Yes, Trumps tariffs are worse than expected but should you sell your stocks?

President Trump’s April 2 “Liberation Day” was far worse – more “tariffying” – than what I and most others expected.His subsequent pauses and flip-flops have launched veritable vertigo in stocks and bonds.

So maybe you’re thinking of bailing before yet another shoe drops?Don’t.This dopey tariff-palooza likely ends far better than feared, and trying to sidestep volatility is a losing game.

Let me explain.Yes, Trump’s tariffs are bad — even bigger, broader and more foolishly fashioned than previously touted.Stocks dropped to reflect the negative surprise super fast.

April 9’s partial pause for deal negotiations brought some relief, but unease lingers.That’s because on-and-off, back-and-forth is seriously stupid policy.(Disclosure: I’ve been a Republican since I started studying economics and international trade in college and am a recidivist mega-donor to GOP congressional campaigns.

But I also have to call ’em like I see ’em.)Sustained levies that big and broad would crucify the global economy – and ours, too.Tariffs are bad for broad-based economies. Always! The imposer (actually just a poser) suffers more than the imposed.  Tariffs may protect a struggling industry or three but hurt us overall. Always!  As Frederic Bastiat wrote in 1850, “What is seen and not seen” matters.

In the case of tariffs, the “not seen” includes the hidden costs of a poor optimization of resources that results from top-down, command-and-control economic policy.It gets scattered broadly, invisibly – like a virus.The non-US world – 75% of global GDP – trading amongst themselves can mitigate some of that pain.

We can’t.That’s partly why it hurts them less, and partly why their stocks are beating ours this year.

Moreover, efficiency and comparative advantage always win over time.“Evil” countries deploying currency manipulation, import barriers, subsidies, etc., hurt themselves most and for similar reasons.  They just don’t ...