The World Really Dislikes Trump’s Bitter ‘Medicine’

Trade wars and rumors of wars: Many investors are still panicking. President Trump’s 10 percent tariff on nearly all imports took effect on Saturday, and tougher tariffs on about 60 nations will kick in on Wednesday. Markets the world over were clearly jittery.

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Over the weekend, Trump said he wasn’t worried. He likened the new tariffs to “taking medicine.” “I don’t want anything to go down. But sometimes you have to take medicine to fix something,” he told reporters aboard Air Force One.

International markets didn’t like it, and losses continued to mount: Today Hong Kong’s Hang Seng suffered its worst day since 1997, dropping 13 percent; Japan’s Nikkei fell about 8 percent. Western markets—the FTSE 100, Germany’s Dax—also plummeted before stabilizing a bit later in the day. Even the share price of German defense companies dropped as investors worry Germany will no longer be able to afford the defense spending spree it announced.

Investors have fled to safe-haven assets, pushing gold prices to a record $3,128 per ounce and driving U.S. bond yields lower. The U.S. dollar weakened against currencies like the yen and Swiss franc. Economists warn of slowing global growth, potentially dipping below 2 percent this year per Oxford Economics. They also see a heightened risk of recession. J.P. Morgan estimates a 60 percent chance of a U.S. downturn by year-end, as the tariffs threaten to raise consumer prices, disrupt trade norms, and provoke further retaliation from key U.S. trading partners.

Tariff chemo: Trump’s tariffs, aimed at correcting deep trade imbalances, have economic logic: Decades of globalization have hollowed out U.S. manufacturing and left the nation overdependent on foreign goods, particularly from China, which has long exploited lax trade norms. It would be impossible to fix these problems without breaking some china, so to speak. But Trump certainly could have rolled out this plan in a less shocking way: a phased approach, targeting specific sectors with clear timelines, for example.

If these tariffs are “medicine,” they are stiff medicine—maybe like aggressive chemotherapy that induces nausea, vomiting, debilitating fatigue and hair loss. The president’s critics are certain to savage him no matter what he does, but this plan handed ammunition to those who argue the cure risks killing the patient.

Wait and see: Still, there are positive signs. More than 50 countries are calling the White House to initiate negotiations over trade. Vietnam said it would slash tariffs against the U.S. “to zero.” Taiwan is pursuing zero-tariff agreements and pledging increased investment in the U.S. India is considering cutting tariffs on $23 billion of U.S. imports like gems and pharmaceuticals, avoiding immediate retaliation as talks progress. One can imagine markets balancing out as deals are made and the steepest tariffs are reduced. The Dow, after plunging on Thursday and Friday, seems to be behaving less erratically as of this morning.

In today’s economically and informationally interconnected world, overreaction is instinctual. The true effects of what President Trump has done, and the adjustments he makes as other nations respond, will play out over weeks and months. I still suspect that America’s prophesied resurgence has yet to be fully realized. We wait and see.

Meanwhile, war stops for nobody: While Israeli Prime Minister Netanyahu was on his way to the U.S. to visit President Trump this week to talk about tariffs, Hamas fired 10 missiles on Israel. Half of them got through, hitting civilian areas and injuring at least one man.

America still wants Europe to become a military superpower: The U.S. continues to pressure the Continent to increase its military spending, pressuring NATO members to up defense spending to 5 percent of GDP.

Friends or foes? Israeli Prime Minister Netanyahu just spent five days in Hungary visiting “my friend, Viktor” Orbán. Mihailo Zekic covers the strengthening relationship between Israel and Hungary and its possible future in his feature story “Should Benjamin Netanyahu Trust Viktor Orbán?”

“German car giants shake off their Nazi past to prepare for war”: This shocking headline appeared in the Telegraph on Saturday. The article traces the origins of automotive giant Volkswagen to Adolf Hitler’s vision of a “people’s car,” designed by Ferdinand Porsche, which later morphed into wartime production of military vehicles like the Kübelsitzwagen using forced labor. Post war, these companies distanced themselves from this legacy. Today, though, things are shifting as Germany, spurred by Russia’s invasion of Ukraine and Donald Trump’s election, ramps up defense spending.

“The mood in Germany is one where the excess capacity in the car sector, which has long been an issue, is now morphing into a debate about how car makers can switch into defense production,” says Sander Tordoir, the chief economist at the Centre for European Reform. “So this makes sense for them, I think, because defense is where the dynamism in German industry will now be.”

Critics, like Dutch historian David de Jong, accuse firms like Porsche of whitewashing their Nazi-era profiteering, yet the industry appears poised to leverage its technical expertise for Germany’s new militarized future.

Berlin and Tel Aviv officially became sister cities today, a milestone announced by their respective mayors, Kai Wegner and Ron Huldai. The agreement defies complex historical ties stemming from Germany’s Nazi past and Israel’s founding. Wegner emphasized it as a stand against rising anti-Semitism and pledged to keep the Israeli flag raised over Berlin’s City Hall until all hostages from the Oct. 7, 2023, Hamas attack are released. Huldai hailed the move as a bridge for “historical responsibility” and future cooperation. It is a vivid symbol of a fraught relationship that is prophesied to end very differently than these men expect.

A step in a healthy direction: A growing number of U.S. states are pushing to ban artificial food dyes from their food supplies, driven by health concerns and bipartisan support. West Virginia enacted a sweeping law last month to phase out seven synthetic dyes—including Red No. 40 and Yellow No. 5—and two preservatives by 2028, citing links to neurobehavioral issues in children and other risks. In 2023, California banned four additives statewide and six dyes from school meals. Virginia enacted a similar school-focused ban last month. According to the Environmental Working Group, at least 20 states have introduced nearly 40 bills this year to restrict these chemicals. Good riddance. And thank you, Robert F. Kennedy Jr., for putting impetus behind such commonsense actions.