Reining in the vassal states

[WASHINGTON, DC] After Donald Trump won the election last November, investors were in a cheerful mood, as was the public, with the stock market roaring in expectation of waves of government deregulation and tax cuts. Meanwhile, opinion polls suggested that the American people were bullish, as they awaited the ushering in of the new “golden age” that the returning president had promised.

The conventional wisdom at that time was that President Trump’s threats of imposing a series of tariffs on US trade partners were part of an effort to win leverage with – and squeeze concessions from – them during the coming negotiations. At the same time, reforming the federal government was seen as producing benefits to everyone.

But, more than six weeks into Trump’s return to office, the mood has changed – with the financial markets in a bearish mood, consumer confidence sagging, and the public losing its earlier confidence in the president’s promises.