BREAKINGVIEWS-Trump's permanent revolution of chaos carries cost

By Jennifer Saba

NEW YORK, May 23 (Reuters Breakingviews) - President Donald Trump’s disordered agenda is a feature, not a blip. The U.S. leader issued fresh threats to the European Union and Apple AAPL.O via social media on Friday, sending the S&P 500 Index .SPX down. The market may eventually recover. His war with Harvard University, though, is emblematic of the steady erosion of U.S. soft power, and is more damaging.

The former reality TV star escalated his battle with the EU by posting on Truth Social that he plans to slap a 50% tariff on imported European goods beginning on June 1. He blamed a trade deficit “of more than $250,000,000 a year, a number which is totally unacceptable.” Last year, the United States’ deficit with the trading bloc was $236 billion.

In a separate post, Trump berated Apple boss Tim Cook for moving production of iPhones to countries such as India. Trump warned of applying a 25% import duty to the tech giant’s products if they were manufactured anywhere besides the United States. Apple’s shares fell 3% on Friday morning.

The markets were just starting to rebound too, following relief that Trump backed down, at least temporarily, on punishing taxes placed on Chinese imports early in the month. The cycle that played out is a familiar one: The markets freaked out, Trump retreated, the markets rallied and then Trump threatened tariffs again.

The Commander in Chief’s standoff with Harvard represents something more insidious and harder to roll back. On Thursday, the Trump administration revoked Harvard’s ability to enroll international students, and the university sued in response. The number of overseas students in the U.S. has more than doubled in two decades. Harvard represents the ultimate status symbol of Uncle Sam abroad. Approximately 6,800 attendees are international and represent 27% of Harvard’s population.

A judge temporarily blocked the government order, yet any damage to Harvard is part of a broader trend that illustrates the United States’ waning image. International travel is down from the beginning of the year through April compared to the same time period a year ago, according to the International Trade Administration. Moreover, spending by visitors this year is expected to fall $12.5 billion, or 7% this year, to $169 billion per estimates from the World Travel & Tourism Council. That body noted the U.S. is the only country forecast to see declines.

There are other sobering signs. Soft demand for 20-year bonds in a Treasury auction earlier this week may signify fear of eroding trust in the U.S., dysfunctional politics and the danger of expanding budget deficits. Trump’s permanent revolution of chaos comes with a cost.

Follow @jennifersaba on X

CONTEXT NEWS

U.S. President Donald Trump on May 23 threatened on social media to escalate the trade war with the European Union by recommending a 50% tariff on imported European goods beginning June 1. In a separate post, Trump warned Apple he would apply a 25% import duty on iPhones not made in the United States.

A day earlier, the Trump administration revoked Harvard University’s ability to enroll international students. The school brought a lawsuit in response and filed for a restraining order to block the Trump administration from implementing the ban.