President Donald Trump's tariffs are creating uncertainty in the markets -- perhaps deliberately so -- and they have also accelerated a confrontation with China. We need to know how this is going to end, or it could end badly.

Trump was on solid ground when he proposed reciprocal tariffs -- i.e. applying the same tariffs to other countries that they apply to us, in an effort to restore truly free trade. But that effort has been complicated by two other factors.

One is that the Trump White House chose to include non-tariff barriers to trade in its calculation of what other countries have been charging the U.S. Fair enough, but the method of calculating those barriers is rather uncertain.

The other is that Trump appears to see a long-term role for tariffs as a way to generate revenue for the federal government, even replacing income taxes. It is hard to imagine that tariffs alone can generate nearly enough revenue.

After the initial turbulence following April 2 -- "Liberation Day" -- the markets stabilized on Tuesday, on news of the European Union seeking a deal with Trump, before sinking against after Trump announced higher tariffs on China (50% more, 104% total!) over its own retaliatory tariffs. How does this end?

In the best-case scenario, Trump's aggressive approach leads to trade deals that reset world trade on terms that are fairer to the United States. In the worst-case scenario, Trump's tariffs trigger a recession, even a depression.

I think that even in the worst-case scenario, the U.S. will come out ahead, after much suffering. The question is whether that pain is really necessary, and necessary now. If so, perhaps better now than later. Still, it is going to hurt.

What we see emerging, so far, is a kind of middle scenario, one in which some countries seek deals with the U.S., and some (China, really) do not. The world will divide into trading blocs. We will suffer, though perhaps in a limited way.

I think the American public would accept that, if people could understand that the pain is temporary and the payoff is big enough to justify it. We don't know that, and the White House is not making the case. At least, not now.

Secretary of the Treasury Scott Bessent has been very good, but economic adviser Peter Navarro has been less effective. I would speculate that prison -- where he was unjustly sent -- had a bad effect on him. But it is what it is.

I'm a free trade guy, by nature. I used to think that protectionist arguments were cheap and, frankly, stupid. I changed my mind when I saw Trump successfully using tariffs as diplomatic weapons in his first term. But this is much bigger.

On the one hand, this is why you need a president who does not have to think about re-election: to do hard stuff. On the other hand, we're all on the hook.

I don't know what to expect, and I suspect that few of the people who say they know -- for better or worse -- actually do, either. That uncertainty is a problem in itself. We need to see some direction, and some boundaries. Soon.