Seems there is a bit of ruckus on the stock markets of the largest capitalist country in the world, the one with deepest of all capital markets. Donald Trump has decided to lay waste to the globalised, market-based world trading order, and return to the protectionist state of affairs that served the nation so well in the 1930s.

It would be foolish of me to join the army of talented prognosticators predicting a recession, unless it doesn’t happen, and the even braver ones who can see just how much each company’s earnings will be affected by the New World Trading Order, if the earnings indeed are affected. We do know that some enterprises will benefit from a future cowering behind tariff walls and some will be hurt by the increase of prices on the 40 per cent of foreign goods they need to do whatever it is they do.

But there are a few things that even a cautious economist, one who has spent a good many decades leaving explicit forecasts to braver souls, can suggest. The first is that before joining the new recruits to the anti-Trump legions, we admit that he is on to something. The pre-‘Liberation Day’ world trading order was seriously tilted against America, especially since the day in 2001 when Bill Clinton engineered China’s entry into the World Trade Organisation.

Admission to a rules-enforcing international organisation was just what the Communist party needed to raise the country from abject poverty to world economic power. Its leaders sought entry, firm in the belief that rules are for fools. China subsidised its manufacturers with cheap capital and special privileges; helped itself to the intellectual capital lured to China by the hope of access to its huge market – a new generation of useful idiots; manipulated its currency to keep the price of its exports down. This enabled China’s leaders to deploy a cheap and submissive army of workers in the destruction of American firms and lay waste to the communities in which those firms were located. That eventually gave rise to J. D.  Vance’s Hillbilly Elegy, a cry of pain at the consequences of the deindustrialisation of Middle America.

It took Trump to say ‘enough is enough’ to China and to other places such as the EU, with its 20 per cent tariff on American cars, ten times what America charged for cars made in the EU. For that he deserves full marks. The way he has decided to act on his understanding gets somewhat lower grades.

Investors have watched 20 per cent of their portfolios and pension-savings plans wiped out, with only a few sectors, most notably healthcare and retailers of consumer necessities, less hard hit. The hurt has become a new American export to Europe, the UK and elsewhere.

America’s builders are scrambling to raise the price and reduce the size of new homes, already unaffordable to other than high-earners, as the price of lumber, steel and concrete head up. Manufacturers of shoes, toys, apparel who thought they had purchased immunity from Trump tariffs by parking Chinese-made goods in warehouses in Vietnam for relabelling and trans-shipment to America are stunned to find that Trump is hunting those goods down, wherever they are, and hitting them with tariffs, as well he should, since this entire chain was conceived to deceive.

China is now the focus of Trump’s ire for having retaliated against his swingeing tariffs. Xi Jinping is determined not to lose face, and is preparing for a long war – trade war, only, we hope, rather than a diversionary thrust at Taiwan – that might shave as much as 2 percentage points off his target 5 per cent growth rate.

Calm reigns on a group of barren volcanic islands near Antarctica

Anticipation of a recession has caused major revisions in the demand for oil, sending crude oil prices tumbling and making oilmen (that is what they are still called) who followed Trump’s urging to ‘drill, baby, drill’ prepare to idle some drilling rigs absent a turnaround in prices. Farmers, hit by reciprocal tariffs from China, are lining up for subsidies to offset lost sales and price falls in crop prices, and the anticipated increase in the cost of everything from equipment to pesticides and fertilisers. But there is no balm in Cupertino, California, home of Apple, where chief executive and major-Trump contributor Tim Cook is faced with the prospect of flogging $3,500 iPhones when tariffs cut in.

The political effects of the market entering what is called ‘bear territory’ – a 20 per cent fall in prices – are unhappiness by pensioners and savers and, more importantly, what journalist Hunter S. Thompson would have called fear and loathing by big donors and Republican politicians. The big donors knew that Trump planned tariffs, but doubted he would wipe out parts of their portfolios and drive down the value of the companies they lead. Rises in chief executive compensation are often based on the increase in their company’s share price. Republican politicians are faced with irate constituents and, with mid-term elections around the corner – actually 18 months from now – are in what can only be described as a panic. Some want to take back the control of tariffs they once had but shifted to the president in 1977 as part of their flight from political accountability. That group does not have the votes needed to make the change.

But calm reigns on a group of barren volcanic islands near Antarctica. Due to a bit of sloppy staff work by a staff not renowned for its competence, and a president uninterested in harrowing detail, that island has been hit with a 10 per cent tariff. It is inhabited only by penguins, and they remain unflappable.