Yesterday Trump Learned That Capital Is in Charge
After stock markets plummeted in response to Donald Trump’s announcement of widespread tariffs, he suddenly announced a 90-day pause on the new policy. Capital will resist any measure that threatens profits — and that’s just what happened yesterday.
President Donald Trump answers a reporter’s question during a meeting in the Oval Office of the White House on April 7, 2025, in Washington, DC. (Kevin Dietsch / Getty Images)
On April 2, Donald Trump declared “Liberation Day,” marking the beginning of a new tariff regime that he promised would transform the American economy and its place in the world. Liberation appears to have been short-lived — as of April 9, Trump has announced a ninety-day pause on the tariff policies enacted with such fanfare the week prior, after billionaires, CEOs, and financial markets delivered a clear message: these tariffs threaten profits, and that’s unacceptable.
Trump’s initial tariffs stunned global markets with their unexpected severity. Investment firms holding trillions in multinational corporate stocks watched their portfolios hemorrhage value overnight. Stock markets plummeted, with the Dow dropping over 1,300 points and the S&P 500 entering bear market territory. More than $270 billion was wiped from the net worths of the world’s billionaires in a single day, with Trump’s top ten billionaire donors alone losing over $10 billion on Thursday. By Monday, JPMorgan Chase raised its odds of a recession from 40 percent to 60 percent.
Financial elites were in open rebellion. JPMorgan Chase CEO Jamie Dimon, who in January had urged people to “get over” Trump’s tariff policies, reversed course, warning in his annual shareholder letter that the tariffs would “slow down growth.” BlackRock CEO Larry Fink claimed that “most CEOs I talk to say we’re in a recession right now.” Even Elon Musk, one of Trump’s most prominent supporters and advisors, shared anti-tariff content and reportedly lobbied Trump directly to abandon the policy. As Trump described it, “People were jumping a little bit out of line. They were getting yippy . . . a little bit afraid.”
The chorus of yips grew by the hour. Bill Ackman, another billionaire Trump backer, took to social media to warn that the tariffs risked plunging America into “a self-induced, economic nuclear winter.” Citadel founder Ken Griffin called the tariffs a “huge policy mistake” and urged audience members at an event to lobby against them. Ken Fisher, chairman of Fisher Investments, attacked Trump’s tariffs as “stupid, wrong, arrogantly extreme” and “ignorant trade-wise.”
Richard Branson, the billionaire cofounder of Virgin Group, called on the administration to “own up to a colossal mistake and change course.” Home Depot cofounder Ken Langone complained about the tariffs, saying with exasperation, “I don’t understand the goddamn formula.” Conservative billionaires Charles Koch and Leonard Leo filed a lawsuit challenging Trump’s authority to impose tariffs on China.
Behind the public pronouncements were a flurry of phone calls to the White House, all communicating the same message: back down, or else. By Wednesday, Trump did just that, announcing a ninety-day pause on reciprocal tariffs for most countries (though notably not for China).
If Trump had ever accidentally stumbled into a Marxist reading group, capital’s swift and radical censure would perhaps have come as no surprise. If a measure endangers profits, it faces powerful resistance from capital, and because capital has the ability to withdraw investment and impose destabilizing economic consequences of its own, it cannot be ignored.
Trump, the billionaire president with a cabinet full of fellow oligarchs, received a crash course in who really holds the levers of power, the one group he can’t afford to antagonize: his own class.
Discipline and Punish
In his essay “The Market as Prison,” Charles E. Lindblom describes capitalism as a “fiendishly clever” system rigged with an “automatic punishing recoil” where the “punishment follows from the very act intended to change the system.”
Any credible challenge to capitalist profits automatically triggers a cascade of disinvestment that wrecks the economy. When businesses collectively decide to halt or reduce investments, unemployment rises, credit freezes, consumption drops, tax revenues decline, and everything goes to hell. This “automatic punishing recoil” is part of what makes capitalism so durable despite its many glaring shortcomings.
When this kind of punishment occurs — as it has throughout recent history, from France to Greece to Chile — it’s called a capital strike. But capital strikes don’t have to actually occur to be effective. Even the threat of them, explicit or merely implicit, compels elected officials to take the mood of the capitalist class seriously and preemptively bend to their wishes.
Without intending any assault on capitalism itself, Trump’s economic nationalism has inadvertently landed him in a role normally reserved for the Left: restraining capital’s freedom of movement. It’s an unusual spectacle but not unexplainable. Capital is nonpartisan; its only allegiance is to the bottom line. And Trump’s tariffs, by disrupting established global supply chains, raising input costs, and risking retaliatory measures from trading partners, threatened the bottom line.
Could Trump have withstood this assault from capital? Maybe if he had an organized labor movement at his back and a suite of capital controls to limit capitalists’ ability to pull their investments. So despite all his bluster, despite believing that “‘tariffs’ is the most beautiful word to me in the dictionary,” despite his own billions in wealth, Trump found himself in the position that left governments throughout history have found themselves in: forced to cave to the whims of the market.