Trump’s smoke and mirrors

"It's almost like they knew Trump was bluffing." That is how Bloomberg columnist John Authers described Mexican President Claudia Sheinbaum and Canadian Prime Minister Justin Trudeau's handling of the US president after he unjustifiably threatened their countries with 25% tariffs.

The tariffs were postponed just before they were supposed to take effect. The reason, according to Kelly Ann Shaw, a former Trump adviser, was that America's neighbors "came to the table … with commitments that sufficiently addressed the president's concerns."

But what did Sheinbaum and Trudeau offer? As far as I can tell, they committed to things that they had already committed to, albeit with some additional symbolic gestures – like a new Canadian "fentanyl czar" – thrown in. One is reminded of January 21, 2025 (a date that has already receded into the mists of time), when Trump announced that OpenAI, SoftBank, and Oracle would embark on a massive AI-infrastructure project that promises to create "more than 100,000 jobs almost immediately." CBS journalist Jennifer Jacobs left that event believing that "the companies are expected to commit $500 billion into Stargate over the next four years," even though "details of the new partnership were not immediately provided."

In fact, there will be no $500 billion, and the partnership was not new (it was in the works long before Trump's inauguration). Nothing close to $100 billion, let alone $500 billion, will be deployed immediately, and nothing close to 100,000 jobs will be created. Welcome back to the chaos that prevailed during Trump's first presidency, in 2017-20.

But the next four years will not feature only chaos. The second Trump administration also will pursue policies with effects on the United States that will almost certainly be deeply harmful. Beyond deportations, tax cuts for the rich, symbolic measures to stoke the culture war (banning all mentions of "diversity"), and schemes to extort massive bribes from corporations and other private parties, it is anyone's guess what the agenda will look like. But it would be wrong to conclude that Trump II is a paper tiger.

Whatever is coming, one must remember that the principal purpose of any Trump pronouncement is to gain attention. In every instance, slapdash ideas that provoke meaningful pushback – especially from the market – will be quietly dropped, as long as the immediate news cycle can close with a declaration of victory.

We saw Shaw provide such a declaration in the case of the tariffs; and Jacobs dutifully transcribed the purely aspirational $500 billion figure. Trump can now claim to have bested Joe Biden's $280 billion CHIPS and Science Act, and Trumpists and other uninformed Americans will believe him. Yes, Elon Musk – who has been playing the role of co-president – immediately threw a tantrum following the Stargate announcement, pointing out that "they don't have the money." But this man claims that all Teslas currently on the road will become fully automated driverless cybertaxis in the next two years.

How are those of us who want to inform the public and advance public reason supposed to react to all of this performative con-artistry, when we know that it is 90% mirage and 10% destructive chaos? Most of us are doing what we can. For example, Michael R. Strain of the American Enterprise Institute is out there on X (formerly Twitter) earnestly telling people that Trump's threatened tariffs would probably be as destructive to the US economy as Brexit has been to the British economy:

"The Vice President argues that President Trump is looking out for the interest of American citizens. But these tariffs will raise prices for consumers and reduce employment opportunities for manufacturing workers. President Trump's first trade war increased consumer prices. It reduced manufacturing employment and made domestic manufacturing less competitive. It failed to reduce the trade deficit. The second trade war is likely to more severely increase prices and reduce employment and competitiveness. The first trade war hit $380 billion of imports. This one hits $1.4 trillion. And economic integration with Canada and Mexico is substantial."

Strain is absolutely correct. But what the US desperately needs is media outlets that take the trouble to discern which Trump pronouncements are backed by dedicated policymaking teams and bureaucracies with the intent to follow through, and which are not. As matters stand, too many respected outlets represented among the White House press corps are more interested in being part of the show than in assessing the play.

J. Bradford DeLong is Professor of Economics at the University of California, Berkeley and a research associate at the National Bureau of Economic Research.

Disclaimer: This article first appeared on Project Syndicate. It has been edited and published by a special syndication arrangement