By the author of Household Preparedness Training: Domestic Protocols For Crises And Emergencies
Even though it’s in no small measure another Manufactured Distraction Of The Moment, Trump’s ‘tarifazo’ will bring real consequences and impact everyone, everywhere, for months and years to come.
How do I know?
Because ‘history’, and because I’ve lived through something similar during part of my life, as explained in the preface of my last book and a host of posts here on The O.P.
Granted, this is a different world from that of the 1970s and 80s (and even more so from that of the 1930s). However, the dynamics of crises remain unchanged.
Everything is attached to the economy, and today, it runs on globalized trading more than ever. The majority of products we consume daily are “global” in one way or another.
That arrangement is about to face profound changes and suffer large shocks, bringing instability to levels not seen during the last three or four decades.
Markets already provided a glimpse: shortly after the announcement, the DOW crashed more than 1,500 points, the S&P dropped 4%, and the NASDAQ dropped another 5%. Trillions vanished in a matter of hours. The Russell 2000 index dropped 20%, indicating a recession on the horizon.
At the moment, those are just numbers on a screen.
However, once they materialize in the real world, the industry and commerce, the market, the government, and the population will start feeling the impact. And it will be painful.
Stagflation, poverty, layoffs and rising unemployment, austerity, even larger wealth gaps, and everything that comes with that—social unrest (riots, violence, crime, strikes), shortages and disruptions, possibly market crashes and bank runs.
In short, this is a very 1980s-like scenario.
That’s what I’ve been warning about and preparing for. I’m not here to over-analyze Trump’s plans or judge their merits but to offer a perspective and some advice to those trying to navigate this crisis based on what millions in my country and others experienced, so here are my initial thoughts.
Liberation Day isn’t about improving fiscal status, restoring trading balance, and bringing back industries to the U.S.
Tariffs and deals are deliberately studied, negotiated between nations, and implemented in phases to avoid significant disruptions and panic.
That’s how these things run during normal times, but these are not normal times. And even though we cannot see the bigger picture yet (perhaps ever), from a distance, it feels as if the tariff deal was purposely crafted to cause the opposite effect, which it did.
Be that as it may, Trump and his administration have been hinting at this since before the election, so it shouldn’t be a surprise to anyone paying attention. The world won’t end, but it certainly won’t return to how it was before the 1990s.
Globalization is in reverse.
Let’s be honest: does anyone think Americans will work 10-hour shifts at a U.S. Nike or Apple factory for $5 an hour? Or Canadians, or even Mexicans? That’s what Chinese and Vietnamese workers do.
The truth is that the re-industrialization of the U.S. has other obstacles against which tariffs and protectionism are ineffective and could, in fact, turn the problem much worse as it did in my country for decades before it opened to the world in 1991 (more on that in a moment).
Globalization will be replaced by something different, something new. I have no idea what, and as interesting and exciting as this topic may be (it is), I’m more interested in staying prepared for whatever happens until we get there.
Tariffs are not the disease but a symptom.
The current economic, financial, and geopolitical systems are broken and in dire need of an overhaul. Some may call it a reset, but whatever: there’s no way to make an omelet without breaking the eggs.
However that happens, it will cause turmoil and disruptions and require a good dose of austerity from governments, institutions, corporations, and, of course, populations everywhere. At this point, pain is inevitable.
Expect some accommodation as the panic subsides, maybe even significant bounces.
That may cause excitation and bring back optimism. Beware, and stay alert. Even if Trump does a 180 on the tariff deal and tones down his bellicose rhetoric and oddly expansionist politics—which is highly unlikely, realistically —things will remain unstable and volatile worldwide for the next months and probably years.
Big Stick diplomacy and protectionism are back.
Trump’s heavy-handed, arm-twisting treatment of old-time allies and trading partners such as Canada, Japan, and Europe could mean the end of the Pax Americana period (or the beginning of the end), upsetting and altering the geopolitical landscape.
This will cause trade and exchange wars, reshape alliances, and incentivize the formation of new blocks, including military ones: the post-WW2 order will change, and the re-militarization of Europe is certain. In fact, it’s underway. That may not bring immediate consequences, but will impact conflicts in the future.
Protectionism is bad; don’t believe anyone who says otherwise.
As I mentioned in a recent post recounting Brazil’s 1990 Confiscation, President Collor’s biggest achievement was opening the country to the global market. Up to that point, importing was incredibly bureaucratic and expensive for companies and businesses, and outright prohibited for citizens in general.
Consumers had limited choices; a lot of stuff wasn’t even available to us. Shortages were commonplace. Things weren’t as bad as in the USSR and other communist countries, but also far from the reality of free markets such as the U.S., Canada, Japan, and most of Europe.
But perhaps worse is the fact that rather than strengthen and develop the national industry, protectionism turned it obsolete, archaic, unproductive, and accommodated. Even now, 30 or 40 years later, productivity is low, and many sectors are still trying to catch up to global competitors.
That’s what happens when tariff wars and trading protectionism kick in and globalization gets reversed.
Rising inflation, potential shortages, trading imbalances, and fiscal issues
Everybody will be affected, including the U.S.
We should prepare for that, but in this environment, navigating inflation and deflation becomes a tricky proposition: some things will rise, others will fall. The market will become a roller coaster, but assets can also oscillate, with rare exceptions.
It was like that in my country and many others (Argentina, the U.K., etc.) until the mid-1990s, and it takes a rather clear and calm mind to make sound financial decisions in such a volatile environment.
A different mentality and mindset are required because some moments and events will demand quick thinking and fast action, while others require restraint and patience.
Storms like these aren’t for the weak.
Here are some things to remember in the months ahead.
– Financial preparedness is critical. Myself and others keep repeating that for a reason. During a round table with European preppers late last year, I mentioned that I’m still doing my street survival training, though not as much because I feel that dedicating myself to finance and preparing my household for a prolonged crisis is now more urgent.
– Adaptation beats preparation. Selco addresses this in his latest post about the fluidity of SHTF. There’s no way to tell how long a crisis will last, or how severe it will be, so being flexible and adaptable is more important than having a massive stockpile of everything.
– Another critical skill for surviving economic crises is the capacity to tell signal from noise, the ability to sift through the multitude of information and data coming our way all the time. Choose your sources wisely, but maintain critical thinking at all times. Remember, the media has a history of being far less than honest and unbiased.
– Those who panic invariably lose money (and sanity). We’re entering a period in which keeping an eye always on the ball is vital (to use a sport’s axiom). However, being patient, observant, and cold is equally important.
– I’m not an economic advisor, so I’ll just mention my strategy: I strive to keep some dry powder, just in case. Cash can be used to avoid panic, to stay afloat and pay the bills in an emergency, or to provide some peace of mind and comfort during certain events. But it also works to seize opportunities, and these abound during moments like these.
Final words
Trump’s tariff storm might usher the world into an era of fast and profound changes that will impact everyone.
Coincidentally or not, I discuss precisely this type of scenario and how to prepare for times of crisis in my latest book, Household Preparedness Training (now available in hard copy, audiobook, and e-book formats).
Events and periods like these have happened in my country and throughout history. The world isn’t ending, but volatility will go up a few notches, and it will be hard in times ahead.
I wrote this post on short notice, but will keep following events closely in the next few weeks, also revisiting my memories and notes to come up with more information and useful tips and ideas in a future post.
Stay strong, focused, flexible and positive.
What are your thoughts?
Do you think that the new tariffs will cause major changes? Do you think they’re a bad idea? Do you think they’ll be good changes in the long run? How are you preparing for this?
Let’s discuss it in the comments section.
About Fabian
Fabian Ommar is a 50-year-old middle-class worker living in São Paulo, Brazil. Far from being the super-tactical or highly trained military survivor type, he is the average joe who since his youth has been involved with self-reliance and outdoor activities and the practical side of balancing life between a big city and rural/wilderness settings. Since the 2008 world economic crisis, he has been training and helping others in his area to become better prepared for the “constant, slow-burning SHTF” of living in a 3rd world country.
Fabian’s ebook, Street Survivalism: A Practical Training Guide To Life In The City , is a practical training method for common city dwellers based on the lifestyle of the homeless (real-life survivors) to be more psychologically, mentally, and physically prepared to deal with the harsh reality of the streets during normal or difficult times. He’s also the author of The Ultimate Survival Gear Handbook.
You can follow Fabian on Instagram @stoicsurvivor
13 Responses
The tariffs are two-fold. First, at some point we have to draw a line and stop letting countries put tariffs on the U.S, that are 5 to 10 times igher than the tariffs we put on them; which has all been done by politician on both sides of the aisle for decades (two put money in their own pockets). Trump is forcing reciprocity, which should have been how it was always done.
Second, Trump has demonstrated, to use his words (regarding the Ukraine) that the U.S. “holds the cards.” That is, we have shown Mexico, China, Canada, Europe, etc. that the U.S. controls the economy, we can collapse the world economy, or we can allow everyone an equal share of success. This is why now behind the scenes countries are lining up to make the deal. Trump may have written “The Art of the Deal” but he’s using “THe Art of War.”
Well I WAS planning a trip outside the USA this year but I believe I better stay close to home, and just visit my kids and grandkids. I was also going to buy a new car but I am actually going to fix my vehicle before parts become higher. My garden has become a chore and I need to change my mindset on this. I have enough land to do this and my neighbor goes to food pantry weekly and brings me fresh veggies and fruits which I freeze.
They are already firing people at my job so that they don’t have to pay unemployment so I’m preparing for that eventually. In the meantime, I’m working overtime and using up all my PTO on mini vacations to see my kids.
We all knew this was coming, and there’s no reason to panic. I say this out loud as I’m searching for mental health assistance through my company’s EAP, before my company fires me.
I know we cannot see the forest from the trees right now, with these tariffs, but as Fabian mentioned, we have to keep our eye on the ball.
China thinks it has been attacked, and retaliated. In fact, this can be very good for China because they have stopped buying US treasuries because the sacking of US industries has severely threatened the value of those holdings. China’s wisest response is to help reduce the trade imbalance by buying things from American manufacturers. They also created an electric car that could be sold in America for $15k–if no barriers. That is lower than new cars have been in a long time. America could not produce that car as cheaply, but it is developed. If China builds a factory in the US, it would give us jobs and once plans were firmly in place, Trump would lower those tariffs.
Badlands ran an article explaining the theory of rebalancing trade through tariffs. Nations have many ways of preying on other nations, hollowing out the victim’s industries than tariffs. Restrictive laws, currency misvaluations, etc. So this system ignores the other tariffs and just looks at the resulting trade deficit.
Also the income tax cannot really be reconciled with the Constitution nor America’s torch for freedom. We need SOME government, and it does have to be paid somehow. Tariffs were part of the system that made America the greatest nation on Earth.
Saying we need SOME government is like saying we need SOME cancer. Cut it all out. Let freedom ring.
Good article Fabian, with some common sense advice. As I like to say to people in my sphere of influence, and as you stated, there is no substitute for experience. Financial preparedness and awareness seems to be a problem for many people I’ve seen, and often it is as simple as trying to find ways to do something themselves to save a little money. Over the years, there’s been a lot of great articles and postings on the OP site addressing things like that as well as how to be more self-sufficient. The article you referenced describing chip re-industrialization has some interesting information, but it doesn’t address a key element – the fact that the US has been ‘eating its seed corn’ for decades. I’ve worked in Aerospace and Defense my entire adult career, nearly a half century, including 4 of the current top 10 A&D companies. For decades I have seen highly experienced and talented people let go for no reason other than to save money because they command a high salary, without even allowing mentoring or sharing their knowledge before their departure. I know many people with decades of relevant chip design & manufacturing experience who also see the big picture who have been proactively (and unsuccessfully) trying to get rehired into the industry to help jump start the training of junior level people. No one wants them. It would seem the focus has been largely on lower wage talent, including foreign individuals. This is the same thing that has gone on for decades in the software industry. The claims of a STEM talent shortage in the US are false. It is an intentionally manipulated situation. I’ve lived it, and I’ve spent decades writing letters, contacting politicians in DC, and spreading awareness……all falling on deaf ears. I even started several tech companies with my own money, just to help address this and retain at least some talent that would otherwise evaporate. There’s a reason large number of lawyers go into politics, and its not because of their critical thinking or problem solving skills. If you want the best and the brightest who also have hands on experience, you have to be willing to pay for it. There is a large talent pool available who are in fact willing and able to help jump start the chip re-industrialization, but those in a position to make decisions to address this don’t seem to care, or they have a different agenda. Just my .02 cents.
Thanks for sharing your experiences and thoughts. I understand your perspective from you experiences, however I believe (and hope) you got it wrong on a few things. The largest economy in the world will fair better than others as they have experienced things. We will have bumps, big ones, some pain, but it will be overcome and make the US a stronger nation if e bring back some of the critical manufacturing. I’ve been many continents with a manufacturing background and other things, it was a mistake to dismantle US manufacturers across the board for cheap stuff and cheap labor. I believe some will return and make the US stronger.
As you mention, a phased approach would be the normal situation. Although not in the U.S. I see problems created by this for the U.S. as well as my home country. It’s all well and good to talk about bringing back manufacturing, and punishing countries that have taken advantage of the U.S., but the truth is that manufacturing isn’t something that you can bring back overnight. Those factories that we used to have, have been dormant for 30 or 40 years. To build new factories, to supply what we now get from other countries will take as much as a decade. To build them we will need steel and other building products – which we no longer produce in sufficient quantities. Companies can promise to bring back manufacturing, and build new factories, but even if they start today, they are years away from actually producing anything. When we started off-shoring products, and allowed our factories to be closed 40 years ago, we began this inexorable path to where we are now – and you can’t just flip a switch and turn it all back on.
What I see in the near (and not so near) future is not pleasant. As you mention, prices on many items will spike. Many items will become unavailable, or will be in short supply. Inflation will once again start to spike – and not like it has recently – probably moving into the double, if not triple, digits on an annual basis. Unemployment, which is already high if you look at the real numbers, will become a major issue as U.S. companies go broke – either because they can no longer import their products, or because those manufacturers we have can’t export their products. This is a good way for the U.S. dollar to lose it’s position as the world’s reserve currency – a position that has allowed the U.S. to export much of it’s inflation and devaluation of the dollar. And China holds a huge amount of U.S. debt, which if they call in, will crash the economy.
Maybe in ten years things will sort themselves out, but unless Trump reverses some of this, I don’t think we’ll last ten years. And don’t think that many countries are not looking at this – they know they just have to last four years and Trump is gone.
Numerous other countries have been charging very high tariffs on U.S. products for decades!
Politicians knew this was happening and did nothing.
No wonder we have such a trade deficit and manufacturing has moved out of the U.S. to other countries.
Here is a list of tariff rates by country:
https://passportglobal.com/us-tariff-rates-by-country-2025/
Yep. Trump said he was going to do it. Even prior to the election he said he would do it. Seems only a few believed him. I was one of them. He and other economists are correct. We have been taken advantage of by other countries for far too long. A California wine growers association is lobbying the Trump admin to levy tariffs on Australian wines. They put tariffs on California wines but we do not on their wines. I am all for free and fair trade deals. And it appears many countries are coming to the table, ready to deal. Trump has them in a bind. Who needs access to who’s markets more? Ours or theirs? We also have something some countries need we have. Energy. Even more leverage Trump has on them.
Even prior to “Liberation Day,” several companies have committed real, serious money in the billions of dollars to onshore manufacturing back here in the US. That means construction jobs, factory jobs, administration jobs all here in the US. Will it take time to build all those plants? Of course. But there will be jobs. And all the indirect jobs that will come with it.
There is talk about a recession. There has also been talk of a recession since late 2024. Some economists have said there is going to be a recession but while it may be deep, it will be short lived. Looking at the BLS jobs report, we find the Biden administration propped up the economy with massive, unsustainable spending and expanding the government. Trump put a stop to that spending and expansion. Now, like a drug addict who is cut off, we will have to go through detox. Will there be some pain on the front end? Yes. But we will be much better off on the back end. Some even say US markets will be in a much stronger position. Blackrock’s CEO, Larry Fink thinks we are already in a recession after talking with other CEOs. Over the past year we have seen stores closing, companies going bankrupt. Has nothing to do with tariffs or Trump. Just consumers cutting back spending in a inflationary economy.
Is the stock market going bananas? Of course. That is what they do. What we all need to do is look for the long term. We should revisit this article in a year from now and do a comparison.
Excellent comments as usual, 1StMarine, thanks for the remarks.
While it´s indeed impossible to tell exactly what will happen, and the timing of things as I note in the article, there are times when things crawl and others when they run as bulls, in a stampede. Only because it´s been one way or pace until now it doesn´t mean it´ll remain like that forever, right?
I should´ve made my point clearer, what matters is not much where things are headed, if whatever is being attempted by Trump or whoever will succeed or not, but how volatile everything will become for some time ahead.
People fear uncertainty. If volatility remains much high for long enough, things starts to break and that can have a domino effect. That´s what I´m preparing for, and if nothing happens, all the better I´ll be in en even better condition than now.
I understand that Mr. Ommar isn’t an American, and he doesn’t see it from our perspective. We Americans wanted to separate ourselves from Europe and their politics 249 years ago and I’m very glad we did. My husband and I lived in England for several months in the late 90s. I had always thought of England as a quaint version of America. It isn’t. They don’t think like we do. And the rest of Europe, even less so.
I want Poland to be strong, and Hungary and Italy and so on. They shouldn’t be dependent on the U.S. for their defense or anything else. They sneer and condemn us and laugh at us. Okay, fine. They should survive on their own superiority. No more American dollars or blood defending them. No more trade imbalances.
It’s a shame that Mr. Ommar feels about our President the way he does. I wish him no ill will. But neither do I respect his opinion about America and our need for survival. I suggest that he stop watching whatever the European version of cnn is.
This was poorly worded: “I want Poland to be strong, and Hungary and Italy and so on. They shouldn’t be dependent on the U.S. for their defense or anything else. They sneer and condemn us and laugh at us. Okay, fine. They should survive on their own superiority.” I didn’t mean those 3 countries sneer at us. Actually, I think of them as the good guys. I was specifically thinking of Germany, France, Belgium, etc. But all of them should provide for their own defense. Get us out of NATO.
Perhaps I wasn’t clear, I don’t mean to upset anyone much less take sides just provide a perspective and advice based on my experience on the consequences of some events and policies.
I don’t judge Trump and totally understand his reasoning and stance, he never hid his intentions and ideas and I respect that, especially in today’s world. He’s been complaining of unfair and unbalanced trading between the U.S. and other countries for longer than I can remember, as I said this shouldn’t surprise anyone.
Besides, he’s the one in charge and the only person with enough information and a clear view of the whole situation, we know only a fraction of what there is to know.
But despite all that, there’s no way to avoid or escape the consequences of his actions and decisions, and it doesn’t matter if he’ll succeed or not, the only thing that matters is what will come from that and impact us, and that’s not good.
Other than that, I agree NATO and other countries shouldn’t depend on the U.S., but treating your allies one way or another will have consequences, too, which no country is exempt from. There are different ways to negotiate the exit of blocks, treaties and alliances, each will have an outcome. That’s all.