Americans’ retirement funds are swinging like a carnival ride as the markets try to anticipate how President Donald Trump’s tariff moves will affect global trade. His 90-day pause on tariffs has provided some relief as everyone tries to determine the long-term scenario.

As a free-market economist who worked in President Trump’s first administration and reviewed many speeches and policy briefs, I gained firsthand insight into his thinking. I can see both opportunities and risks in the current pause.

One risk—already acknowledged by the president—is that tariffs may cause pain because they upset global supply chains. And the impacts are real. The Atlanta Fed’s GDPNow model estimates that real GDP contracted at a negative 2.4% annualized rate in Q1 2025. This results from a weak economy inherited from President Biden and an unpredictable trade policy. Even the model’s alternative forecast shows little to no economic growth. Those figures will evolve as policies are smoothed out, but for now, they are concerned with economic metrics.

If Trump remains committed to his first-term goal of decoupling from China, he can overcome domestic risks by creating strategic partnerships with countries like Japan, South Korea, and Taiwan. These partnerships will create better supply chains for everything from batteries and semiconductors to basic computer and smartphone components.

Japan is an especially relevant example because of Nippon Steel’s attempt to acquire U.S. Steel. Japan is one of our strongest allies, economically and strategically. Nippon has already committed to maintaining operations in Pittsburgh, investing $15 billion into the proposed purchases, a further $6 billion into American-based operations, and hiring American workers. The national security risk is nonexistent, but the economic risk will be carried worldwide if the deal doesn’t come through. America would signal that the U.S. is closed for business, even for global economic partners.

Trump can also show how his trade policies are about expansion by seizing this moment to renegotiate a modernized Trans-Pacific Partnership (TPP) that addresses opportunities like Nippon-U.S. Steel. There is still an opportunity to remove flaws from the original deal and leverage the deal to strengthen U.S. economic leadership in Asia. A new TPP would help us rally regional allies, reduce reliance on China, and give American producers access to booming markets.

Free trade is a net benefit for both American citizens and our allies. It lowers prices, expands choices, and encourages international cooperation. That’s not just an economic argument—it’s a moral one. As Milton Friedman argued, economic openness is necessary for political freedom and prosperity.

Trump was elected in part for his willingness to challenge the status quo. That’s a good thing, and he has set the stage for possibly building bridges through business deals with companies like Nippon Steel, trade deals like a modern TPP, and ensuring that dictatorships like China know they are welcome when they liberalize their trade practices. 

This 90-day pause was a good use of a “time out.” It should allow everyone to regroup and find the right path to prosperity and freedom, preferably with pro-growth policies of less spending, lower taxes, reduced regulations, and more free trade, which was a goal during Trump’s first term.

Vance Ginn, Ph.D., is president of Ginn Economic Consulting and former chief economist of the first Trump White House’s Office of Management and Budget (June 2019 to May 2020). Follow him on X at @vanceginn.

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