Trader James Doherty works on the floor of the New York Stock Exchange. (Richard Drew/Associated Press)

Reality is setting in. The irrational exuberance following the election is dimming, as financial reporters note. (“There are signs that the sugar rush of Donald Trump’s victory and global-growth hopes has faded, raising doubts among some investors about whether stocks can stay high. … With the economy near full capacity, even tepid growth could be enough to push up wages and inflation, hurting profits and keeping the Fed on alert to raise rates. Rising rates and weak growth are a terrible combination, so investors should take the warnings seriously, and hope that the signs are wrong.”)

Moreover, President Trump, as he has his entire career, has overpromised and underdelivered. There is no health-care reform or tax reform in sight. He’ll struggle to keep the government open if he insists on including money for the border-wall boondoggle. His agenda is ill-suited to deal with structural, persistent problems that have suppressed growth (e.g., low productivity, a mismatch between worker skills and job openings). Indeed, if he gets his way, he may well have a negative impact on the economy.

Douglas Irwin writes in Foreign Affairs:

Although Trump’s professed goal is to “get a better deal” on trade, his brand of economic nationalism is just one step away from old-fashioned protectionism. The president claimed that “protection will lead to great prosperity and strength.” Yet the opposite is true. An “America first” trade policy would do nothing to create new manufacturing jobs or narrow the trade deficit, the gap between imports and exports. Instead, it risks triggering a global trade war that would prove damaging to all countries. A slide toward protectionism would also undermine the institutions that the United States has long worked to support, such as the World Trade Organization (WTO), which have made meaningful contributions to global peace and prosperity. 

As with North Korea, the danger here is that his big talk will generate an overreaction, which no one wants:

As the Trump administration plots its next move, it should take care to distinguish between what trade policy can achieve and what it cannot, and between changes to current policy that would be constructive and those that would prove counterproductive. It must also recognize that protectionism at home can lead to protectionism abroad. Indeed, perhaps the greatest danger of Trump’s trade policy is that a misstep might do irreparable damage to the open world trading system that the United States had, until now, so assiduously promoted since World War II. That system constrains the policies of the 163 other WTO members, with which the United States trades. If the United States backs away from current trade rules, those countries will feel free to discriminate against the United States, and the system will unravel—doing grave damage not only to the global economy but also to the very Americans Trump claims to represent.

There is also an opportunity cost here. Trade is not the source of our woes and has not caused us to lose “millions of jobs.” It’s actually part of the solution — as are immigration reform, infrastructure investment, funding science and increased choice of postsecondary education options — to jump-starting growth and increasing wages.

If you care about American workers, you should hope Trump’s protectionist efforts are as inept as his health-care initiative. Rather than do counterproductive things (e.g., protectionism, slashing funding for the National Institutes of Health and other research, immigration exclusionism), Trump might ask Gary Cohn, director of the National Economic Council, or Kevin Hassett, Trump’s nominee to chair the Council of Economic Advisers, if free trade, robust legal immigration, infrastructure funding and investment in workers and scientific research would be net positives for the economy. Better yet, ask Apple Chief Executive Tim Cook or General Electric Chief Executive Jeffrey Immelt.