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April 3, 2025
White House Lacks Financial Literacy – ‘Tariffs’ Show

Presidential Message on National Financial Literacy Month, 2025 – The White House, Apr 1 2025

The foundation of American economic prosperity is a society empowered with the knowledge and tools to make informed financial decisions to achieve the American Dream. …

I welcome that message.

Teaching financial literacy must start at the top. The members of the Trump administration obviously lack the knowledge and tools to make informed financial decisions.

It is the only possible explanation for how they came up with these numbers:


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China does not have a 67% tariff on U.S. goods (it's 7.3%). The EU does not have a 39% tariff on U.S. goods (it's 5.2%). The numbers are bollocks.

So where do they come from? The official explanation from the U.S. Trade Representative is here. Its baloney:

James Surowiecki @JamesSurowiecki – 0:22 UTC · Apr 3, 2025

Just figured out where these fake tariff rates come from. They didn't actually calculate tariff rates + non-tariff barriers, as they say they did. Instead, for every country, they just took our trade deficit with that country and divided it by the country's exports to us.

So we have a $17.9 billion trade deficit with Indonesia. Its exports to us are $28 billion. $17.9/$28 = 64%, which Trump claims is the tariff rate Indonesia charges us. What extraordinary nonsense this is.
…
Even given that it's Trump, I cannot believe they said "We'll just divide the trade deficit by imports and tell people that's the tariff rate." And then they decided to set our tariffs by just cutting that totally made-up rate in half! This is so dumb and deceptive.
…
.. it's actually worse than I thought: in calculating the tariff rate, Trump's people only used the trade deficit in goods. So even though we run a trade surplus in services with the world, those exports don't count as far as Trump is concerned.

The last point is a major one, for China, but especially for the EU :

EU-US trade in goods and services reached an impressive €1.6 trillion in 2023. This means that every day, €4.4 billion worth of goods and services cross the Atlantic between the EU and the US.
…
The total bilateral trade in goods reached €851 billion in 2023. The EU exported €503 billion of goods to the US market, while importing €347 billion; this resulted in a goods trade surplus of €157 billion for the EU.

Total bilateral trade in services between the EU and the US was worth €746 billion in 2023. The EU exported €319 billion of services to the US, while importing €427 billion from the US; this resulted in a services trade deficit of €109 billion for the EU.
…
EU-US goods and services trade is balanced: the difference between EU exports to the US and US exports to the EU stood at €48 billion in 2023; the equivalent of just 3% of the total trade between the EU and the US.

Despite that Trump has decreed a 20% on all goods from the EU. The natural countermeasure from the EU will be to put a 20+% tariff on all import of U.S. services.

Trump also decreed a minimum 10% tariff on imports from every country. Products made by the penguins of the uninhabited Heard and McDonald Islands in the Antarctic will now come with a 10% surcharge.


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There is really no economic reasoning behind these numbers.

Arnaud Bertrand @RnaudBertrand – 4:16 AM · Apr 3, 2025

To illustrate just how nonsensically these tariffs were calculated, take the example of Lesotho, one of the poorest countries in Africa with just $2.4 billion in annual GDP, which is being struck with a 50% tariff rate under the Trump plan, the highest rate among all countries on the list.
…
As a matter of fact Lesotho, as a member of the Southern African Customs Union (SACU), applies the common external tariff structure established by this regional trade bloc.
…
So since the tariffs charged by these 5 countries on U.S. products are exactly the same, they must all be struck with a 50% tariff rate by the U.S., right? Not at all: South Africa is getting 30%, Namibia 21%, Botswana 37% and Eswatini just 10%, the lowest rate possible among all countries.

Looking at Lesotho specifically, every year the U.S. imports approximately $236 million in goods from Lesotho (primarily diamonds, textiles and apparel) while exporting only about $7 million worth of goods to Lesotho (https://wits.worldbank.org/CountryProfile/en/Country/LSO/Year/2022/TradeFlow/EXPIMP/Partner/by-country).

Why do they export so little? Again this is an extremely poor country where 56.2% of the population lives with less than $3.65 a day (https://databankfiles.worldbank.org/public/…), i.e. $1,300 a year. They simply can't afford U.S. products, no-one is going to buy an iPhone or a Tesla on that sort of income…

The way the tariffs are ACTUALLY calculated appears to be based on a simplistic and economically senseless formula: you take the trade deficit the U.S. has with a country, divide it by that country's exports to the U.S and declare this – falsely – "the tariff they charge on the U.S."

And then as Trump did in his speech last night, you magnanimously declare that you'll only "reciprocate" by charging half that "tariff" on them.

As such, for Lesotho, the calculation goes like this: ($236M – $7M)/$235M = 97%. That's the "tariff" Lesotho is deemed to charge this U.S. and half of that, i.e. roughly 50% is what the U.S. "reciprocates" with.

It's extremely easy to see why this makes no sense at all.

Lesotho has a comparative advantage over the U.S. as it can dig up and sell diamonds. But it lacks the purchasing power to buy U.S. goods and services. The calculations by the Trump administration ignore those basic facts.

No tariffs were by the way introduced against Belarus, Russia and North Korea. This because of sanction, the U.S. has allegedly no trade relation with them. (Other than buying enriched Uranium for its nuclear power stations?)

Did the Trump administration anticipate how this nonsense will explode in its face?

It is Smoot-Hawley writ large.

Posted by b on April 3, 2025 at 08:53 UTC | Permalink
Comments

I’ll toss in Michael Roberts’ blog
https://thenextrecession.wordpress.com/2025/04/02/liberation-day/
Hadn’t seen this angle previously:

Simon Evenett, professor at the IMD Business School, calculates that, even if the US cut off all goods imports, 70 of its trading partners would fully make up their lost sales to the US within one year, and 115 would do so within five years, assuming they maintained their current export growth rates to other markets. According to the NYU Stern School of Business, full implementation of these tariffs and retaliation by other countries against the US could cut global goods trade volumes by up to 10 per cent versus baseline growth in the long run. But even that downside scenario still implies about 5 per cent more global goods trade in 2029 than in 2024.

Posted by: dadooronron | Apr 3 2025 17:17 utc | 201

Thanks b for the excellent article.
From the link b provided (and given the fact that history rhymes):

End of tariffs
At first, the tariff seemed to be a success. […] However, larger economic problems loomed […] U.S. imports decreased 66% from $4.4 billion (1929) to $1.5 billion (1933), and exports decreased 61% from $5.4 billion to $2.1 billion. GNP fell from $103.1 billion in 1929 to $75.8 billion in 1931 and bottomed out at $55.6 billion in 1933.[23] Imports from Europe decreased from a 1929 high of $1.3 billion to just $390 million during 1932, and U.S. exports to Europe decreased from $2.3 billion in 1929 to $784 million in 1932. Overall, world trade decreased by some 66% between 1929 and 1934.
Unemployment was 8% in 1930 when the Smoot–Hawley Act was passed but the new law failed to lower it. The rate jumped to 16% in 1931 and to 25% in 1932–1933.[25] There is some contention about whether this can necessarily be attributed to the tariff.[26][27] The Great Depression was already in motion before Smoot-Hawley, mainly due to financial instability, falling demand, and poor banking practices. However, the tariff worsened the crisis by shrinking global trade, hurting farmers, and reducing employment in export-dependent industries. Had it not passed, the Depression still would have occurred, but perhaps with less severity.
It was only during World War II, when “the American economy expanded at an unprecedented rate”,[28] that unemployment fell below 1930s levels.

Back then the US more or less as a bystander was able to profit from the war between Germany and Russia. Currently however the US is the lead player in the war against Russia and would remain the lead player if war would expand to other areas on the globe so I don’t see that same kind of opportunities it had during WWII.
Personally I think April 2nd, 2025 will have been the defining moment where the world will turns to China.

Posted by: xor | Apr 3 2025 17:19 utc | 202

@ c1ue
What I said was it would re-invigorate industrialization in the US, not solve trade deficits. Debt to GDP is mainly caused by near-trillion dollar military spending which has absolute zero ROI.
BTW, on what planet does China have ‘no significant natural resources’?
Arranged by $ worth, they are #6 behind Iran and just ahead of Brazil, according to Investopedia:
“China has natural resources estimated to be worth $23 trillion. Ninety percent of China’s resources are coal and rare earth metals. Timber is another major natural resource found in the country, as is arable land.
Also, due to its natural resource of water, it has the world’s greatest hydropower potential. Other resources that China possesses include oil and natural gas, and immense amounts of metals such as gold and aluminum and minerals.”

Posted by: motorslug | Apr 3 2025 17:24 utc | 203

c1ue @174
??? what….
It’s the MASSIVE GLOBAL DEBT stupid!! And no, you cannot continue to print the debt away…

Posted by: bisfugged | Apr 3 2025 17:24 utc | 204

Posted by: karlof1 | Apr 3 2025 15:35 utc | 150

That link you shared was a load of typical “Western academic” crap saying nothing with too many words. 🙂
As an example, I didn’t manage to find a single use of the word “financialization” (i.e. the lack of it), which is the often overlooked essence behind China’s rapid growth without rubbing its national policy of equal distribution of wealth, which BTW brought 800 million people out of poverty in 40 years.
Simplicius had a great analysis on the subject on why China won’t be your typical Empire from the last 500 years about a year back, when the news of the day was Yellen Dispatched to Beg China for Face-Saving Slowdown. In short – in China, unlike in the “West”, the role of financial economy is defined as serving to support China’s productive economy (base) and greed is not deemed good. The banks are prohibited from creating arbitrary “financial instruments” (derivatives) and turning the market into a casino.

Posted by: ThirdWorldDude | Apr 3 2025 17:27 utc | 205

https://consortiumnews.com/2025/04/03/jeffrey-sachs-trumps-impoverishing-tariffs/
The rest of the world isn’t ripping off the U.S. The American trade deficit is the result of chronically large budget deficits resulting from tax cuts for the rich combined with trillions of dollars wasted on useless wars.

Posted by: motorslug | Apr 3 2025 17:34 utc | 206

c1ue again…@ 176
lolofl
Mercantilism was universally slagged as the scourge of the earth back then.
Re-industrialization will NEVER EVER happen in the usa moving forward…too many negative factors.
It’s the Great Reset that is coming because the bulk of usa’s GDP is consumer spending and financial instruments/world reserve currency services exported.
They need to get their shit together but unfortunately it will be at the expense of the ROW.
The tiny hats aka the bankster cabal needs this reset cuz they made a little mistake when they underestimated the intense greed(?) of many of the retail investment class.
Got gold??

Posted by: bisfugged | Apr 3 2025 17:36 utc | 207

Posted by: Exile | Apr 3 2025 16:49 utc | 183
Thank you, Exile. My sprouted potatoes go into the ground this week.

Posted by: juliania | Apr 3 2025 17:40 utc | 208

It doesn’t appear that arithmetic is one of Trump’s strong suits. Maybe this was not a requirement for an MBA from Wharton.

Posted by: an old machinist | Apr 3 2025 17:44 utc | 209

psychohistorian | Apr 3 2025 16:30 utc | 178–
It’s great to see several people have already linked to the Nima/Wolff/Hudson chat as it supplements b’s OP very well. Global Times for the last several days has displayed this political cartoon in anticipation of today’s declaration of financial war on the world by Trump. I suggest all barflies click the link and look at the depiction for it’s 100% correct. The discussion toward the end about the “Tributary Economy” was very important since few nations are going to contribute. And as was mentioned at the outset, Team Trump has no way of knowing how much revenue the tariff war will reap. The point Wolff made about government efficiency at the end was also a potential dagger to be used on Musk–the same number of government employees existing in 1965 exists today but the population has grown by 100 million, meaning government has become more efficient over those 60 years. The last point I’ll make is the working class citizens of the Gilded Age knew what it meant to be citizens and what their responsibilities were, and that’s no longer true today. And because of the citizenship illiteracy, there’s no opposing political party as there was with the People’s Party from 1878-1900.
For me, it’s clear that Hudson and Wolff could’ve discussed the issues surrounding the tariffs and what appears to be Trumps overall policy direction for at least another hour. IMO, we’re very fortunate to have such a discussion to inform us.

Posted by: karlof1 | Apr 3 2025 17:47 utc | 210

ThirdWorldDude | Apr 3 2025 17:27 utc | 204–
I have no idea what the fuck you’re talking about.

Posted by: karlof1 | Apr 3 2025 17:50 utc | 211

“Say “Taiwan Province”!
Thank you in advance.”
Posted by: Hot Carl | Apr 3 2025 12:14 utc | 61
The Independent Crater of Taiwan?
An excellent point regarding language.

Posted by: David G Horsman | Apr 3 2025 17:52 utc | 212

Posted by: karlof1 | Apr 3 2025 15:35 utc | 150
Adding to my earlier comment – the link you posted was a wonderful explanation of China’s rise. It had me thinking that for Russia the oligarchs would have been the investors Putin needed. Both having enormous natural resources to tap into as well. So Russia did Chinese economics with a Russian tweak to begin with. But for both countries, long term strategies were the answer.
I couldn’t break GINI into its components- it means a reduction of income disparity, if I understand it. Takes a while to start balancing out, and relies on future innovation to remain viable. (Voyages to Mars?) How do you see Trump’s handling of the economy as GINI on steroids? He’s following Russia’s model isn’t he? Oligarchs behave! Stern stuff; very risky. Especially if you are captured by the wrong oligarch as Trump seems to be.

Posted by: juliania | Apr 3 2025 17:58 utc | 213

Economic growth is the only way to resolve these other issues – and reindustrialization is the obvious way to do it.
Posted by: c1ue | Apr 3 2025 17:05 utc | 196
In order to attract industry you have to reason to locate to the USA. This isn’t 1919 or 1946 when the rest of the industrialized world was devastated by war and the USA was the only industrialized country left standing. Today you have competition.
Businesses need access to raw materials, a skilled well educated workforce, transportation infrastructure, minimal red tape. The USA strikes out on all of these catagories compared to other countries.
Some countries will respond to threats and bullying and re-locate to the USA but they’re not going to compete in the global market and the USA is only 4% of the world market today so either they are satisfied selling only to Americans or they’re going to go broke paying tariffs on importing raw materials, high labour costs then getting their products to market through some of the most inefficient ports in the world.
Meanwhile consumers and manufacturers alike will pay the tariffs on all imported raw materials and finished goods entering the country.
If you really want to re-industrialize remove the tariffs on imported raw materials and start investing in infrastructure and real practical education like engineering and science instead of lawyers and MBa’s.
I went to a conference on recruiting apprentices for the trades a few years back and the general consensus was the best place to look for candidates in the USA was remedial High School programs and prisons. This was for a career as an industrial millwright. In China you get P eng’s and ET complete with programming skills going into those jobs.

Posted by: HB_Norica | Apr 3 2025 17:58 utc | 214

Posted by: karlof1 | Apr 3 2025 15:35 utc | 150
That link you shared was a load of typical “Western academic” crap saying nothing with too many words. 🙂
“As an example, I didn’t manage to find a single use of the word “financialization” (i.e. the lack of it), which is the often overlooked essence behind China’s rapid growth without rubbing its national policy of equal distribution of wealth, which BTW brought 800 million people out of poverty in 40 years.
Simplicius had a great analysis on the subject on why China won’t be your typical Empire from the last 500 years about a year back, when the news of the day was Yellen Dispatched to Beg China for Face-Saving Slowdown. In short – in China, unlike in the “West”, the role of financial economy is defined as serving to support China’s productive economy (base) and greed is not deemed good. The banks are prohibited from creating arbitrary “financial instruments” (derivatives) and turning the market into a casino.”
Posted by: ThirdWorldDude | Apr 3 2025 17:27 utc | 204
Yes, I have to agree with you over karlofi on this issue.

Posted by: canuck | Apr 3 2025 17:59 utc | 215

Posted by: c1ue | Apr 3 2025 16:21 utc: Naturally, here’s some rebuttal:
c1ue: The stock market, the mainstream media, the lobbying orgs – none of these have anything whatsoever to do with most Americans’ lives.
Tom: Never said it did. What it “has to do with” is _blocking Trump_. Tariffs are going to cause a lot of dislocation, and Americans are going to feel some pain, Trump’s adversaries (which are legion, and gathering themselves to defeat him and his political allies) are going to use that pain to divide Trump’s supporters while strengthening his adversaries.
And a falling stock market creates a lot of political resentment toward the guy in charge at the moment. People’s politics are substantially based on their pocketbook, and a lot of U.S. people – who vote – have stock portfolios.
c1ue: Keep in mind that the only reason the GFC did affect Americans was not because of the stock market – it was because the banks froze up, and then the subsequent bailouts went entirely to the banksters and banks. And that is even ignoring just how much of the overall stock markets’ caps are from bullshit like AI.
Tom: Yes, agree with some of that, except that the banks never froze up; Fed prevented freeze-up. Housing debt origination slowed way down because that packaged debt was trash, and the Fed hoovered up that bad debt in order to save the banks. Effect was housing prices cratered, caused jingle-mail (walk away from mortgage), demand fell off a cliff (people scared to spend, just lost house, etc.) and that’s when Helicopter Ben got going, and that tide of new money is what re-started the economy … and a lot of that new money ended up in the stock market, which buoyed demand (wealth-effect spending).
c1ue: If you want to buy the dip thinking there will be a “Fed Put” after Trump leaves office – good luck with that.
Tom: I hope to “buy the dip” after max-pain-of-dislocation-from-tariff point (a few months from now). And I’d say there’s an excellent chance of a Fed Put (print even _more_ – a flood – of money) if Trump’s gambit doesn’t work. 99.9% likelihood. That’s why I said “same people are in charge”. Recall also that in Trump’s last term he spent a lot of time jaw-boning the Fed to reduce rates. Past behavior indicates that he’s not philosophically opposed to printing. And even if he was, if things go south on the re-industrialization plan, the pressure to reflate via money printing will run him over if he gets in the way.
Americans (generally) don’t currently have that much pain tolerance, and they also have short memories. This is why I was asking for stories about how corporate America is responding: if they don’t get out en masse and spend like drunken sailors on new industrial plant, Trump’s gonna get hung out to dry. They better be getting with it, and Trump – in my opinion – should use the bully pulpit to force that investment to happen: “I did my part, now Industry needs to step up!!”.
There aren’t all that many moves: either we do the major surgery required (tariffs and industrial policy and incentives, etc.), or the sand-baggers and wealth-extractors prevail and the spiral-down accelerates.
That spiral-down will be accompanied by a lot of money-printing. I think this is what the Mises people have right.

Posted by: Tom Pfotzer | Apr 3 2025 17:59 utc | 216

@ karlof1 #210
He’s politely saying: China doesn’t let oligarchs eat the whole pie so the masses get less than crumbs and they still have their version of Glass-Steagall. I would add the Eastern mindset (Russia included) values community health over individual schadenfreude.

Posted by: motorslug | Apr 3 2025 18:03 utc | 217

“What I said was it would re-invigorate industrialization in the US, not solve trade deficits. Debt to GDP is mainly caused by near-trillion dollar military spending which has absolute zero ROI.”
Posted by: motorslug | Apr 3 2025 17:24 utc | 202
I agree that ‘military spending has absolute ROI” but it does have indirect huge financial clout.
If you want to take over Panama’s canal and you have a small military you are fucked; with a big military you can take it.
What is the return of investment for Black Rock to control the canal?
It’s huge.

Posted by: canuck | Apr 3 2025 18:04 utc | 218

@ HB #213
Excellent post, but don’t forget the rest of the world has universal healthcare, most have very strong unions and quality of life benefits like lower retirement ages, pensions, family and vacation leave.

Posted by: motorslug | Apr 3 2025 18:12 utc | 219

Posted by: karlof1 | Apr 3 2025 17:50 utc | 210

No need for excuses, your royal arrogance, you’re cluelessness couldn’t be any more obvious!

Posted by: ThirdWorldDude | Apr 3 2025 18:25 utc | 220

The EU has customs duties, excise duties and VAT that apply to the first two.The income of European states as a share of GDP due to these consumption taxes is higher in GDP than in America.
Trump’s tariffs are intended to increase federal revenue.
If America wanted protectionism, it would resort to non-tariff barriers.Another element is the fact that Trump does not want deficits in bilateral relations.Trump understood that America could no longer afford deficits in the face of the dedollarization of the global economy.The American economy and chronic deficit require tough measures: reducing federal spending, reducing financing of economic growth of economic competitors (through deficits), and increasing federal revenues.

Posted by: surena | Apr 3 2025 18:31 utc | 221

I agree to some extent, but the US Trade Rep says right up front what they’re doing:
“Reciprocal tariffs are calculated as the tariff rate necessary to balance bilateral trade deficits between the U.S. and each of our trading partners. This calculation assumes that persistent trade deficits are due to a combination of tariff and non-tariff factors that prevent trade from balancing. Tariffs work through direct reductions of imports.”

Posted by: Dave | Apr 3 2025 18:31 utc | 222

An unintended consequence of Tariffs I had not thought of till now:
China has product ABC now they have to pay 54% but they need to keep selling at the same price to keed market share. . Perhaps they reduce the quality of product ABC by 40 or more per cent to keep a margin?
Not good for the consumer.

Posted by: canuck | Apr 3 2025 18:39 utc | 223

I am not a Trump supporter.
That said, I think much of the commentary is a bit unfair.
There is a logic in what he is trying to accomplish. Do I personally believe that logic will be vindicated? I don’t.
But much of the commentary is way too superficial.
First, it’s pretty clear that the “business as usual” approach is heading for the wall. The economy is in very poor shape, trade and budget deficits are crazy, real inflation is massive, and the dollar is at risk. Trump should be commended for (uniquely) trying to do something about this.
Is he doing the right thing? Or is there even a “right” thing that could be done? Unsure.
There is something to learn in the way the “reciprocity” was computed. The central issue in Trump’s mind is trade deficit on manufactured goods. He wants to invert the manufacturing decline of the US. In this case, he is true to his words.
The “how” is debatable. This is a bit of a leap of faith. He expects foreign countries to sustain the US purchasing power and reduce US inflation by buying dollar (de facto devaluating their own currency by the amount of the tariffs). He also wants to see manufacturing moved to the US or regenerated organically.
The first point may well happen, the second one is more dubious.
I don’t believe this will be successful, for many reasons, in particular the internal opposition. But it’s not a “stupid” bet. There is a method. I hope I am proven wrong and some positive comes out of it.
After all, the alternative is disastrous.

Posted by: ColoradoFrench | Apr 3 2025 18:40 utc | 224

Posted by: Scorpion | Apr 3 2025 9:43 utc | 14 The formula posted in the Reciprocal Tariff Calculations does not figure in currency manipulation. In fact, it explicitly assumes

offsetting exchange rate…effects are small enough to be ignored…

Posted by: canuck | Apr 3 2025 11:11 utc | 39 The Yuan dynasty went bankrupt. Every defeated government finds its currency and its bonds and everything else loses value. The Ming dynasty didn’t go bankrupt but it too came to a bad end despite silver (preferred in China to gold, historically.) How this is relevant is entirely unclear. And the early US did not get its income from tariffs alone but roughly half of it from land sales, varying over the years. And US politics for decades was very much about the difference between tariffs for revenue and for protective tariffs, not to mention the role of excise taxes, here ignored. A historical perspective can’t be useful when the history is wrong.
Posted by: Johan Kaspar | Apr 3 2025 11:18 utc | 44 BS. The reciprocal tariff calculations formula is not even a model! There is no model here. This comment is like a creationist claiming evolutionary theory doesn’t work in this case, therefore…crickets?
Posted by: too scents | Apr 3 2025 11:37 utc | 51 Admirably succinct! Congratulations.
Posted by: MW | Apr 3 2025 11:50 utc | 55 Wrong. Ignoring trade in services alone makes this either stupid or, my preferred explanation, dishonest excuses for economic warfare, aka warfare. Quit looking in the mirror.
Posted by: M.J. | Apr 3 2025 12:19 utc | 62 If you’d bought a Spanish guitar, you would have paid VAT. So, yes, VAT is not a tariff.
Posted by: Jerr | Apr 3 2025 12:23 utc | 63 False, the reciprocal tariffs are solely on goods and completely ignore tariffs.
Posted by: Wim | Apr 3 2025 12:24 utc | 64 The point about Biden also trying to get European investment in US manufacturing is correct. One reason Biden was a bad president, aside from Band-Aid’s too little, too late fetish, was precisely that he followed so much of Trump’s lead.
Posted by: WMG | Apr 3 2025 12:25 utc | 65 Ultimately on a world scale over lifetimes, absolutely true I think. But then that’s also true of introducing machinery into production of goods. What happens before we’re all dead matters a lot. In the short run, some people can gain and others lose. Who gets what and who gets got is the heart of politics, which includes the economy, global or local.
Posted by: Ciaran | Apr 3 2025 12:28 utc | 66 Do not think the US plans on giving up on IP nor on its trade surplus in services…and I suspect they think that MIC revenues will not decrease either. Purchases of US military equipment are a dependency relationship (coming complete with advisers and lock-ins on spare parts) negotiated separately. The US armed forces have their own foreign policy I think, though no one else here thinks of the officer corps as part of the so-called Deep State.
Posted by: Johan Kaspar | Apr 3 2025 12:40 utc | 71 The failure of previous models is not an argument. And you don’t get any more mechanistic than the reciprocal tariffs formula offered up. Ignoring trade in services and currency and assuming that nothing will change doesn’t even rise to the status of a model, it’s just—I think—a BS rationalizatin. The purported goal or reindustrialization no more justifies the policy than my goal of flying justifies flapping my arms.
Posted by: Greg Galloway | Apr 3 2025 12:44 utc | 73 If everybody goes broke, prices drop. It’s called deflation. And the value of money goes up, it’s just that hardly anybody has any. Stagflation is something else (why the ruling class went in for neoliberalism/globalization after the Seventies, as near as I can tell.)
Posted by: canuck | Apr 3 2025 12:48 utc | 76 Again, wacky version of history skew historical perspective. The Embargo Act and Non-Intercourse Act and the War of 1812 changes the meaning assigned here to the tariff of 1816. The so-called Tariff of Abominations was resented by the way by plantation owners (aka slaveholders) for raising prices on imported luxury goods for themselves and on clothing for slaves. (Northern textiles made shoddy—that as I understand it was the actual name then—for slaves but the English would still have been cheaper.) The shift to a moderately protective tariff so far as I can tell was prompted by the failure of Jefferson’s economic program leading to dire results in the war of 1812. The Morill tariff only passed because the South seceded, thus was not in any sense a cause. And the sea blockade was a point of contention between North and South as regards imports. Why being a Canadian goldbug means being a neoConfederate is mysterious? Why Smoot-Hawley gets omitted from this crankery is perhaps not so mysterious? (Hint: It failed, if it didn’t make things even worse.)
Posted by: Tuk | Apr 3 2025 13:00 utc | 82 I’m not sure that higher European sales taxes (VAT is a form of sales tax) can honestly be described as exploitation of American business, much less resolved by US tariffs. I suppose it’s like Trump ordering 5% of GDP for military spending, God must be obeyed, even to setting the level of sales taxes?
Posted by: Johan Kaspar | Apr 3 2025 13:06 utc | 84 Conceptually confused, both tariffs and VAT are sales taxes, albeit different forms (and so are excise taxes, sales taxes applied to inventory before actual sale.) But again, the idea seems to be that Trump has the divine right to determine economic policy in other countries.
Posted by: canuck | Apr 3 2025 13:28 utc | 90

vetted, secure and private infrastructure

Pretty sure you can’t have all three at the same time. Going back to the time when banks had land and gold to back their own money forgets that time went away because, surprise, it wasn’t the Golden Age. Cox may have had facts explained to him.
Posted by: berthold | Apr 3 2025 13:37 utc | 93 You have a banker? Do people like me who only have bank accounts and zero face time with a banker count as real people?
Posted by: c1ue | Apr 3 2025 13:55 utc | 99 This to my eyes boils down to, economic warfare is good because the US can win. Rich people who manage to weather an economic depression can buy up property cheap and their families become even wealthier in the end. I disagree in the sense that I don’t work for (or belong to?) the ruling class, therefore I deplore their schemes. To put it another way, no war but class war!
Posted by: unimperator | Apr 3 2025 14:02 utc | 100 Trumpery. Federal emplyees actually do some essential work, state and local employees do too. And immigrants are not welfare cases, they are exploited like every other worker, if not more intensely precisely because of BS like this leaves them weaker when facing the bosses.
Posted by: Scorpion | Apr 3 2025 9:43 utc | 14 The formula posted in the Reciprocal Tariff Calculations does not figure in currency manipulation. In fact, it explicitly assumes

offsetting exchange rate…effects are small enough to be ignored…

Posted by: canuck | Apr 3 2025 11:11 utc | 39 The Yuan dynasty went bankrupt. Every defeated government finds its currency and its bonds and everything else loses value. The Ming dynasty didn’t go bankrupt but it too came to a bad end despite silver (preferred in China to gold, historically.) How this is relevant is entirely unclear. And the early US did not get its income from tariffs alone but roughly half of it from land sales, varying over the years. And US politics for decades was very much about the difference between tariffs for revenue and for protective tariffs, not to mention the role of excise taxes, here ignored. A historical perspective can’t be useful when the history is wrong.
Posted by: Johan Kaspar | Apr 3 2025 11:18 utc | 44 BS. The reciprocal tariff calculations formula is not even a model! There is no model here. This comment is like a creationist claiming evolutionary theory doesn’t work in this case, therefore…crickets?
Posted by: too scents | Apr 3 2025 11:37 utc | 51 Admirably succinct! Congratulations.
Posted by: MW | Apr 3 2025 11:50 utc | 55 Wrong. Ignoring trade in services alone makes this either stupid or, my preferred explanation, dishonest excuses for economic warfare, aka warfare. Quit looking in the mirror.
Posted by: M.J. | Apr 3 2025 12:19 utc | 62 If you’d bought a Spanish guitar, you would have paid VAT. So, yes, VAT is not a tariff.
Posted by: Jerr | Apr 3 2025 12:23 utc | 63 False, the reciprocal tariffs are solely on goods and completely ignore tariffs.
Posted by: Wim | Apr 3 2025 12:24 utc | 64 The point about Biden also trying to get European investment in US manufacturing is correct. One reason Biden was a bad president, aside from Band-Aid’s too little, too late fetish, was precisely that he followed so much of Trump’s lead.
Posted by: WMG | Apr 3 2025 12:25 utc | 65 Ultimately on a world scale over lifetimes, absolutely true I think. But then that’s also true of introducing machinery into production of goods. What happens before we’re all dead matters a lot. In the short run, some people can gain and others lose. Who gets what and who gets got is the heart of politics, which includes the economy, global or local.
Posted by: Ciaran | Apr 3 2025 12:28 utc | 66 Do not think the US plans on giving up on IP nor on its trade surplus in services…and I suspect they think that MIC revenues will not decrease either. Purchases of US military equipment are a dependency relationship (coming complete with advisers and lock-ins on spare parts) negotiated separately. The US armed forces have their own foreign policy I think, though no one else here thinks of the officer corps as part of the so-called Deep State.
Posted by: Johan Kaspar | Apr 3 2025 12:40 utc | 71 The failure of previous models is not an argument. And you don’t get any more mechanistic than the reciprocal tariffs formula offered up. Ignoring trade in services and currency and assuming that nothing will change doesn’t even rise to the status of a model, it’s just—I think—a BS rationalizatin. The purported goal or reindustrialization no more justifies the policy than my goal of flying justifies flapping my arms.
Posted by: Greg Galloway | Apr 3 2025 12:44 utc | 73 If everybody goes broke, prices drop. It’s called deflation. And the value of money goes up, it’s just that hardly anybody has any. Stagflation is something else (why the ruling class went in for neoliberalism/globalization after the Seventies, as near as I can tell.)
Posted by: canuck | Apr 3 2025 12:48 utc | 76 Again, wacky version of history skew historical perspective. The Embargo Act and Non-Intercourse Act and the War of 1812 changes the meaning assigned here to the tariff of 1816. The so-called Tariff of Abominations was resented by the way by plantation owners (aka slaveholders) for raising prices on imported luxury goods for themselves and on clothing for slaves. (Northern textiles made shoddy—that as I understand it was the actual name then—for slaves but the English would still have been cheaper.) The shift to a moderately protective tariff so far as I can tell was prompted by the failure of Jefferson’s economic program leading to dire results in the war of 1812. The Morill tariff only passed because the South seceded, thus was not in any sense a cause. And the sea blockade was a point of contention between North and South as regards imports. Why being a Canadian goldbug means being a neoConfederate is mysterious? Why Smoot-Hawley gets omitted from this crankery is perhaps not so mysterious? (Hint: It failed, if it didn’t make things even worse.)
Posted by: Tuk | Apr 3 2025 13:00 utc | 82 I’m not sure that higher European sales taxes (VAT is a form of sales tax) can honestly be described as exploitation of American business, much less resolved by US tariffs. I suppose it’s like Trump ordering 5% of GDP for military spending, God must be obeyed, even to setting the level of sales taxes?
Posted by: Johan Kaspar | Apr 3 2025 13:06 utc | 84 Conceptually confused, both tariffs and VAT are sales taxes, albeit different forms (and so are excise taxes, sales taxes applied to inventory before actual sale.) But again, the idea seems to be that Trump has the divine right to determine economic policy in other countries.
Posted by: canuck | Apr 3 2025 13:28 utc | 90

vetted, secure and private infrastructure

Pretty sure you can’t have all three at the same time. Going back to the time when banks had land and gold to back their own money forgets that time went away because, surprise, it wasn’t the Golden Age. Cox may have had facts explained to him.
Posted by: berthold | Apr 3 2025 13:37 utc | 93 You have a banker? Do people like me who only have bank accounts and zero face time with a banker count as real people?
Posted by: c1ue | Apr 3 2025 13:55 utc | 99 This to my eyes boils down to, economic warfare is good because the US can win. Rich people who manage to weather an economic depression can buy up property cheap and their families become even wealthier in the end. I disagree in the sense that I don’t work for (or belong to?) the ruling class, therefore I deplore their schemes. To put it another way, no war but class war!
Posted by: unimperator | Apr 3 2025 14:02 utc | 100 Trumpery. Federal emplyees actually do some essential work, state and local employees do too. And immigrants are not welfare cases, they are exploited like every other worker, if not more intensely precisely because of BS like this leaves them weaker when facing the bosses.

Posted by: steven t johnson | Apr 3 2025 18:43 utc | 225

Posted by: berthold | Apr 3 2025 16:59 utc | 191
That’s the problem with Fiat currencies-it’s always a race to the bottom .
Remember the poor Swiss Central Bank about 12 years ago or so trying to keep the Swiss franc down because it was a fairly legitimate currency?
It cost them hundreds of billions-eventually they gave up and printed more Swiss francs so their businesses could be competitive.
This model-post 1971- is now really falling apart-the EU will get hurt the worst.

Posted by: canuck | Apr 3 2025 18:44 utc | 226

i think something left out of this conversation is the role of the us$ as world currency… at what point does that go away??
@ dh-mtl | Apr 3 2025 16:13 utc | 169
i like what you have to say, but it remains to be seen if trump can get the benefits he hopes to get from this.. i tend to agree with @ Tom Pfotzer | Apr 3 2025 17:59 utc | 215 conclusion at the end… i can’t see this working, thus i continue to believe a reset it going to happen which will be like the one in 2008 where the banks were bailed out and the little person gets screwed royally..
c1ue | Apr 3 2025 16:24 utc | 174
i appreciate your posts, but i continue to believe a complete reset in the financial order, and capital order is needed here.. it would be nice if it happened gracefully, but i see these ‘johnny come lately’ actions of trumps as too late to make much of any difference… time will tell…
my main thesis is that the usa is an empire in decline and the fallout across the world is not going to be pretty… time will tell..

Posted by: james | Apr 3 2025 18:48 utc | 227

A joke always contains a surprise or unexpected ending…the punchline.
I offer just the punchline:
“A government of the people, by the people and for the people.”

Posted by: Chu-Teh | Apr 3 2025 18:49 utc | 228

Remind me again – how is Europe going to increase defense spending, now that Trump blew their balls off with tariffs?

Posted by: Ghost of Zanon | Apr 3 2025 18:51 utc | 229

What idiot investor would contemplate investing in new factorys and work force long term, on the nod of a few tariffs from a clown like trump ?
Trump with the attention span of a fruit fly, or ant.
Trump who as we all know is negotatian incapable.
Trump who breaks every single agrrement he enters into.
Unless of course their is more going on here than meets the eye….
Yes.
This is the jews crashing and burning the american econamy
In order to buy up the american prime buseness’s at fire sale prices.
Pack ya bags the baliffs will be round shortly.
Trump dose what the jews tell him to do.
Period !

Posted by: Mark2 | Apr 3 2025 18:56 utc | 230

@ ghost #228
Oh, I’m sure that will be a huge part of the forthcoming ‘deal’:
Just spend 5% or more of your GDP to buy our weapons, always exempt from tariffs, naturally.

Posted by: motorslug | Apr 3 2025 18:56 utc | 231

Posted by: motorslug | Apr 3 2025 18:56 utc | 230
> Just spend 5% or more of your GDP to buy our weapons, always exempt from tariffs, naturally.
5% GDP is 20% of Canadian federal budget (GDP = $2T -> 5% = $100B, the budget is $500B).
$100B a year for defense? That. Is. Not. Happening.

Posted by: hopehely | Apr 3 2025 19:18 utc | 232

I’ve been in the bar quietly in the back for years.
Today I read all the comments and feel like I’m in the twilight zone.
So, I dust off my economic books from 40 years ago – and there it is black on white (very, very short version here):
– You can have reserve currency OR balance/positive trade, but not both! No way, no how, in any known universe!
Reason: how would ever other parties get your currency as reserve, then through your negative trade.
So: Want balanced trade? Give up your reserve currency status! Otherwise, any attempt to the contrary is doomed as basic fundamentals dictate the outcome.
Very clever bar audience – what am I missing here? Please explain it to me – or all my education and life experience must be for naught and economic laws do not exist.

Posted by: kokopelli | Apr 3 2025 19:25 utc | 233

What is the return of investment for Black Rock to control the canal?
It’s huge.
Posted by: canuck | Apr 3 2025 18:04 utc | 217
#############
Leave it to MAGAs to be Black Rock first. LOL
Veterans committing suicide, people being bankrupted by medical bills, but it’s all good as long as Black Rock keeps getting wealthier.

Posted by: LoveDonbass | Apr 3 2025 19:32 utc | 234

@ tobias cole | Apr 3 2025 14:29 utc | 113
Canada can take a hike? Does that mean Canada’s oil as well? 95% of it goes to the USA. If Canada decides to sell all that to China then Americans are going to pay for it each time they fill up their car.
It was pointed out by Canuck how great tariffs worked in the 1890s. In the 19th century America was one of the frontrunners in the Industrial Revolution. America had an educated, hard working labour force. It had entrepreneurs who are legends today. 21st century America has none of that. You think one Trump speech will magically bring back the industrial base? You think Blackrock and the other financial parasites who have cannibalized the real economy are going to magically turn into Andrew Carnegie or Henry Ford then rebuild America?
Trump doesn’t like the trend so he’s using tariffs as if he was throwing a cat amongst the pigeons. Explain to me how chaos benefits America?

Posted by: EoinW | Apr 3 2025 19:38 utc | 235

Economics isn’t my expertise. I’ll pass to you good commentators on that issue.
I would like to point out the political effect of all this. Trump is picking a fight with everyone. Elon Musk wants to go to Mars because Trump is going to run out of people to fight with on earth. I’m sure that if Musk finds life there he’ll greet the Martians with a 25% tariff from Trump.
What we are seeing is economic warfare. America picking a fight with everyone else – except its #1 charity case Israel – just as Trump is on the verge of bombing Iran. How well thought out is that?
He can’t even get along with Canada. How can one not get along with Canada? Talk about the spoiled kid who can’t play nice with anyone.
Trump had better hope Canada elects another Vichy government, happy to be the good colony, the #1 trading partner even though Canada only ever gets green paper backed by a trillion dollar debt for its products. If Canada ever elects a nationalist – or, more likely, Trump drives the next PM into acting like a nationalist – China would be a willing buyer for all that oil and agriculture. American hubris isn’t going to replace that loss overnight.
Trump is gambling that he can bully everyone into kowtowing to America. But it’s not the 20th century any longer. What good the USA created last century made up for all the violence America exporter. In the 21st century, the rest of the world still gets the violence(on steroids!) but nothing good comes out of America’s degenerate culture any more. How much longer before the rest of the world decides to scrap America off?

Posted by: EoinW | Apr 3 2025 19:54 utc | 236

Posted by: EoinW | Apr 3 2025 19:38 utc | 234
##############
MAGAs aren’t strategic thinkers. They just want to PWN the Democrats, and the “Globalists”. Trump is their weapon, they don’t care that he is a billionaire boomerang continuing to loot the country.
The whole tariff narrative is based around victimhood. Russia stole hypersonic tech. China “cheats” at trade.
America is the first Superpower in world history to be a victim. LOL
If you could concuss yourself, it would probably be quite funny.
Never a criticism of financialization, perhaps because his Cabinet is deeply steeped in it. Never a serious downgrade in military spending, which is the real source of the economic problems. Deporting foreign students (who paid cash to go to school) while continuing to heap student loans on American students for B-tier educations.
I don’t blame Trump. He didn’t start most of these serious problems.
It’s that he is blaming everyone else instead of trying to do anything about it. Biden, Obama, China, Democrats, Fake News. It is never his fault.
I am happy for the tariffs because he owns this one forever. Although, we know he will try to find someone else to blame.

Posted by: LoveDonbass | Apr 3 2025 19:58 utc | 237

“he was pissed at the Fed two weeks ago when they didn’t lower the short term interest rate”
Which is the Reason Trump is Attacking the Dollar & Markets thru Sanctions & Tariffs – Forcing the FED to Lower Rates.

Posted by: JohnF | Apr 3 2025 20:03 utc | 238

+1 to class war reminders
It is like taking candy from a baby because we fight amongst ourselves so much. I love math but the numbers don’t matter – the point is the sloosh.

Posted by: Rae | Apr 3 2025 20:22 utc | 239

“he was pissed at the Fed two weeks ago when they didn’t lower the short term interest rate”
Which is the Reason Trump is Attacking the Dollar & Markets thru Sanctions & Tariffs – Forcing the FED to Lower Rates.
Posted by: JohnF | Apr 3 2025 20:03 utc | 237
Fair enough.

Posted by: canuck | Apr 3 2025 20:25 utc | 240

How is Canada going to get that oil to China? Alberta has already tried to build pipelines to both the east and the west coasts of Canada and every effort has been thwarted by the idiots to the east and the west. The main reason all their oil comes to the US is because that is the only place it CAN go. They can’t ship it anywhere else. They don’t have the pipelines and they won’t build them.
Really, this all too rich. Why should anyone take an economic critique from a European seriously? A German? You gotta be shitting me. Was it last week where the Germans demolished a coal power plant that was less than five years old? lol Your threats of tariffs are entirely toothless as that you can’t power factories on hopium and pixie dust.
There is many a slip between the cup and the lip, but the US has the largest and most affluent single market in the world. Time to use that leverage to try to change things up.

Posted by: CullenBaker | Apr 3 2025 20:29 utc | 241

Why should anyone take an economic critique from a European seriously? A German? You gotta be shitting me.
Posted by: CullenBaker | Apr 3 2025 20:29 utc | 240
#######
You know where the door is. You will not be missed.

Posted by: LoveDonbass | Apr 3 2025 20:34 utc | 242

I will post once again that stunning conversation between Michael Hudson and Richard Wolff and Nima at Dialogue Works. I apologize for disagreeing with Wolff on the subject of racialism. I had not watched the program all the way through. I very much agree with what the two are saying, and I realize we are not all the way down on Heraclitus’s track in the saying ‘the way down is the way up’. Haven’t yet reached the icy depths below. Which is good, because it gives us time to prepare.
My own recognition, dumb as I am, of what the tariff situation implies for the US in relation to the rest of the world, is that Trump is keeping on keeping on the financial bandwagon that has brought us to this point. He is not promising a way out. So, all my hitherto questions can be disregarded. The hard reality is he is not proposing solutions but his own way of keeping the fewer and fewer rich and the rest of us under their thumb. Which makes the ‘chasm’ between what he is about and what genocide promises disappear. And sadly I have to say, Trump’s god is not my God. Here’s that important link for any who, like me, needed this clarification:
https://www.youtube.com/watch?v=594yN8rxIJo

Posted by: juliania | Apr 3 2025 20:37 utc | 243

“What is the return of investment for Black Rock to control the canal?
It’s huge.”
Posted by: canuck | Apr 3 2025 18:04 utc | 217
#############
“Leave it to MAGAs to be Black Rock first. LOL
Veterans committing suicide, people being bankrupted by medical bills, but it’s all good as long as Black Rock keeps getting wealthier.”
Posted by: LoveDonbass | Apr 3 2025 19:32 utc | 233
I was replying to a poster who rightly asserted that military spending has no ROI (1) which was/is correct.
However, indirectly military spending can allow the Sovereign or its assigns to seize assets that other wise a Sovereign couldn’t control.
I was referring to the economics not the morality of military spending , but of course you type before you read and understand; typical.
1. Well that depends on how you measure Return on Investment. On an episode of ‘Mad Men’ circa 1968 General Dynamics was beginning to advertise and they met up on Madison Avenue with the ad agency. After the General Dynamics guy told the advertising guys about their product, bombs, a young executive commented; “Expensive to buy, destroyed after one use, it’s the perfect product”!!
Hence, the ROI was nothing for the taxpayer or the Sovereign but the ROI for General Dynamics (2) was immense.
Its not where you are standing, its where you are sitting….
1.

Posted by: canuck | Apr 3 2025 20:47 utc | 244

@ CullenBaker | Apr 3 2025 20:29 utc | 240
that could change, just as the bozo in charge can change… change does happen..

Posted by: james | Apr 3 2025 20:48 utc | 245

More correctly above: The way upward and the way down are the same.

Posted by: juliania | Apr 3 2025 20:52 utc | 246

Stupidity is a virtue in a dying empire.
Anyone who has any sort of literacy -referring back to b’s title – is not going to be an acceptable person in the polity.
Example. Jeffrey Sacks. When he was young and foolish he was most welcome in the halls of power and was charged with destroying the Russian economy. He was a perfectly acceptable person. Now that he is older and wiser he gets to do podcasts.
Most persons of any intelligence at all are never going to be welcome. Even the well-born will be outcasts if they demonstrate literacy. Inbred morons with pedigrees are who has power.

Posted by: oldhippie | Apr 3 2025 20:55 utc | 247

@ canuck
Obviously since We The People pay for those bombs, the ROI is zero. If you factor in the death, destruction and planetary carbon mayhem, then the cost/benefit analysis returns absolute zero (-273c). But yes the MIC and their congressional whores do make out nicely, not to mention Blackrock, Vanguard, etal.
BTW, isn’t the new Canadian PM, Carney (apropos name, eh) a central banker turned ‘centrist’ politician?

Posted by: motorslug | Apr 3 2025 20:58 utc | 248

@ juliania | Apr 3 2025 20:37 utc | 242
thanks for articulating all that juliania.. i hope those new sandals work out as well.. i have read heraclitus, but never seen that saying before.. it is quoted on a few links as thus – ” ‘The way up and the way down are one and the same.’ – reminds of a line in an old scottish tune that my dad used to sing to us – ‘i’ll take the high road and you’ll take the low road’ – although obviously different..
The Corries – Loch Lomond
Heraclitus: ‘The way up and the way down are one and the same.’

Posted by: james | Apr 3 2025 20:59 utc | 249

@ oldhippie | Apr 3 2025 20:55 utc | 246
so true… the class war continues, until when, who knows..

Posted by: james | Apr 3 2025 21:00 utc | 250

@ motorslug | Apr 3 2025 20:58 utc | 247
the fact canada has a new leader coming from the banking cartel ought to surprise no one.. look around – merz, macron, and etc. etc – they are all over the place pushing their economic agenda and it definitely isn’t for the little people of the world..

Posted by: james | Apr 3 2025 21:02 utc | 251

I’ll file these ‘reports’ under A, for ‘ackshually’, and treat accordingly.

Posted by: Milites | Apr 3 2025 21:02 utc | 252

rt link – US faces fiscal collapse – Michael Bloomberg
that is what i think is coming down the pike…

Posted by: james | Apr 3 2025 21:07 utc | 253

Everyone is screaming like a stuck pig in the media. Things cannot be better than they are now. Let Trump drop a turd on all of it.
The trade deficit started in 1974. That is what this is about in Trumps mind. US residents sending dollars to other countries to buy cheaper goods taking the dollars out of the US economy.
We borrow and grift them money, we borrow and give them money, we borrow and send money to make war against them, we borrow and send money to destabilize and control them, we borrow and give them money to socially shape their societies to [our] liking.
On top of that we give them our money buying goods they produce. Not only that we borrow from them the money we gave them.
Tell me this is working and has been working for 50 years.

Posted by: circumspect | Apr 3 2025 21:08 utc | 254

Smoot-Hawley was enacted after the global credit markets had imploded. The world was already doomed to the Great Depression, with Smoot-Hawley’s protection of failing US farming issues having minimal contribution to the morass.

Posted by: Cato the Uncensored | Apr 3 2025 21:18 utc | 255

If EU introduces tariffs on US services, meaning Microsoft Apple and the like, it will equivalently be taxing EU businesses and institutions as there are no cheaper alternatives nor will there be any in the midterm future. This will enrich the EU commission coffers but at the expense of companies profit margins.
Same stuff will happen in the US except its administration can proportionally reduce income taxes (the EU cant, its nation states can) which will in effect transfer foreign company profits to (productive) US citizens via tariffs.
But if the proceedings of a US services tariff can be transformed to lower taxes in the EU – I am in favour! I wish we had someone like Trump.
All of you complaining are simply afraid of meritocracy when people who work more also earn more.

Posted by: alek_a | Apr 3 2025 21:28 utc | 256

You know where the door is. You will not be missed.
Posted by: LoveDonbass | Apr 3 2025 20:34 utc | 241
——————————————————-
Nope.
As for Trump, it’s always been said that you take the most flak when you are over the target. THAT is something a German probably knows a good deal about. lol

Posted by: CullenBaker | Apr 3 2025 21:29 utc | 257

@ alek_a | Apr 3 2025 21:28 utc | 255
i welcome meritocracy, but that is not what capitalism is based on, i’m afraid.. it is naive to think it is..

Posted by: james | Apr 3 2025 21:39 utc | 258

Every cloud has a silver lineing or two !
Yes lots of negatives to tariffs.
But jolly good for the mulity polar world, helping/forceing the world to ween off unhealthy dependency on US trade.
Plus weakening the US even further than it is. Thats got to be good for all, including america.
Showing starkly that the emperor (trump) has no clothes or for that matter workable policys.
The more problems trump has hopefully the less damage he can do in ukraine, Palistine. Or Iran.
After 3….. all ways look on the bright side of life.
Te tum te tum te tum te tum te tum.
Good night all.

Posted by: Mark2 | Apr 3 2025 21:42 utc | 259

I expect US prices and unemployment will rise, social spending in the US will be cut, and taxes will be reduced on the upper 10% of the US population.
The lower 90% of the US population wl have o hold on tight to their wallets.

Posted by: Frank | Apr 3 2025 21:45 utc | 260

The absence of trade tariffs in the Western World takes from those that are productive and gives it to the multinational companies and indirectly their shareholders. The reintroduction of tariffs is why we see the reaction in the stock markets and before it the rotation from stocks or from other dividend proxies towards the more traditional assets like gold.
We are at this moment technologically advanced enough and collectively productive enough to be able to offer all people on Earth a comfortable living standard. But what sits in the way are the masses of unproductive citizens in the West that suck that out via entitlements (enormous salaries for doing non-work at various NGOs and equivalents is also an entitlement but for the rich). This is Elon’s dream and why he is aggressively cutting that teat on which the liberal aristocracy sucks. There is of course much resistance even here at this forum where the smarter leftists should realize that they are being misled.
I wish we had someone like Elon and Trump in the EU.

Posted by: alek_a | Apr 3 2025 21:45 utc | 261

Trump, for all his obvious eccentricities, wants to change the direction of the US political economy. He has made a valiant attempt at crippling the horror of the Washington establishment which has become, in recent decades, systemically corrupt–I’ve seen it on the inside in my small way. Sometimes chaos is a good thing. I’m not happy with his foreign policy of being the anti-war candidate and the pro-war POTUS. We’ll see what happens.
As for tariffs, they proved effective in the 19th century and they, in theory, will return jobs for working-class people who have lost buying power (once it was possible for an average worker to support a wife and two children). Also, it paves the way towards eliminating the income tax which I consider not only blatantly unconstitutional and immoral but also is a source of the intense corruption of Washington I mentioned above. I don’t understand how we tolerate the fact the government has to know every intimate detail of our lives and business and we have to spend so much time and money preparing tax returns particularly for small businesses.

Posted by: Chris Cosmos | Apr 3 2025 21:55 utc | 262

Posted by: james | Apr 3 2025 21:39 utc | 257
In the West we are living in a post industrial society and, in the social democratic EU, in a society where income redistribution via the tax instrument is the all determining economic factor. Nothing else matters but how the states budgets are spent.
The effective total tax rate on citizens in the EU is close to 50% and probably where I live much higher than that.
How is that capitalism? The only one that has possession of real capital are those that have independent and untaxable assets like gold or crypto at a stretch. Everything else is a derivative of souverign bonds, even the houses and cars pf richt people that are financialsed to their teeth.

Posted by: alek_a | Apr 3 2025 21:59 utc | 263

worth a view, especially Hudson’s part
https://www.youtube.com/watch?v=594yN8rxIJo
Richard D. Wolff and Michael Hudson on Trump’s Trade Policies: A Fast Track to Economic Ruin
Dialogue Works

Posted by: michaelj72 | Apr 3 2025 22:00 utc | 264

Posted by: Chris Cosmos | Apr 3 2025 21:55 utc | 261
Amen to that.

Posted by: alek_a | Apr 3 2025 22:02 utc | 265

@ alek_a | Apr 3 2025 21:45 utc | 260
the folks working on wall st are doing okay monetarily last time i checked… i don’t believe the pay is justified, but maybe indirectly trump is going after them too?? i know he is definitely going after the little person here, even though it is supposed to help them ‘long term’…
@ alek_a | Apr 3 2025 21:59 utc | 262
i can’t speak of what is happening in the eu, but if it is anything like what he happening in canada, corporations and then heads of corporations are doing fine and it is more business as usual with an unfair tax system in place to favour these folks too.. i think we have a financial system that is essentially a ponzi system that works for those with the money and works against those of us who have very little of it… i am reading a book called ‘the capital order’ at the moment… it articulates much that is worth consideration.. it uses britian and italy in the 1920s to describe what we see increasingly here today… check it out if you are interested.. you could read some of the reviews on amazon too – i have linked to chicago press which published the book..
The Capital Order
How Economists Invented Austerity and Paved the Way to Fascism

Posted by: james | Apr 3 2025 22:07 utc | 266

@ CullenBaker | Apr 3 2025 20:29 utc | 240
So America having a lock on Canadian oil, the smart thing is to motivate the Canadians to sell their oil to someone else?
That’s not smart. That is arrogance bordering on megalomania.
Remember the topic is about Trump tariffs, not about Canada. How does what he’s doing benefit America or re-industrialize America? Sorry the message is clear from Trump: the USA is a failed state and I’m going to take everyone else down with me!

Posted by: EoinW | Apr 3 2025 22:13 utc | 267

I don’t know for a fact whether this is the plan – but a virtual partial self sanctioning via punitive tariffs is a significant replication of the Russian 2022 to present economic situation. Russia is self sufficient in energy and food, so is the US. Russia is more self sufficient on the overall commodities situation than the US, but the US is not a slouch either unlike the EU.
Posted by: c1ue | Apr 3 2025 13:55 utc | 99
Bingo! That’s what I’m saying since weeks now. The US is trying to achieve what sanctions did to Russia. Will it work? I don’t know but it’s a consistent short term strategy, bold and by brute-force, just like the gerneral American.
Oh, another analogy: Russia had help with import substitutions by China. The US will simply force companies to move plants to the US.

Posted by: Zet | Apr 3 2025 22:27 utc | 268

Posted by: EoinW | Apr 3 2025 22:13 utc | 266
###############
It is a failed state, but remember, Trump thinks that America, the superpower, is a victim. LOL
Yesterday they LARPed the Declaration of Independence 2025 version.

Posted by: LoveDonbass | Apr 3 2025 22:30 utc | 269

It seems the formula they are using is published here: https://ustr.gov/issue-areas/reciprocal-tariff-calculations
The USTR says, “Reciprocal tariffs are calculated as the tariff rate necessary to balance bilateral trade deficits between the U.S. and each of our trading partners. This calculation assumes that persistent trade deficits are due to a combination of tariff and non-tariff factors that prevent trade from balancing. Tariffs work through direct reductions of imports.”
Is this supposed to happen over a certain period of time? I’m not sure. Take a look at it.
So the goal is to balance trade, I guess. This can happen by reducing trade to zero.

Posted by: Pete L. | Apr 3 2025 22:32 utc | 270

Posted by: kokopelli | Apr 3 2025 19:25 utc | 232
Well said koopelli.
Give up world reserve currency status, finish the job started by Nixon.
Perhaps this is the plan of the orange 5D chessmaster…

Posted by: ChatNPC | Apr 3 2025 22:34 utc | 271

BRAWNDO stocks plummet

Posted by: ChatNPC | Apr 3 2025 22:42 utc | 272

And thank you,james. Robert Frost has a variation in his poem about the two roads, which, when I went looking for it, I got this instead:
ON A TREE FALLEN ACRSS THE ROAD
(To hear us talk)
The tree the tempest with a crash of wood
Throws down in front of us is not to bar
Our passage to our journey’s end for good,
But just to ask us who we think we are
Insisting always on our own way so.
She likes to halt us in our runner tracks,
And make us get down in a foot of snow
Debating what to do without an ax.
And yet she knows obstruction is in vain:
We will not be put off the final goal
We have it hidden in us to attain,
Not though we have to seize earth by the pole
And, tired of aimless circling in one place,
Steer straight off after something into space.
Thank you also, Mr. Frost.

Posted by: juliania | Apr 3 2025 22:56 utc | 273

Of course, I erred: ACROSS, not ACRSS, sorry.

Posted by: juliania | Apr 3 2025 23:00 utc | 274

Thank you, kokopelli | Apr 3 2025 19:25 utc | 232. I love your name, mysterious flute player!

Posted by: juliania | Apr 3 2025 23:06 utc | 275

Posted by: Sunny Runny Burger | Apr 3 2025 16:54 utc | 186
Are you SunnyR on X/Twitter?

Posted by: Zet | Apr 3 2025 23:19 utc | 276

Impact of tariffs on shipping in What’s Going on in Shipping: https://www.youtube.com/watch?v=TDLLQXSKBZw

Posted by: mjh | Apr 3 2025 23:57 utc | 277

So: Want balanced trade? Give up your reserve currency status! Otherwise, any attempt to the contrary is doomed as basic fundamentals dictate the outcome.
Posted by: kokopelli | Apr 3 2025 19:25 utc | 232
You’re right and because the US is in the process of loosing reserve currency status due to BRICS etc. it is forced to look for alternative incomes otherwise it’s toast.

Posted by: Zet | Apr 4 2025 0:01 utc | 278

Trump’s ‘Reciprocal Tariffs’ Escalate Economic War Against The World
https://www.wsws.org/en/articles/2025/04/03/jziz-a03.html
“The tariff measures are not just a preparation for war – they are certainly that and in earlier times could have been considered an act of war.
Today, the line between the states of war and peace are blurred as the war on the economic front is tied directly to the expansionist drive of US imperialism – the threat to make Canada the 51st state, the ongoing operations to take over Greenland, and the increased bombing of the Houthis in Yemen, to name just a few.”

Posted by: John Gilberts | Apr 4 2025 0:10 utc | 279

juliania | Apr 3 2025 23:06 utc | 274–
Thanks for your earlier replies. I wrote and published a short note, “The TTT–Trump’s Tariff Travesty”, that’s more an advertisement for the two most informative chats on the subject I saw today than an analysis. I can’t recall who said this over the last 48 hours, paraphrased: “Trump seems to be doing all he can to turn America into the world’s #1 rogue nation.” His actions have certainly caused nations to gather together in collective defense, which also further empowers BRICS. IMO, by next Friday a judge somewhere will issue an injunction on all the tariffs pending a suit(s) as to their constitutionality.

Posted by: karlof1 | Apr 4 2025 0:30 utc | 280

Posted by: karlof1 | Apr 4 2025 0:30 utc | 279
##############
America is already a rogue nation. It has started its second “Christian” Zionist genocide last week.
We talk about economics and ignore slaughter and human misery.
America could be swallowed by a black hole, and the entire planet would be better off.

Posted by: LoveDonbass | Apr 4 2025 0:34 utc | 281

It looks like the US imperialist’s dream hit list with blatantly racist overtones. It seems that western countries (people with white skin) get off with light tariffs while developing, poorer and global south nations (people with darker skin) get hit hard.
McKinley 2.0

Posted by: George | Apr 4 2025 0:41 utc | 282

Is Trump a Symptom or Actor of Change?
https://www.youtube.com/watch?v=jyoCkSph5sM
Prof Radhika Desai: “Can Trump tariffs actually fix the US economy?”
Nope. Trumpty-Dumpty had a great fall…etc

Posted by: John Gilberts | Apr 4 2025 0:44 utc | 283

I am beginning to see the Trump’s tariffs as another Gaza Riviera gambit that will never be fully implemented after the initial efforts crash global economies….a gambit in the war being fought over public/private finance.
Trump is the face of centuries old global private finance who want to maintain control entirely or at some level of survival. The control of global finance is still quite strong and highly integrated, the latter which is being challenged. I see the BRICS+ tools of cross border/national currency settlement possibly bypassing some of Trump’s tariffs and expect the usage of such tools to grow.

Posted by: psychohistorian | Apr 4 2025 0:45 utc | 284

An alternate view from Australia
Never look a gift horse in the mouth
An excellent read.

Posted by: LoveDonbass | Apr 4 2025 0:48 utc | 285

It’s amazing how Trump appears to be a copycat President McKinley with his blatant imperialism, USA first policies, and introduction of tariffs, except McKinley was actually nicer towards the people he met, even his assassin.

Posted by: George | Apr 4 2025 0:54 utc | 286

I think americans are about to stop taking China forgranted.
Modern life cant exsist without the billion little plastic widgets that China makes and supplys so effecintly all most invisibly.
It would take ten years to establish a replcement manufactue base in the US.
Thats not going to happen.
For the above reason alone i think this tariff scam of trumps will last days not months.
And they must know that !
So its yet another fake diversion from failure in ukraine, mass murder in Gaza and a soon to be war with Iran.

Posted by: Mark2 | Apr 4 2025 1:05 utc | 287

Israel Scrambles To Blunt Trump Import Tariffs as Stocks Slip
https://www.ynetnews.com/business/article/ryg29ria1g
“Officials rush to contain fallout from US president’s new trade policy, pointing to flawed trade data and initiating urgent talks to protect vital sectors.”
Watch for coming ‘carve outs’.

Posted by: John Gilberts | Apr 4 2025 1:05 utc | 288

“An alternate view from Australia”
Posted by: LoveDonbass | Apr 4 2025 0:48 utc | 284
As it is the country I am from the best thing is that Australians are finally realizing they cannot rely on the US with the defence pacts such as Anzas. There is also a lot of questioning going on over the 5 EYES relationship as well as AUKUS. As to whether the government (coming up for federal elections next month) or opposition party can give up their US sycophancy is another matter, but there is more historical chance of that happening with Labor and not the Liberal party. The trouble is that he Deputy Labor leader Marles might as well be an American he is so ready to run to do anything for them, and Australia has stupidly bought F-35s that maybe useless if the country moves away from US defence agreements. One thing is certain however is that Australia cannot afford (literally and economically) to make China its enemy for the sake of Donald Trump et al.

Posted by: George | Apr 4 2025 1:14 utc | 289

“I think americans are about to stop taking China forgranted”.
Posted by: Mark2 | Apr 4 2025 1:05 utc | 286
Last time around Trump’s tariffs levelled at China failed and Americans imported more Chinese goods than ever. So I think you are right and I would agree with you.

Posted by: George | Apr 4 2025 1:20 utc | 290

Thanks, karlof1. I’m not an economist nor much of an historian, but what Wolff and Hudson said about the McKinley era made sense to me in light of the biography I read. It’s very easy to have sympathy for individuals in office but policy and international stability are another thing all together – I will be just reading from now on as far as commenting on these subjects but I thank you for all you do. Stay well, get plenty of rest. (That goes for b as well)

Posted by: juliania | Apr 4 2025 1:20 utc | 291

Sorry, meant to comment to karlof1 | Apr 4 2025 0:30 utc | 279 in my last post.

Posted by: juliania | Apr 4 2025 1:22 utc | 292

Predatory trading has destroyed American industrial centers in Buffalo, Lackawanna, Detroit, South Chicago, South Bend, Johnstown, Youngstown, Bethlehem, Burns Harbor, Baltimore, Sparrows Point, Dunkirk, Cleveland, and Pitt, etc., etc. get the picture now? Millions of jobs lost across the fruited plain.
US tariffs on these predatory traders are above board and fair.
Posted by: tobias cole | Apr 3 2025 14:29 utc | 113
Quit trying to lay the blame for the rust belt on foreigners. The steel mills of the mid-west and associated industries were neglected for decades while your competitors invested heavily in better technologies and modern processes.
Steel mills became prime targets for leveraged buyouts in the 1980’s and the new owners shut down the mills, fired everyone, refused to pay union benefits and pensions, sold off any company assets worth anything then redeveloped the sites into condominiums and shopping malls.
Blame your own rotten capitalist culture for your misfortunes. Ticks and leeches.

Posted by: HB_Norica | Apr 4 2025 1:58 utc | 293

Tariffs I remember them, growing up[ in Aotearoa NZ tariffs on any imported goods were high although there was a little reciprocity with joints like england & Australia, particularly for vehicles, where OZ & england had somewhat lower tariffs on their vehicles especially if they came into NZ as CKD (completely knocked down. I’m not kidding about this, the cars would be assembled in Oz england or wherever then & I’m not kidding about this, taken apart in Oz england or wherever & everything packed into a wooden crate, so that when it came to NZ the crates would be sent off to morris, ford or humber’s kiwi ‘factory’ to bne ‘manufactured’ ie put back together.
As well as tariffs we also had big mobs of import restrictions. Having the money to buy say $20,000 worth of jeans from say Mexicol was not enough. If you wanted to import a mob of jeans you also needed a thing called an ‘import license’.
These were not easy to get as most got rolled over year to year so the jeans importer would need to use some other character’s license. That someone had probably given up importing stuff for himself as he was making more money renting out his license. The jeans buyer would have to pay $20,000 to the bloke with the license just for the right to use it that year, so straight away the cost of the goods has increased by 100% and the importer hasn’t even added in freight charges, import duty (a license just gives you permission to import, tariffs are still payable).
Of course the net result of this was incredibly expensive imported goods, therefore many small manufacturing plants were set up to make everything from golf balls to spark plugs in NZ.
Seems like a win but of course even NZ manufactured goods were expensive and worse in many instances kiwi made champion spark plugs or slazenger gold balls were simply not as good as the overseas manufactured ones, where production capacity was large enough to have good quality control etc.
The other positive was that kiwis became ingenious at fixing & making stuff. Many stories about ‘all you need is a chunk of number 8 fencing wire and a brain’.
It worked, sorta, for so long because back then land and houses were ultra inexpensive, as was food. Clothes made in NZ outta kiwi wool were also inexpensive, cotton from India in the main was also reasonably priced although there werer issue eg denim jeans faded to an awful purple colour.
Of course a black economy developed as people smuggled stuff. Just about everyone who went overseas always returned with a portable television, digital organiser, camera plus anything else which took their fancy. They would mostly claim they owned that stuff when they left so no duty or any of that nonsense was payable. Naturally everything was sold through newspaper classifieds etc.
NZ was fortunate because there were only limited entry ports, so it was vaguely controllable but amerika has the history of prohibition which indicates that tariff dodging will soon become a major element of the black economy there. Yep I can see it now people shooting each other over a load of toasters! Crazy.
Eventually I’ve no doubt there will be some manufacturing but the side effects of this will be brutal for the average Jo/Joe. I couldn’t give a toss about the market ‘crash’ it is desperately in need of a much larger correction than tariffs will inspire.
The relationship between share prices and share earnings ie dividends, has been askew for decades, as most ‘investors’ are actually speculators more interested in the appreciation of the share price than they are in the profit generating potential of the corporation they have bought shares in.
This will be tough on people whose income is dependent upon some dodgy financial investment that has been made incautiously, based on their record of picking good ‘uns or whatever, but it is going to be worst of all for ordinary working people who earn just enough to feed themselves & their families, plus keep a roof over their heads, cos’ they aren’t gonna be able to cop a big enough raise to cover the cost of all the price increases. Believe me when I say that everyone including domestic manufacturers not subject to tariffs is gonna jack up their prices.

Posted by: Debsisdead | Apr 4 2025 2:08 utc | 294

Oops! sorry bout all the typos in #294 but I got bored whilst sub-editing & above is the result.

Posted by: Debsisdead | Apr 4 2025 2:11 utc | 295

https://www.youtube.com/watch?v=TDvSNXAUwm8
Alexander Mercouris has a sane preliminary analysis of Trump’s “Liberation Day.”
Essentially, he is saying the US economy was heading into the shitter before Trump came to power. He is correct – this blog has been the seat of similar views.
I cannot believe that the team behind Trump does not know tariffs will have an immediate depressive effect. Something else is going on.
The idea of the “controlled demolition” is one I won’t discard, nor the possibility that this is a deliberate tanking of the market to purge the overleveraged globalists. I won’t pretend to know what will happen in the long run, but I expect there is much more to unfold that may surprise the experts.

Posted by: Activist Potato | Apr 4 2025 2:23 utc | 296

To #208: Trump doesn’t have an MBA from Wharton. In 1964 he enrolled in Fordham University in New York City for his first two years of college. He then transferred to University of Pennsylvania for his junior and senior years, graduating in 1968 with a BS in economics.

Posted by: susan mullen | Apr 4 2025 2:40 utc | 297

Pfft…
BS.
Who gives a $$h!ttt… this is all globalists and Trump haters and the standard Anti-American horde.
Screw them all.
The US is big enough, we don’t need the rest of the World. We’ll be just fine.
The he!!! with the EU and the UK… and the UK globalist financial aristocracy.
We’ll be friend with Russia and hold China’s mercantilist -and totalitarian- class in check.
No more American Elites being bought out by foreigners…. America for America, Russia for Russia… and you wanna sell Bimmers in America? Make them in North Carolina.
Give it up people… when you pick on America you’re picking on the wrong side.. you should be picking on the UK financial aristocracy.. and the EU.

Posted by: tonyE | Apr 4 2025 4:06 utc | 298

Interesting, there’s a WH released list of tariff exempted products and countries. The list contains more than 2000 products or product codes. AI Grok:

The White House announced exemptions to Trump’s April 2, 2025, universal tariffs, covering steel, aluminum, autos, copper, pharmaceuticals, semiconductors, lumber, critical minerals, energy, and USMCA goods from Canada and Mexico, which face 0% duty while non-USMCA goods face up to 25%.
Lesotho, Cambodia, and Laos are the most affected by the tariffs at 50%, 49%, and 48% respectively, due to their economic ties to Chinese investments, which the U.S. aims to target indirectly, according to experts cited by The Guardian.
Cameroon, DR Congo, and Chad are the least affected, with tariff rates of 11%, 11%, and 13%, as the policy focuses on reciprocal trade imbalances, sparing some African nations with lower trade disparities.

Posted by: unimperator | Apr 4 2025 4:13 utc | 299

24 hours and counting ….
Over two trillion dollers wiped of the price of american stocks and shares.
World wide sales of pop corn rise.

Posted by: Mark2 | Apr 4 2025 5:27 utc | 300

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