Trump turns his back on the markets. It could break MAGA.

A little sacrifice for the greater good may not be such a bad thing. Trump and his advisers have sketched out an economic vision that could help provide better economic security for the U.S. middle class and lessen the weight of government on the economy. Isn’t that worth a little stock market turmoil, especially when stock indexes remain near all-time highs?

Yes, but only if we get the gain to go with the pain. Trump’s erratic rollout of his tariff policy and his team’s haphazard approach to slashing government have prompted a market selloff and could lead to a recession. That could blow up the bigger political project before it really gets under way. And failure to complete the economic mission could leave Americans worse off.

Trump’s supporters have aligned around a loose set of goals. They include cutting the federal debt to free up capital for more-productive uses; modernizing and shrinking the federal government so that the private sector, rather than public spending, drives growth; and realigning trade relationships to revive U.S. manufacturing and re-empower workers.

And as Trump said both before and after his Nov. 5 win, all of that was meant to play out against a booming stock market, instead of the “Kamala crash" he predicted if the former vice president had won the presidency.

Trump’s imposition of tariffs has sown uncertainty and economic worry. The market’s fall in the past three weeks has erased the Trump bump that started when traders and investors began betting on a Trump victory. As of Thursday’s close, the S&P 500 index fell 10.1% from its most recent peak on Feb. 19 through March 1312, putting it in a correction. The tech-heavy Nasdaq Composite fell 14.2% from its Dec. 16 record of 20,174.

Tariffs on Canada, Mexico, and China could raise core personal- consumption-expenditure inflation by one percentage point and cut growth by a half to one percentage point, J.P. Morgan estimates. Additional tariffs imposed on March 12 on steel and aluminum will add more costs to the economy, as will plans to impose “reciprocal tariffs" on April 2. Those would effectively open negotiations with every other county in the world, making outcomes unpredictable.

Tariffs will raise revenue, but only inefficiently. The U.S. would need to impose 50% tariffs on all imports to raise just 40% of what current income taxes bring in, estimates the Peterson Institute, an economy-focused think tank.

Trump and his advisers have attempted to acknowledge the falling stock market without committing to back off from the policies that triggered it. “Markets are going to go up and they’re going to go down. We have to rebuild our country," Trump said on March 11.

He has spoken of a “transition" period, implying that the turmoil won’t be long-lasting.

Trump’s White House spokespeople say the administration draws a distinction between a weakening of “animal spirits" in the markets and longer-term corporate health. The unemployment rate remains at a low 4.1%.

And yet, there are troubling signs. The NFIB Uncertainty Index, a measure of small-business sentiment, rose to its second-highest level ever in February. A survey of CEOs by the publication Chief Executive found a sharp uptick in corporate concerns. The share of CEOs who expect their revenue to grow fell 30 percentage points from January.

Trump’s own numbers look tough, too. A CNN/SRSS poll released on March 12 found that 52% of Americans have an unfavorable view of Trump, versus 42% in favor. The Department of Government Efficiency’s Elon Musk comes across even worse, with 53% unfavorable versus 35% favorable.

“The problem is less about messaging and more about the policy," writes Dan Clifton of research firm Strategas Securities in a note to clients. Trump’s tariff plans dwarf the measures from his first presidency. His Canada and Mexico tariffs are the equivalent of a 10-point rise in the corporate tax rate, Clifton says.

Trump had mused about lowering the corporate rate during the campaign, but Republican majorities in Congress have slim margins and are having trouble agreeing on a way forward on fiscal matters.

House and Senate Republicans gave up in early March on a monthslong effort to negotiate a new budget, and opted instead to simply extend the current one. Their plan includes a few spending changes but doesn’t attempt to zero out funding for the U.S. Agency for International Development or the Education Department, despite the chain saw that Musk has taken to their workforces, with Trump’s backing.

If there was truly an upswell of support behind DOGE’s cuts, members of Congress would be quick to take credit for them. Instead, many are facing down angry constituents at town hall meetings.

Despite all the noise over DOGE, its cuts don’t appear to have made a dent in the deficit. The Congressional Budget Office report for February found that at $308 billion, the monthly deficit was $11 billion higher than at the same time last year. The federal government is again headed for an annual budget deficit near 7% of gross domestic product.

DOGE’s cuts may also be difficult to make permanent. A federal judge in California on Thursday ordered six federal agencies to reinstate probationary workers who had been fired in recent weeks.

White House advisers such as National Economic Council Director Kevin Hassett profess not to be worried about bumps in the policy process. “For sure there is some uncertainty over exactly how the trade policy will work itself out, but the tax policy is almost sure to work the way people are describing it in the House and Senate bills," Hassett said on CNBC, on March 10.

“The uncertainty is actually creating jobs," Hassett said.

Asked to explain Hassett’s comments, a White House official says the auto industry was driving new manufacturing jobs. “We’ve seen a consistent trend of auto makers reshoring or expanding production in the U.S. in the aftermath of President Trump’s election, often explicitly mentioning his policies as the impetus for doing so," the official says.

Relocating the auto industry in the U.S. could cost $150 billion, Barron’s has estimated.

Meanwhile, tax reform is far from certain. Trump’s team talks of tax cuts, but merely maintaining current tax levels will be a challenge. A full extension of expiring portions of the 2017 Tax Cuts and Jobs Act would cost some $4.6 trillion. Trump has also promised to slash taxes on Social Security income, workers’ tips, overtime, and more. House Republicans’ current plans would add more than $2 trillion to the deficit and don’t detail specific tax changes.

Democrats oppose those tax plans and have declined to support Republicans’ short-term spending plans. A government shutdown is possible.

An early sign of Trump’s political strength will come in April, when Florida will hold elections to fill two House seats that became empty since Trump’s victory. Those would normally be safe GOP seats, but Clifton notes that Republicans nearly lost two special elections for nominally safe seats in similar circumstances after Trump’s 2016 win.

Treasury Secretary Scott Bessent has defended Trump’s tariffs as in service of a greater good. “Access to cheap goods is not the essence of the American dream," he said on March 6, making the point that Americans also want economic security and the chance for upward mobility.

But “trying to achieve this by focusing on manufacturing is a bad bet," writes Douglas Holtz-Eakin, a former economic adviser to President George W. Bush and president of the American Action Forum, a conservative advocacy group.

Manufacturing jobs have fallen from more than a third of the private workforce in the 1950s to less than 10% more recently. That can’t be blamed entirely on China’s predations. The decline of manufacturing “cannot be offset by a simplistic reliance on tariffs," Holtz-Eakin writes.

Steel tariffs, in force as of March 12, pit the many against the few. The steel industry employs just 83,600 people nationwide, according to the Bureau of Labor Standards. But many, if not all, of the 16.3 million cars sold in the U.S. in 2024 had steel in them.

Trying to manage the fallout from a web of policies that affect the entire global economy won’t be easy. It would require a consistency and clarity of purpose that seems to elude the president.

Decent market returns are at the heart of the economic bargain many voters made with Trump, recalling his first-term boom. Trump has put stocks at the center of his appeal, despite the minimal impact that presidents usually have on them. Stock investors have done exceptionally well recently and may forgive some ups and downs.

But if a president who claimed that the “stock market’s continued success is contingent on MAGA winning the next election" continues to turn his back on it, his overall appeal is likely to fade. And if continued market losses come amid escalating trade wars and rising deficits, then a midterm wipeout could be just the beginning of Republicans’ problems.

Trump has given his supporters the sense that they are finally in it together in a struggle against a government that seemed indifferent to their challenges. Policies that undermine that unity risk undoing the entire MAGA movement.