The Pod Save America bros have a new theory for why President Donald Trump abruptly walked back his sweeping tariffs on products from Canada and Mexico less than a week after they took effect.
On Thursday, Trump announced for a second time he was delaying the 25 percent duties—which he considers a negotiating tool for dealing with foreign countries, even though American companies pay them—after the stock market plunged by 2 percent.
The tariffs were originally supposed to take effect Feb. 2. Then March 4. Now they’re slated for April 2. Maybe.
Asked to explain a possible rationale behind Trump’s wild reversals, Pod host Dan Pfeiffer said Trump might be following the “madman theory” and trying to be unpredictable, because it gives him the upper hand in negotiating.
But there’s a flaw in Trump’s execution, he explained during Friday’s podcast episode.
“The madman theory is that you are pretending to be a madman to keep your opponents on their toes. If you’re an actual madman, it doesn’t work quite as well,” Pfeiffer said. “Because you don’t have any defined objectives, you don’t have a strategy. You’re just being an imbecile.”
Host Jon Favreau said the other issue was that while Trump might enjoy being unpredictable, markets respond to stability. Companies can’t make decisions about production, staffing and retail if they have no idea when and if the tariffs will take effect after all.
“If you can’t have any sense of what’s going to happen because there’s a guy in the White House who’s capriciously making decisions left and right for no foreseeable reason, then [businesses] are going to hoard cash and try to wait out the uncertainty and the chaos for a better time for investment,” Pfeiffer added.
“That’s going to be a self-fulfilling prophecy that’s going to hurt the economy,” he said.
