Liberation Day Brought Us Here
Trump’s tariff catastrophe taught the world about TACO. We may have over-learned the lesson.
Could peace in Iran be getting closer? Yesterday, Iranian President Masoud Pezeshkian suggested that Iran would be willing to end the war in exchange for U.S. security guarantees, which led to an immediate jump in stock prices—even though Pezeshkian’s remarks were heavily caveated.
Then, this morning, Trump posted that Pezeshkian had just asked America for a “CEASEFIRE,” adding that “we will consider when Hormuz Strait is open, free, and clear.” Whether Trump was breaking new news or just responding to yesterday’s reports isn’t clear.One reason to think this might just be Trump winging it is that he described Pezeshkian, who has been in office since 2024, as “much less Radicalized and far more intelligent than his predecessors”—apparently taking him to be one of the leaders who recently took over for a top official killed by Israeli or American strikes.Trump is planning to give a primetime address on Iran to the nation tonight. Should be illuminating! Happy Wednesday.
TACO Is The Opiate of the Masses
by Andrew Egger
Liberation Day! One year ago tomorrow, Donald Trump took the lunatic policy swing that would bring a swift end—though he didn’t yet know it—to the first act of his second term.
He’d been reelected with a mandate to rule, he believed, and he’d wasted no time getting started. He’d empaneled DOGE to run riot through the executive branch, and Elon Musk’s posse of tweaky manlets had already ripped much of the wiring out of the walls of the government. He’d gotten started immediately with his personal-vengeance campaigns of political retribution and economic extortion, and he’d begun to spin up an immigration-enforcement machine to deliver on his promises of mass deportation. And now it was time to turn to the biggest economic swing of all: reorienting the entire global economy through an unbelievably strict regime of massive tariffs.
“April 2, 2025 will forever be remembered as the day American industry was reborn, the day America’s destiny was reclaimed, and the day that we began to make America wealthy again,” Trump exulted in his Rose Garden1 speech announcing the change. “Our country and its taxpayers have been ripped off for more than fifty years, but it is not going to happen anymore.”
Markets had been bracing for some major tariff action, but what the president actually rolled out—massive, economy-stifling tariffs on nearly every country in the world, with rates calculated according to an almost unfathomably clownish baby’s-first-stats-class formula—went beyond anyone’s wildest imaginings. “The market reaction after hours, I’ve never seen anything like it,” a shell-shocked Jon Fortt said on CNBC immediately after Trump wrapped up. “This—I think, fair to say—is worse than the worst-case scenario of the tariffs that many in the market expected the president to impose.”
You probably remember what happened next. Trump held firm for about a week, as markets crashed around his ears and investors fled the U.S. bond market. Then, abruptly, he gave in to gravity: He postponed implementation of most of the global tariffs, then spent much of the next year hashing out individual deals with various countries. His partial retreat let the economy return from its cardiac event: from then on, tariff damage would accrue to it gradually, rather than all at once.
This was the moment that the world learned the lesson that Trump would, in the final and bitterest moment, respond to normal economic stimuli. Until the fallout from Liberation Day, Trump’s momentum had seemed unstoppable: You can just do things was the MAGA credo on which the country was suddenly running, and nowhere was his determination greater than in the realm of tariffs. And yet, faced with the prospect of inevitable economic calamity, he had blinked. The lesson seemed clear: If markets get spooked enough, Trump will see reason. And this in turn meant that if any individual trader held their holdings while others were panic selling amid a nightmare Trump policy swerve, they’d stand to benefit when Trump abruptly chickened out. Overnight, the TACO trade was born.
We’ve been living in the time of TACO ever since. But there’s a contradiction at the heart of this model that rendered it fundamentally unstable over time, and I wonder whether we’re now reaching the end of this second era of Trump II.
The only thing that seems to get through to Trump is catastrophic market movements—but those market movements are not only reacting to Trump, but trying to predict him, too. The more the TACO trade philosophy permeates through the markets, the less the markets respond to Trump’s rash impulses and grandiloquent proclamations—because they expect him to reverse course once the damage becomes obvious. But that very confidence means Trump’s moves aren’t causing markets to swoon like they once did, which in turn means Trump isn’t getting the better-act-now stimuli that might cause him to reverse course.
What does this vicious cycle look like in practice? It looks like the world we’re living in now, where Trump has risked a global depression by precipitating Iran’s blockade of the Strait of Hormuz—and has now apparently deluded himself into thinking America can actually get on just fine without solving that problem. And why not? Sure, oil prices have risen and the stock market has taken a bit of a hit. But neither market has gone truly berserk yet—in part because they’re expecting Trump to change course. But he has convinced himself he has little incentive to change course, since they haven’t yet gone berserk!
So far, it appears Trump sees his strait problem as primarily a political one, which can be solved by simply finding the right people to blame. He does not see the economic calamity bearing down on us, because the markets—in their quest to find the optimal way of dealing with Trump—have inadvertently taken away the one signal that can get through to him. Liberation Day wasn’t just the economic catastrophe that set the tone for the 2025 economy. By introducing us to the TACO model, it sowed the seeds of our present catastrophe, too.
AROUND THE BULWARK
Zelensky’s Kickass Two Weeks… CATHY YOUNG shares his broader achievement (so far).
Reporters Now Need Escorts to Do Their Jobs at the Pentagon… On The Illegal News, ELLIOT WILLIAMS joins SARAH LONGWELL to explain a series of legal fights that go to the core of how the country operates.
Court Orders Trump to Stop Construction on His Beloved Ballroom… SAM STEIN and WILL SALETAN take on a judge’s decision to halt Donald Trump’s plan to build a massive White House ballroom on Bulwark Takes.
It Is Time to Scream and Yell… JON LOVETT joins TIM MILLER on the flagship pod to explain why this is the moment for Democrats to show what a real opposition is—especially when warmonger Lindsey Graham runs off to play at Disney World.
Command Post Live! Mark Hertling and Ben Parker are going live at 11 a.m. EDT today on Substack and YouTube to discuss Trump’s speech tonight, the prospect of ground troops in Iran, and Trump’s slow-motion destruction of NATO (about which, more below).
We’ll also have a Bulwark crew reacting live to Trump’s address tonight. Look out for links later in the day. We’ll post the replays of both livestreams on Bulwark Takes for those who can’t join us live.
Quick Hits
BREAKING NATO: President Trump told the Telegraph that he’s considering withdrawing the United States from NATO, saying his decision is “beyond reconsideration.” He told the British newspaper that the United Kingdom doesn’t have a navy—which is false—and said of the most successful alliance in the history of the world: “I was never swayed by Nato. I always knew they were a paper tiger, and Putin knows that too, by the way.”
There is a problem for Trump here, though.
Embedded in the FY 2024 National Defense Authorization Act, which Congress passed and Joe Biden signed into law, is a provision that no president can withdraw from NATO without the approval of the Senate or an act of Congress. That provision may or may not be constitutional—but that’s a question the courts will have to sort out, not Trump. If he wants to know more about the law,2 he can consult one of its co-authors, his national security advisor and secretary of state,3 Marco Rubio.
But Trump has already broken NATO in so many ways. The United States is no longer trusted—and is much less popular—in Europe. Even if the transatlantic alliance can be repaired, it will never approach what it was before Trump’s second term. Trump’s military threats against Canada and Denmark were clear, specific, and obvious violations of the North Atlantic Treaty. Even if he decides not to invite the legal headache of formally withdrawing from the treaty, it hardly matters. The damage is done.
—Benjamin Parker
WHATEVER WE EXPECTED, IT WASN’T THAT: Tabloid family drama has surrounded outgoing Homeland Security Secretary Kristi Noem for years, mostly due to her she-denies-it-but-come-on relationship with longtime political ally Corey Lewandowski. Yesterday, however, brought startling headlines not about Lewandowski, but about Noem’s longsuffering husband Bryon—who, the Daily Mail reported,4 has a thing for putting balloons under his shirt and chatting online with “bimbofication” fetish models.5
Both Noem and her boss Donald Trump weighed in on the news yesterday, with a spokesperson for Noem telling the New York Post that she was “devastated” and the family was “blindsided.” Trump seemed surprised that Noem confirmed the story: “They confirmed it? Wow, well, I feel badly for the family if that’s the case,” he told reporters. “That’s too bad.”
The timing of this story was bizarre: It leaked on the very last day of Noem’s tenure at DHS. Did the Daily Mail sit on it until it was less likely to hurt the administration? Did a Noem enemy at DHS want to take a parting shot on her way out the door? Or is Lewandowski just tired of being the side piece and trying to figure out a path toward a more permanent arrangement? And perhaps most importantly: Now that “bimbofication” has joined “felching” in the dubious category of “fetish terms Trump cabinet officials have compelled us to learn,” will there be others to follow?
ANYTHING BUT THE BALLROOM: Legal losses have been piling up for the president lately, including the Supreme Court’s demolition of his “Liberation Day” tariffs and a California judge’s decision to grant the AI company Anthropic a temporary restraining order against the administration’s attempt to bar the company from all government-adjacent work. But yesterday, a federal judge dealt Trump perhaps the most grievous blow of all: a bar on further construction of the president’s lusted-after White House ballroom. “Unless and until Congress blesses this project through statutory authorization,” Judge Richard Leon wrote, “construction has to stop!”
It is no exaggeration to say that ballroom construction has been one of the top priorities of Trump’s second term. Even amid all the other upheavals occupying his attention—trade wars, actual wars, deportations, occupations of cities, extortions of companies, retributions against enemies—Trump has routinely made time to micromanage the details of its construction. On Sunday, while taking questions about Iran aboard Air Force One, Trump was suddenly brandishing a posterboard rendering of the ballroom: “I’m so busy that I don’t have time for this,” he said. “I’m fighting wars and other things, but this is very important, because this is going to be with us for a long time.” Prior to the ruling, he’d posted about the ballroom a total of 23 times on Truth Social and mentioned it more than 50 times at various press gaggles and media events.
The White House is appealing Leon’s decision, and the president is behaving predictably, railing against the National Trust for Historic Preservation—“a Radical Left Group of Lunatics”—which brought the suit after Trump demolished the White House East Wing to make way for the ballroom. Meanwhile, Trump is also testing out interesting new strategies to try to stanch the legal bleeding: He suggested yesterday that he plans to attend the Supreme Court’s oral arguments next week as the Court takes up his unconstitutional attempt to end birthright citizenship via executive order.
Cheap Shots
Remember the Rose Garden?
Ha!
And archivist of the United States.
Journalistic ethics compel us to link, but you are under no obligation to click.
Let he who has never paid five figures to online fetish porn performers throw the first stone.
> "... Elon Musk’s posse of tweaky manlets ..."
Jane Austen? Mark Twain? Oscare Wilde? Voltaire? Eat your hearts out!
Egger is our moment's witty wordsmith.
“BREAKING NATO: President Trump told the Telegraph that he’s considering withdrawing the United States from NATO, saying his decision is “beyond reconsideration.” He told the British newspaper that the United Kingdom doesn’t have a navy—which is false—and said of the most successful alliance in the history of the world: “I was never swayed by Nato. I always knew they were a paper tiger, and Putin knows that too, by the way.””
This is what winning looks like of your goals are to destroy the current rule based world order. This is Chaos theory in its essence. Put a reckless and impulsive lunatic in charge. Fill his administration with the cosplay cabinet from hell, and destroy every treaty, and ally relationship which has kept this nation safe, and the richest in the modern world.
Additionally, he’s doing this while actively destroying our government from within: Destroyed the rule of law. Consolidation of key industries; media, social media, energy, banking, etc…
Trump and his cosplay cabinet from hell are just the bright, shiny objects; the real damage is being conducted far from prying eyes. And as for Trump’s Machiavellian Svengali’s—this is exactly what winning looks like if your goals is to destroy our position as the reserve currency of the world; creating a digital currency so a few can’t control the rest of us: Three Spheres of Influence! IMHO…:)