As President Donald Trump begins his second term, his bombastic tariff strategy has ignited a firestorm of criticism both domestically and internationally. In a throwaway remark over the weekend, Trump suggested that American children might have to be content with “two dolls instead of 30” this holiday season due to the economic ripple effects of his tariffs. While the comment was likely hyperbole for effect, it has instead served to bring attention to a larger critique: that Trump is saddling working- and middle-class Americans with austerity to fund tax breaks for the wealthy and that he is shaking the foundations of the world economy into the bargain. This is not economic populism Trump campaigned on—it’s an artificial crisis that threatens long-term damage to the United States and its place on the world stage.
The Financial Burden: Families Pay a $3,800 Price
Tariffs initiated by Trump, marketed as a way to shield U.S. industry and recapture supremacy through production, are proving to be a blunt instrument with far-reaching effects. A study by Yale University estimates the economic cost to the average American family at $3,800 annually, and working- and middle-class households will bear the most damage. Prices for everything from foodstuffs to school supplies are rising as tariffs strangle supplies and trigger tit-for-tat retaliation from trade partners.
The effects won’t be confined to the wallets of consumers. Harvard economist Kenneth Rogoff declared that the policy moves by Trump are undermining the status of the U.S. dollar as the world’s reserve currency. “Trump is a catalyst and an accelerant,” Rogoff explained to Axios. “The rest of the world was already looking for greater independence from the dollar, and this gave it a fire.” A weakened dollar would translate to higher borrowing charges, less influence globally, and an entire set of economic issues that would resound far beyond the shores of America.
To the average American, those theoretical risks translate into actual suffering. Already lagging incomes are being eroded further by the price hikes imposed by Trump’s tariffs. Trump’s throwaway reference to “two dolls” struck a nerve, with critics accusing him of being callous and diminishing the daily struggle for families who must make draconian choices between paying rent, getting medical treatment, and necessities. As MSNBC’s host Ali Velshi phrased it on a May 10 episode of his program, “For ordinary American families who fight for every dollar, reducing financial desperation to a question of dolls is, yes, insulting.”
Austerity by Design: A Betrayal of the Base
Velshi’s critique extends further, accusing Trump of “economic gaslighting” for selling austerity as a sacrifice to an ill-defined greater good. Austerity, historically, has been a last-resort policy, only used, for example, during wartime or natural disaster when it’s been necessary to support economies through collective privation. There exists, however, no such emergency now, contends Velshi and other commentators. “It’s not a natural recession, it’s not a war economy,” Velshi has declared. “It’s the product of the economic decisions of one man and his refusal to pivot.”
The statistics paint a sobering picture. Trump’s tariffs have the Peterson Institute for International Economics estimating that they will add 5-10% to consumer prices across certain industries. At the same time, his administration is pushing for trillions in corporate and high-income rate reductions, and for proposed cuts to Medicaid and other social safety net programs. The side-by-side presentation suggests conscious income-redistribution, average Americans footing the bill. As Velshi summarized it, “Trump is asking the American people to prepare for scarcity, to prepare for prices to spike, to prepare for the fact that they won’t be able to afford the life to which they’re accustomed.”
This is far from Trump’s 2016 campaign, when he pledged to elevate the “forgotten man and woman” through economic growth and increased opportunity. Now, his policies are asking them to accept less—less purchasing power, less security, less hope—while shielding the rich. Even conservatives are raising an alarm. In a Wall Street Journal op-ed, conservative commentator Matthew Hennessey wrote, “In Mr. Trump’s America you get two dolls only, you pay more, and be sure to thank the man in the handmade silk tie on your way out.” Hennessey objected to Trump’s austerity credibility, since “his whole life has been a paean to gilded, gaudy excess.”
Global Implications: A Dangerous Game of Economic Brinkmanship
Beyond the borders of America, Trump’s tariffs are reshaping the international economic order that will bedevil U.S. interests for generations to come. By imposing broad-brush tariffs on friends and foes, Trump has opened himself to retaliation by countries like Canada, Mexico, and China, clogging international supply chains and tempting broader trade war. The European Union, for one, is reportedly weighing counter-tariffs on U.S. farm exports, a move that will destroy farmers inside Trump’s political base.
The tariffs also risk alienating valuable allies at a moment when geopolitical tensions are already running hot. China, a common target for Trump’s ire, has indicated that it is open to negotiations but is also ready to strike back if pushed. A recent trade deal freezing escalations between the U.S. and China, which some touted as a diplomatic victory, was characterized by MSNBC’s Nicolle Wallace as a sign that “Trump seems to have blinked first.” This implies Trump’s hard line will never earn him the leverage he desires, and could instead weaken America’s bargaining position when it comes to global trade negotiations.
Furthermore, the impact on the U.S. dollar’s supremacy globally would have significant diplomatic ramifications. As countries like India and China double down on efforts to move beyond dollar-denominated transactions, America risks losing the economic clout that underpins its post-World War II international supremacy. For a site like Diplotic, which is attuned to the interface between economics and diplomacy, this is the greatest fear: Trump’s tariffs are not an economic gesture—they are a high-stakes wager on the United States’s international leadership.
A Manufactured Crisis and an Imperiled Social Contract
Critics argue Trump is staging an economic crisis for the sake of making his own policies legitimate, a strategy which has had precedents through the use of austerity to establish power or to safeguard elites. In comparison to post-9/11 when President George W. Bush rallied Americans to shop to fuel the economy, Trump’s policy is causing the instability he now requests the populace to endure. Trump’s claim tariffs won’t hurt families was referred to as “nuts” by former Rep. Katie Porter during an appearance on MSNBC May 10th, mentioning empty docks and clogged supply chains as evidence the impact is far-reaching.
This manufactured crisis is compounded by Trump’s apparent disdain for the social contract. While he is demanding that ordinary Americans “get by” on less, his administration is attempting to dismantle programs like Medicaid, on which tens of millions rely during times of economic difficulty. As Velshi warned, “Trump is creating a crisis, imposing austerity and then stripping away the machinery that Americans use to weather it.” This move promises to alienate not only his political adversaries but the same working-class voters who elected him to the White House.
The Way Forward: Accountability or Escalation?
As the holiday season approaches, the threat of “two dolls instead of 30” looms as an heart-wrenching symbol for the sacrifice called for from American households. For Trump, the work now is reconciling his populist talk and policy reality. His own constituency, already stretched thin by rising expenses, may be resistant to swallowing austerity for so long—particularly when the reward appears to accrue to the ultrarich. New polling, according to MSNBC, shows rising public skepticism about Trump’s economic policy, and only 38% of Americans now support his tariffs.
For the world at large, the stakes are high too. Trump’s tariffs have injected uncertainty into world markets, strained alliances, and accelerated the movement away from dollar supremacy. Diplomats and policymakers will be navigating this new reality, weighing cooperation with the U.S. against the necessity of safeguarding their own economies.
At its heart, the Trump tariff dispute is less an economic issue and more one of fairness, accountability, and the sort of America we wish to create. As it turned out, as Velshi summarized, “Austerity is for emergencies. This is economic gaslighting.” We will only know later if Trump can make us prosperous, or whether, instead, his actions make us more unequal and split us apart. Until then, we and the world must live through the consequences of a bet that may prove to cost us more than we ever imagined. *This piece is based on coverage of Ali Velshi’s May 10, 2025, show “Velshi” on MSNBC, Axios, the Wall Street Journal, and the Peterson Institute for International Economics.* —
