, 2025, the Standard & Poors 500 index fell 2.7%, 9% below a record set during February and erasing all the gains it made since Election Day.
Live Congressional Town Hall meetings are being scaled back or converted to “virtual” meetings after angry constituents mobbed the meetings because people are unhappy about the power given to Elon Musk as the (unelected and unapproved by Congress) head of the Department of Governmental Efficiency. They are also afraid the tariffs imposed by President Trump will lead to higher prices and that government benefits and services are being cut and will be cut further.
President Trump is insulated from these consequences, but representatives in Congress aren’t. The mid-term elections will take place in 2026. During his first term, the Republicans lost control of the House of Representatives during the 2018 mid-term elections.
If we’re still allowed to vote (President Trump has asserted control of the Federal Election Commission), unhappy constituents could seek to stop “slash and burn” government reform and isolationist foreign policies by voting Republicans out of office.