Tariffgate: How Trump’s trade war blew up in his face

The president's calls to buy stocks after the market slumped and his subsequent climbdown over tariffs have led to accusations of insider trading. Together with scandalous economic incompetence, this could be his Watergate, writes Simon Walters

When, in 1974, President Richard Nixon was forced to resign after lying about a break-in involving planting listening devices at his Democrat rivals’ Watergate Hotel HQ during his re-election campaign, it became the biggest scandal in political history. Now, Donald Trump has found himself in the middle of a political storm that could prove as damaging: Tariffgate.

As markets opened on Wednesday, Trump posted on his TruthSocial platform: “THIS IS A GREAT TIME TO BUY!!!” Hours later, he issued an abrupt U-turn on the reciprocal tariffs he announced on his “Liberation Day” at the start of the month, declaring a “90-day pause” on tariffs for all countries except China.

Markets duly surged – as did social media, with accusations that the president’s “art of the deal” was, in fact, a reverse “pump and dump” whereby stock prices were hammered down and then bought before they rose. The Democrats, led by California senator Adam Schiff, are calling for an investigation into insider trading. Even Trump himself seemed muddled over when he decided to make this change, telling reporters in the same sentence that it was “over the last few days” and “fairly early this morning”.

The turmoil caused by his chaotic tariff antics may not lead to his resignation, as Watergate did for Nixon, but the stain on Trump’s personal and political reputation and credibility could be as permanent.

‘After Tariffgate, Trump will never escape the brutal truth that he has been exposed as unfit to run America’s economy’ (AFP via Getty Images)

After Watergate, Nixon could never escape the brutal truth that he was a crook and a liar. After Tariffgate, Trump will never escape the brutal truth that he has been exposed as unfit to run America’s economy – and that when he was found out, he claimed (preposterously) that it was all part of his “strategy”.

However, if claims that some used the wild fluctuation in stock market prices to make a killing turn out to be true, and crucially, that this was directly or indirectly aided and abetted by those in Trump’s White House, it will take more than his usual bluster to shrug it off.

Nixon tried to shift the blame for Watergate, claiming it was all the fault of others. It didn’t work. Time will tell whether Trump tries to blame others for Tariffgate. However, as with Watergate, there can be no denying that only one person was responsible: the US president.

Trump’s humiliating climbdown on tariffs has striking similarities with Liz Truss’s downfall as prime minister.

As in her case, it was the bond market response by hard-headed financiers – who, unlike Truss and Trump, understand economics as opposed to political fantasies – that forced him to confront reality.

Thankfully, Truss was promptly kicked out of Downing Street by her own party. That is not as easy in the US, where the president has far more personal power.

There are two possible explanations for Trump’s Tariffgate: it was reckless incompetence on a scale never seen before in global economics. Or, as Adam Schiff has claimed, it was market manipulation. Maybe it was a combination of both. Anything is possible in Trump’s mad and disturbing world. Either way, it is a scandal that deserves to rank alongside Watergate.