Portes warns Trump’s economic playbook is fuelled by chaos, not strategy

In a trenchant assessment on Times Radio's The Trump Report with Maddie Hale, London Business School's Professor Richard Portes dismantled the Trump administration’s economic claims, from tariffs to shutdowns to global power plays, arguing that the United States is steering its economy with “no idea what it’s doing” and leaving both Americans and trading partners exposed to needless uncertainty.

Portes’ sharpest warning concerns the six-week government shutdown, which he says has done lasting damage to America’s statistical foundations. With the Bureau of Labor Statistics understaffed and major survey series discontinued, the first missed unemployment report in 77 years marks, in his view, a historic collapse in government data capacity. “The Fed is flying blind,” he said, with policy decisions now made without essential information. The hardest hit, he stresses, are ordinary Americans, especially low-income households who saw food assistance disrupted and daily life upended.

Turning to tariffs, Portes argues the public debate has fundamentally missed the point. The greatest harm, he says, comes not from consumer-price increases but from the dislocation of intermediate-goods supply chains, metals, components, materials, that underpin US manufacturing. Trump’s tariff policy, riddled with exemptions and political favouritism, has in Portes’ view “destroyed” the predictability of global trade and left partners guessing “from one day to the next.” Tariffs, he adds, are simply a tax on US firms and consumers, one that has driven small businesses to the brink.

On affordability, Portes is blunt: claims of a booming, more affordable economy are “obvious nonsense.” Grocery bills, electricity prices, and household essentials have all climbed, and even Trump-aligned lawmakers, he notes, are finally admitting it publicly.

Portes also widened his critique to Russia and China, framing both through the lens of strategic economic pressure. Russia, he argues, is running a “war economy” with nearly 40 per cent of production now defence-related. Sanctions are biting, oil revenues are falling, and tax rises on everyday goods, especially alcohol, are hitting ordinary Russians hardest. The result, he predicts, is a significantly deeper downturn ahead.

China, meanwhile, is accelerating in critical technologies and leveraging its dominance in rare earths. Portes warns that Europe and the UK sit uncomfortably between two giants locked in a contest of industrial strength, innovation and geopolitical leverage.

Across all of this lies a common theme: strategic incoherence. Portes argues the tariff regime is opaque by design, the shutdowns self-inflicted, and the administration’s public economic narratives demonstrably false. The wider multilateral system, he warns, is eroding under the strain, not through an accident of history but through deliberate political choices.

In Portes’ view, the costs of this moment extend far beyond trade numbers or quarterly GDP. They reflect a superpower unmoored from economic discipline, global norms and factual clarity, at a time when economic credibility is itself a form of national security.

To watch the full broadcast, click here: https://www.youtube.com/watch?v=_RNEKWwtgaQ