President Trump’s decision to pause most of his newly enacted tariffs for 90 days has pulled the American economy back from the brink of an entirely self-induced recession, for now.  However, a three-month pause may not be enough to undo the political and economic damage that has already bee n done by Trump’s erratic approach to the economy, or the global order writ large.  In effect, Trump is now actively undermining the global economic system that the U.S. built and has led for eight decades.   Trump’s victory last November came, to a large degree, due to his promise to unleash American economic growth, provide economic stability and lower inflation. But this administration is seemingly determined to deliver anything but.  To be clear, it’s not that Trump’s desire for more favorable trade deals is bad. Rather, the problem threatening the economy, and Republicans’ midterm hopes, is that trade wars, tariffs and the lack of any semblance of a coherent trade or economic policy will strangle America’s growth engines. Worse still, the administration’s chaotic rollout of said policies is exacerbating the uncertainty currently felt by households and companies alike. It is also threatening to plunge the country into a recession, despite the damage that would do to Republicans in next year’s midterms. Indeed, financial markets have been roiled by the administration’s haphazard tariff announcements, which Wharton School Professor Jeremy Siegel called “the biggest policy mistake in 95 years.”  Even Wednesday’s historic surge in markets following the tariff pause was essentially cut in half on Thursday following the eruption of a full-blown trade war between the U.S. and China.  Cognizant of the growing political risks, a handful of congressional Republicans have begun working on legislation that would limit presidential tariff powers.   In the Senate, Republican Sen. Chuck Grassley (R-Iowa) is working on a bipartisan bill, while in the House, reciprocal legislation is being advanced by Reps. Don Bacon (R-Neb.) and Josh Gottheimer (D-N.J.).   Even Sen. Ted Cruz (R-Texas), a fierce Trump ally, slammed the “voices in the White House that want high tariffs forever,” a rare sign of discontent from within the MAGA universe.  Trump has promised to veto any bills rolling back his power to levy tariffs.   But if this chaos continues for much longer, Trump is going to find himself with a Democrat-controlled Congress for the last two years of his term.  Put another way, the turmoil Trump is causing may soon be enough to compensate for Democrats’ own lack of direction, coherent messaging, or policy platform and record-low approval numbers.  Trump supporters have continually insisted that he campaigned on a policy of using tariffs, so Americans knew what they were getting. However, it is highly unlikely that this is what they had in mind. Instead of lower prices and surging growth, virtually every economist is predicting Trump’s trade policies to usher in the opposite: higher inflation and slower growth, otherwise known as “stagflation.”   In that same vein, administration officials, particularly Treasury Secretary Scott Bessent, have continually repeated that these policies are designed to benefit Main Street, not Wall Street. That logic is deeply flawed. Wall Street’s losses inevitably become Main Street’s pain, and eventually, Trump’s base will feel the impact.   Contrary to what Bessent and others have asserted, nearly two-thirds (63 percent) of Americans, including an identical share of Trump voters, say that what happens in the stock market is important to them personally, per an Economist/YouGov poll.  Likewise, the administration’s policies are actively undermining the Main Street they purport to support.   Americans benefit tremendously from foreign buying of our debt. This is what allows us to borrow at significantly lower rates compared to the rest of the world.   But as the extreme moves in the U.S. bond and currencies markets this week suggests, investors are losing faith in the stability and trustworthiness of the U.S. The interest rate on the 10-year Treasury note — the benchmark rate for mortgages and other loans — has been unusually volatile over the last week, as investors struggle to understand which direction Trump will steer the U.S. economy.  Even the U.S. dollar, considered the safest currency in the world, is down nearly 4 percent against key currencies in just the last month.   The last time such drastic moves were seen in both markets — yields up, dollar down — over a similarly short time span was the week immediately after the collapse of Lehman Brothers, per Krishna Guha of Evercore ISI.   Taken together, Trump’s trade policies appear poised to undermine U.S. fiscal dominance, potentially leading to a significant rise in everyday prices, while hollowing out the U.S. economy.  To that end, there is growing evidence of discontent with Trump’s handling of the economy.  A majority (53 percent) of Americans believe the economy is getting worse, with similar majorities disapproving of Trump’s handling of inflation (55 percent) and the wider economy (51 percent), according to the Economist/YouGov poll.  Similarly, asked where the administration’s focus is, nearly two-thirds (64 percent) of voters said they’re not focusing enough on lowering prices, while a majority (55 percent) said they’re focusing “too much” on tariffs, per CBS polling.  The same poll also showed that a plurality (42 percent) of voters, including 49 percent of independents, now believe Trump’s economic policies will make them worse off, a 14-point increase from what voters expected in January.  To be sure, Trump and the Republicans were always going to be fighting an uphill battle in midterms. The party in power has seen losses in both chambers in 14 of the last 20 midterm elections, according to Reuters.  For Republicans to buck that trend, they needed to demonstrate that they could deliver on their economic promises and be trusted to govern, yet they’ve done neither to this point.   Trump’s “big, beautiful” budget bill, which includes massive tax cuts, was briefly held up by conservative House Republicans. Despite pressure from Trump, they refused to budge on their demands for deeper spending cuts. Late Thursday, the House Freedom Caucus relented, but there is no guarantee these hardliners won’t revolt again when the time comes to vote on the final product.  With midterms slowly approaching, if Trump cannot pass his long-promised tax cuts, any previous hopes that he would improve the economy will evaporate.   Ultimately, the same economic anger that carried Trump into office and handed Republicans both chambers of Congress could easily turn against them if the economy continues to struggle under chaotic and misguided policies.   As such, if Trump’s tariff policies continue to raise everyday costs while also crippling the stock market, voters will resoundingly reject Republicans next fall.   Douglas E. Schoen is a political consultant and the founder and partner at Schoen Cooperman Research. Saul Mangel is vice president at Schoen Cooperman Research.  ...read more read less