If you’re anything like me, you’ve watched what little you have invested in the stock market shrink dramatically over the past week. Turmoil has rocked U.S. markets as President Trump rolled out a sweeping set of tariffs — most notably the “Liberation Day” tariffs announced on April 2. The result? A massive equity selloff, trillions in market value wiped out in days and the U.S. entering bear market territory for the first time since 2022.
In conversations with friends and in class discussions, it seems everyone has something to say about the tariffs — and none of it is good. Whether it’s frustration over falling stock prices, anxiety about a potential recession, or the breakdown of global relationships, the general belief around campus is that Trump’s tariff policy is reckless and harmful.
With so much criticism flying around, I couldn’t help but wonder: why would the administration double down on tariffs — and in such a bold, all-out fashion?
So, just playing devil’s advocate here, maybe there’s more to it than we think.
Let’s start with the debt. Tariffs are essentially a tax on imports and they generate billions in federal revenue — without raising income taxes. This is appealing at a time when the U.S. is staring down a $36 trillion debt mountain.
But it’s not just about revenue. About one-third of U.S. marketable debt will mature within the next year and will need to be refinanced. If interest rates fall, the government could save hundreds of billions in interest payments.
This is where tariffs come in. In response to the policy announcements, U.S. Treasury yields have dropped as investors flee equities and hide in the safety of government bonds. That demand pushes bond prices up and yields down, making it cheaper for the government to borrow money. In other words, a market downturn might actually give the government the breathing room it needs to refinance debt at lower rates, potentially saving trillions and reinforcing confidence in U.S. assets. At the same time, the Federal Reserve might feel more comfortable cutting short-term interest rates, further easing borrowing costs. It’s a risky play — but arguably a strategic one.
Another explanation for the aggressive approach is Trump’s push to revitalize U.S. manufacturing. According to Oxford Economics, tariffs raise the cost of foreign goods, making domestic products more competitive and nudging consumers toward U.S.-made options. But companies won’t relocate unless they believe the tariffs are here to stay. Acting early and forcefully might be the only way to compel them — especially if they expect the next administration could reverse course.
There’s also a national security angle, particularly when considering China. Covid-19 exposed how vulnerable our global supply chains are, and in the event of a major conflict or catastrophe, relying on foreign suppliers could have serious consequences. The new policy also directly targets Chinese chemical firms tied to the export of fentanyl precursors — the ingredients fueling a drug crisis that’s devastated communities across America. In a situation where diplomacy has fallen short, tariffs serve as a tool to apply pressure.
Finally, there’s the trade fairness argument. The United States operates at a $1.2 trillion trade deficit. Many countries impose tariffs or regulations that make it hard for U.S. businesses to compete abroad, such as India's 100% tariff on U.S. agricultural products. Trump’s tariffs are being pitched as a way to level the playing field, pressure trade partners to negotiate, and secure fairer treatment for U.S. exports. According to Treasury Secretary Scott Bessent, 70 countries have contacted the White House to begin talks since the implementation of the “Liberation Day” tariffs.
Now, all of that might sound reasonable in theory, but here at Middlebury, it just feels like pain.
Students and faculty here are deeply connected to the global economy. We study abroad, rely on imported goods and pursue careers in fields that depend on open markets. Tariffs seem like a step backward, and they’re hitting our portfolios hard.
But here’s the thing: most Americans have minimal involvement in the stock market — the wealthiest 10% of households own approximately 93% of its value. So while some of us might feel the sting, many Americans haven’t been directly affected, at least not yet.
Ultimately, whether Trump’s tariff push is a master plan to tame the debt, reignite American industry, protect the homeland, or upend the global trade order, one thing’s clear — it’s a high-stakes gamble with uncertain intentions and unpredictable consequences.
Will it work? Honestly, who knows. There are plenty of downsides and reasons to be hesitant, but bold policies often have effects we don’t immediately see — especially from where we sit at Middlebury. Since Middlebury students are so exposed to the downsides of tariffs through market losses and global tension, it’s easy to miss any potential upside. I believe that at a minimum, it is important for our community to understand both sides of this tariff debate.
