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republicansaredomesticterrorists · 7 days ago

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“WASHINGTON — President Donald Trump claimed Wednesday that sky-high new taxes on imported goods would be “reciprocal,” meaning they were payback for tariffs other countries have slapped on U.S. exports.

But the reciprocal tariffs turned out not to be based on actual levies imposed by other countries. Instead, they’re based on a formula made up by the White House ― and widely mocked by experts.

Douglas Holtz-Eakin, a conservative economist American Action Forum and former director of the Congressional Budget Office, called it “malpractice” in response to another conservative economist who called it “embarrassing.”

The formula, which resulted in wildly different tariffs for various foreign countries, including several uninhabited islands, first came to wide attention thanks partly to analysis by an anonymous social media user who reckoned the percentage rate of the tariffs matched other countries’ trade surpluses with the U.S. divided by their exports. The journalist James Surowiecki also noticed the correlation.

“They didn’t actually calculate tariff rates + non-tariff barriers, as they say they did,” Surowiecki wrote. “Instead, for every country, they just took our trade deficit with that country and divided it by the country’s exports to us.”

In other words, the supposedly reciprocal tariffs, which are supposed to combat arbitrary foreign barriers to U.S. goods, are themselves based on an arbitrary formula.

In a response on X, the website formerly known as Twitter, White House spokesman Kush Desai called the analyses “incorrect” and pointed to a fuller explanation of the formula from the U.S. Trade Representative, which claimed that other countries’ “non-tariff policies” cause them to sell more goods to the U.S. than we sell back to them.

“If trade deficits are persistent because of tariff and non-tariff policies and fundamentals, then the tariff rate consistent with offsetting these policies and fundamentals is reciprocal and fair,” the USTR said on its website, which included a seemingly more complicated math equation and several academic citations.

Alan Cole, an economist with the Tax Foundation, said he suspected Desai didn’t really understand the equation.

“So they thought, ‘Our thing is more complicated and smarter-looking than that. It has more fancy Greek letters. It can’t possibly just be a very, very simple division,’” Cole told HuffPost. “After you cancel it out, it’s the same formula.”

Still, Trump has long claimed that trade deficits are inherently bad, and the formula could be said to reflect his zero-sum view of global trade, in which U.S. consumers are getting ripped off if they spend more on products from abroad than people in foreign countries spend on goods made in the U.S.

“Our country has been looted, pillaged, raped and plundered by nations near and far, both friend and foe alike,” Trump said Wednesday.

Trump has talked about using tariffs as leverage against Canada, Mexico and China to stop the flow of fentanyl into the U.S., and he’s said the U.S. would be better off if Americans made more of their own products. He’s also said tariffs should be a more significant source of revenue for the U.S. government.

Cole noted that the U.S. purchases a lot of consumer goods that are made more cheaply in other countries and that the outgoing dollars are often reinvested in American companies and government debt, rather than simply hoarded by foreigners. He questioned the wisdom of trying to upend the global order by making it more expensive for Americans to buy clothing and electronics made in Indonesia, for example.

“The U.S. is this hub for all sorts of investment, and people love our financial assets, and they have to give us goods in exchange, and that’s kind of how the world’s been working for a long time, and that’s why we’ve run a trade deficit,” he said. “Why should Americans be sewing shirts together, for example? A huge fraction of these tariffs are based on bilateral trade imbalances with Southeast Asia, where they’re good at making textiles.”

Since the tariffs are paid by U.S. importers who can raise prices to recoup all or part of the cost of the tariffs, Trump’s “liberation day” announcement this week could be tantamount to the largest tax increase on U.S. consumers in decades. At the same time, economists have said the tariffs could increase price inflation and slow economic growth, potentially even throwing it in reverse and triggering a recession.

“This has to be one of the biggest unforced economic policy errors in US history,” wrote David Beckworth, an economist with the Mercatus Center, a right-leaning think tank.

The Nobel-Prize-winning liberal economist Paul Krugman called the crudity of the “reciprocal” tariffs formula shocking.

Big money interests are running the government — and influencing the news you read. While other outlets are retreating behind paywalls and bending the knee to political pressure, HuffPost is proud to be unbought and unfiltered. Will you help us keep it that way? You can even access our stories ad-free.

“When the fate of the world economy is on the line, the malignant stupidity of the policy process is arguably as important as the policies themselves,” Krugman wrote. “How can anyone, whether they’re businesspeople or foreign governments, trust anything coming out of an administration that behaves like this?”

Another explanation for the tariffs is that Trump is simply using a power that Congress has delegated to the White House and nobody can stop him.

“Tariffs are a tool the president enjoys because it’s personal power,” Rep. Ryan Zinke (R-Mont.), who served as interior secretary during the first Trump administration, told HuffPost this week. “It’s personal ― he doesn’t have to go through Congress. He can exercise personal power.”

#tariff asshole #republican assholes #maga morons #traitor trump #crooked donald #republican hypocrisy #traitor #resist #republican values #republican family values #it’s not a zero sum game you orange bastard #trump’s people have no idea what their doing #amateur hour #Republican clown show #stock market drop #recession #global market disruption

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progressivepower · 8 days ago

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Via James Surowiecki

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justinspoliticalcorner · 7 days ago

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Arthur Delaney at HuffPost:

WASHINGTON — President Donald Trump claimed Wednesday that sky-high new taxes on imported goods would be “reciprocal,” meaning they were payback for tariffs other countries have slapped on U.S. exports. But the reciprocal tariffs turned out not to be based on actual levies imposed by other countries. Instead, they’re based on a formula made up by the White House ― and widely mocked by experts. Douglas Holtz-Eakin, a conservative economist American Action Forum and former director of the Congressional Budget Office, called it “malpractice” in response to another conservative economist who called it “embarrassing.” The formula, which resulted in wildly different tariffs for various foreign countries, including several uninhabited islands, first came to wide attention thanks partly to analysis by an anonymous social media user who reckoned the percentage rate of the tariffs matched other countries’ trade surpluses with the U.S. divided by their exports. The journalist James Surowiecki also noticed the correlation. “They didn’t actually calculate tariff rates + non-tariff barriers, as they say they did,” Surowiecki wrote. “Instead, for every country, they just took our trade deficit with that country and divided it by the country’s exports to us.” In other words, the supposedly reciprocal tariffs, which are supposed to combat arbitrary foreign barriers to U.S. goods, are themselves based on an arbitrary formula. In a response on X, the website formerly known as Twitter, White House spokesman Kush Desai called the analyses “incorrect” and pointed to a fuller explanation of the formula from the U.S. Trade Representative, which claimed that other countries’ “non-tariff policies” cause them to sell more goods to the U.S. than we sell back to them. “If trade deficits are persistent because of tariff and non-tariff policies and fundamentals, then the tariff rate consistent with offsetting these policies and fundamentals is reciprocal and fair,” the USTR said on its website, which included a seemingly more complicated math equation and several academic citations. [...] Cole noted that the U.S. purchases a lot of consumer goods that are made more cheaply in other countries and that the outgoing dollars are often reinvested in American companies and government debt, rather than simply hoarded by foreigners. He questioned the wisdom of trying to upend the global order by making it more expensive for Americans to buy clothing and electronics made in Indonesia, for example. “The U.S. is this hub for all sorts of investment, and people love our financial assets, and they have to give us goods in exchange, and that’s kind of how the world’s been working for a long time, and that’s why we’ve run a trade deficit,” he said. “Why should Americans be sewing shirts together, for example? A huge fraction of these tariffs are based on bilateral trade imbalances with Southeast Asia, where they’re good at making textiles.” Since the tariffs are paid by U.S. importers who can raise prices to recoup all or part of the cost of the tariffs, Trump’s “liberation day” announcement this week could be tantamount to the largest tax increase on U.S. consumers in decades. At the same time, economists have said the tariffs could increase price inflation and slow economic growth, potentially even throwing it in reverse and triggering a recession.

47’s using an arbitrary formula to determine which nations got the baseline 10% and which got higher illustrates how insane his broad-based tariff policy is.

#Taxes #Tariffs #Donald Trump #Trump Administration II #Executive Order 14257 #Trade

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dreaminginthedeepsouth · 8 days ago

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Tariffs

* * * *

LETTERS FROM AN AMERICAN

April 2, 2025 (Wednesday)

Heather Cox Richardson

Apr 03, 2025

Just five months ago, on October 19, 2024, The Economist ran a special report on America’s economy. That economy was, the magazine said, “the envy of the world.” Today, stock market futures plummeted after President Donald J. Trump announced that he will impose a 10% tariff on all imports to the United States, with higher rates on about 60 countries he claims engage in unfair trade practices, including China, Japan, Vietnam, and South Korea, as well as the European Union.

Dow Jones Industrial Average futures lost more than 1,000 points upon the news, falling by 2.5%; the S&P 500 dropped 3.6%.

Trump’s erratic approach to the economy had already rattled markets, which dropped significantly in the first quarter of this year, and consumer confidence, which recently hit a twelve-year low. Trump waited until the stock market had closed today before he announced the new tariffs. Then, in a speech in the White House Rose Garden, he said: “For decades, our country has been looted, pillaged, raped and plundered by nations near and far, both friend and foe alike. But it is not going to happen anymore.” Instead, he said, tariffs would create “the golden age of America.”

“Never before has an hour of Presidential rhetoric cost so many people so much,” former treasury secretary Lawrence Summers posted. “The best estimate of the loss from tariff policy is now [close] to $30 trillion or $300,000 per family of four.” “The Trump Tariff Tax is the largest peacetime tax hike in U.S. history,” posted former vice president Mike Pence.

Trump claims he is imposing “reciprocal tariffs” and says they are about half of what other countries levy on U.S. goods. In fact, the numbers he is using for his claim that other countries are imposing high tariffs on U.S. goods are bonkers. Economist Paul Krugman points out that the European Union places tariffs of less than 3% on average on U.S. goods, while Trump maintained its tariffs are 39%.

Krugman said he had no idea where that number had come from, but financial journalist James Surowiecki figured out that the White House “just took our trade deficit with [each] country and divided it by the country’s exports to us.” He called it “extraordinary nonsense.” Washington Post economic writer Catherine Rampell posted that she was reluctant to amplify Surowiecki’s theory that the tariff rates were based on such a “dumb calculation,” but then the Office of the U.S. Trade Representative confirmed it.

Certain observers in business had apparently persuaded themselves that Trump didn’t really intend to raise tariffs very much and that his many vows to do so were simply rhetoric, since economists agree that tariffs are a tax on consumers and will raise inflation and slow down growth. Today’s tariffs are higher than expected, and business leaders are alarmed.

JPMorgan tonight said that they “view the full implementation of these policies as a substantial macro economic shock not currently incorporated in our forecasts” and that “these policies, if sustained, would likely push the US and global economy into recession this year.”

Economist Brad Setser of the Council on Foreign Relations agreed. He told David J. Lynch and Jeff Stein of the Washington Post: “In the short run, the effect is probably a recession. It’s going to raise the price of so many goods that can’t be made in the United States…. In the long run, it’s a vision of the U.S. that is very isolated from the world.”

But not from every other country. While Trump imposed tariffs on Australia’s remote Heard and McDonald Islands, which are uninhabited except by wildlife like seals and penguins, it did not put tariffs on Russia. A different financial shift lifted sanctions against senior Russian negotiator Kirill Dmitriev, to permit him to travel to Washington, D.C., today to meet with U.S. special envoy Steve Witkoff for what Alex Marquardt, Jennifer Hansler, and Alayna Treene of CNN refer to as “talks on strengthening relations between the two countries as they seek to end the war in Ukraine.”

Senator Chris Murphy (D-CT) noted tonight that the tariffs make no economic sense because “[t]hey aren’t designed as economic policy. The tariffs are simply a new, super dangerous political tool.” Murphy suggests they are a way to make private industry dependent on the president the same way he has tried to make law firms and universities dependent on him. Industries and companies “will need to pledge loyalty to Trump in order to get sanctions relief.”

Murphy warns that “[t]he tariffs are DESIGNED to create economic hardship…[s]o that Trump has a straight face rationale for releasing them, business by business or industry by industry. As he adjusts or grants relief, it’s a win-win: the economy improves and dissent disappears.”

There is also Trump’s apparent fascination with President William McKinley, who held office from 1897 to 1901, at a time when high tariffs concentrated wealth in the hands of industrialists while workers and farmers, as well as their families, faced injury, hunger, and homelessness from dangerous working conditions, low wages and commodity prices, and seasonal factory closings.

Trump has frequently claimed those years were the nation’s wealthiest, and today he helped to explain his focus on that era when he referred to the 1913 Revenue Act, a law that has angered the right wing for decades. That act began the process of replacing the high tariffs of the late nineteenth and early twentieth centuries with an income tax, thus shifting the burden of funding the treasury from ordinary Americans through tariffs to wealthier Americans through the income tax. At least some of Trump’s tariff plans seem tied to his enthusiasm for tax cuts on wealthy individuals and corporations.

But in trying to reestablish the financial patterns of the late nineteenth century—patterns that led to profound economic instability in the U.S., including economic crashes—Trump is undermining the system of global trade that has fostered international cooperation since World War II. CNN global economic analyst Rana Foroohar told CNN’s John Vause: “This is Trump saying…I am going to overturn globalization as we’ve known it.” She added: “I’m hoping it doesn’t push the U.S. and the world into recession.”

Josh Marshall of Talking Points Memo makes the important point that “Presidents have no inherent power over tariffs whatsoever.” The Constitution gives to Congress, not the president, the power to impose tariffs. But the International Emergency Economic Powers Act allows the president to impose tariffs if he declares a national emergency under the National Emergencies Act, which Trump did today, declaring a ��national emergency to increase our competitive edge, protect our sovereignty, and strengthen our national and economic security.”

That same law allows Congress to end such a declaration of emergency, but so far, Republicans have declined to do so. Today the Senate rebuked Trump by passing a resolution to block his tariffs on Canadian products, with four Republicans—Susan Collins (ME), Mitch McConnell (KY), Lisa Murkowski (AK), and Rand Paul (KY)—joining Democrats to pass the resolution. House speaker Mike Johnson (R-LA) is unlikely to take the measure up.

LETTERS FROM AN AMERICAN

HEATHER COX RICHARDSON

#Heather Cox Richardson #tariffs #Letters From An American #congress #National Emergencies Act #Russia Russia Russia #allies #William Mckinley

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talkstothemoonandstars · 8 days ago

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Trump’s tariff numbers appear to have been calculated through a simple math formula, which works with every single country on the list

The formula used to calculate President Donald Trump’s new batch of tariffs announced Wednesday is based on dividing the U.S.’s trade deficit with a given country divided by their total exports to the U.S. A memo from the office of the U.S. trade representative acknowledged this was the methodology used because it was too “complex, if not impossible” to calculate the full extent of each country’s U.S. trade policies.

The Trump administration implemented widespread reciprocal tariffs on countries all over the world Wednesday in an effort to fight back against what it said were unfair trade practices that hurt American businesses and the economy at large.

To calculate the tariffs it decided to impose on countries around the world, the White House used a formula that focused on trade deficits and total exports. The formula didn’t include an assessment of tariff rates for specific products in individual countries, or take into account other trade barriers that weren’t tariffs.

Instead, the reciprocal tariff rate applied to each country was: their trade deficit divided by exports to the U.S., divided by two.

If the country has a trade surplus with the U.S., or the number resulting from the above formula was less than 10%, then a flat rate of 10% was applied.

For example, the U.S. has a $235.6 billion trade deficit with the European Union, which exports a total of $605.8 billion to the U.S. Based on the White House’s formula, $235.6 divided by $605.8 equals 0.388, which divided by half is 0.194. That number gets rounded up to 0.2, which leads to a 20% tariff rate.

“The blind application of such a simple formula ignores so much nuance,” Dominic Pappalardo, chief multi-asset strategist at Morningstar Wealth, told Fortune in an email.

Journalist James Surowiecki first pointed out this was the formula the Trump White House was using in an X post published a little over two hours after the tariffs were announced.

When reached for comment, a White House spokesperson pointed Fortune to a statement from the office of the U.S. trade representative explaining the formula.

The U.S. trade representative’s office, which played a major role in Trump’s tariff policy, said this was the formula it used. It also acknowledged the difficulty of calculating reciprocal tariff rates based on a detailed analysis of each country's trade barriers.

“While individually computing the trade deficit effects of tens of thousands of tariff, regulatory, tax and other policies in each country is complex, if not impossible, their combined effects can be proxied by computing the tariff level consistent with driving bilateral trade deficits to zero,” the statement from the trade representative’s office read.

“Reciprocal tariffs seem to be entirely based on the size of the bilateral trade deficit in goods in 2024. It is not obvious that anything else made a difference,” Deborah Elms, head of trade policy at think tank the Hinrich Foundation, told Fortune earlier........

This measure is also backward-looking and doesn’t take into account any preemptive efforts certain countries may have taken to balance trade with the U.S. “The calculation represents a single point-in-time snapshot,” Pappalardo said.

For example, Vietnam had promised to further cut any customs duties on U.S. goods and to buy more of them in an effort to stave off any tariff hikes. Instead, the southeast Asian country, which is a hub of manufacturing, got slapped with 45% tariffs. The U.S. is Vietnam’s largest export market and a tariff of that size would cripple its ability to sell goods in the country.

A blanket formula that doesn’t take into account the specifics of each country’s trade policy—which is often a series of complex, interlocking regulations that include highly detailed rules for each sector of the economy—risks upsetting global trade by stymying the flow of critical goods countries can only access through their trading partners. Instead, they create roadblocks for other countries to enter the U.S., which is the world’s biggest economy.

“There are strong fundamental and economic reasons to import certain goods from outside the U.S.,” Pappalardo said. “This formula totally ignores that concept. These reasons include local availability of natural resources, cost of production and skill gaps among others. In other words, certain countries are much better suited to produce some goods than others, but all goods are treated the same in the blanket application of this approach.”

These new policies would raise the U.S’s tariff rate across the board by almost 10%, which could tilt the global economy toward recession, according to a research note from Fitch Ratings.

"The U.S. tariff rate on all imports is now around 22% from 2.5% in 2024. That rate was last seen around 1910," Fitch wrote in its report. "This is a game changer, not only for the US economy but for the global economy. Many countries will likely end up in a recession. You can throw most forecasts out the door, if this tariff rate stays on for an extended period of time."......

“Previously announced measures had increased the U.S. average tariff rate to 11%, the highest since the 1940s,” Seema Shah, chief global strategist at investment firm Principal Asset Management, wrote in an email. “Yesterday’s announcement raised the tariff rate even further to around 24%, the highest since 1908, and was meaningfully more aggressive than the broad market had expected.”

During his speech in the White House’s Rose Garden on Wednesday, Trump said he was being “kind” by only hitting countries with half the tariffs he believes they impose on the U.S. However, since the tariff rates are based only on a calculation of the U.S.’s trade deficit with a given country and do not include other trade barriers, even the halved tariff rate represents an extraordinarily high levy on foreign goods. One that will almost certainly have knock-on effects for the U.S., as the rest of the world retaliates.

#trump is an idiot #we're doomed #recession for everybody!#the great depression all over again

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moontyger · 7 days ago

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I do find it darkly funny—look we have to laugh, right?—that we’ve spent the last month or so embroiled in another round of debate and speculation about whether super-intelligent AI is on our doorstep, and asking probing questions like “Will an AI emerge so powerful that it will utterly transform the world as we know it, throwing millions out of work, or worse??” only to see the White House use AI in a way that risks doing precisely that, but in a way that can only be described as super-dumb.

You may have seen the gist of this explained already, so I’ll keep the recap brief: Basically, when Trump announced the tariff rates at one of his typically meandering press conferences, analysts were pretty stunned by how large and punitive they were, and by the fact that the figures didn’t seem to make much sense. That is, until the finance journalist James Surowiecki figured out that the Trump admin hadn’t calculated tariff rates at all, as they said they had, and had instead just taken the US trade deficit with a given country and divided it by that country's exports to the US. This, as Surowiecki put it, is “extraordinary nonsense.”

And how might the Trump administration have come to decide that this extraordinary nonsense was in fact a good way to craft global trade policy? Well, it looks like AI chatbots told them it was! The basic formula Surowiecki ID’d was, as the VC and AI advocate Krishnan Rohit and others pointed out, the very formula that every major AI chatbot suggested when asked “how to impose tariffs easily.”

Others, including yours truly, have replicated the results.

Now, the Trump administration will probably not admit to using a chatbot to create tariff policy that has sent markets tumbling in what are now the worst days of trading in years (the Dow is down 1,600 points at time of writing). But it more than fits the bill; the Trump administration, after all, is reckless, impatient, and high on American-made AI. And it would be tempting to answer the question of why Trump’s team turned to AI for such a momentous task with ‘because it was there’ or ‘because they could and they are lazy’ and leave it at that, even if that probably gets you most of the way there.

But there’s another factor, and it is related directly to OpenAI finalizing that massive infusion of cash earlier in the week: The AI industry has rather relentlessly been touting its products’ awesome power and capabilities for years, and, as we’ll see below, that promotion has been especially acute in recent months. If one of Elon’s DOGE lackeys was told to come up with tariff rates for Trump’s big Liberation Day announcement, he would probably consider the technology perfectly capable of calculating them. (Observers like

Paul Krugman point out that the equations and explanations the Trump admin shared as proof it did in fact calculate the rates seem quite rushed.) We’re a couple of years away from all-powerful AI systems! Surely AI can spit out some tariff rates.

This is actually a pretty great example of the kind of assumptions commercial AI systems encourage—they’re sold as ultra-powerful, or about to become so, and thus many users are prone to over-index on their capabilities. They encourage laziness, or “cognitive offloading” as researchers more diplomatically put it, and deter critical thinking (like the kind that might lead one to ask whether it is a good idea to impose tariffs on uninhabited islands). They’re adept at tasks that require ‘good enough’ output—say, producing marketing email copy, images for corporate power point slides, or tariff rates to be printed out in very small font on a poster board to be gestured at by a guy who really just wants to stand at a podium in front of the cameras and hear himself talk for an hour.

The bottom line is that the AI industry has created a permission structure for use cases like this one, with its “incredibly capable” AI systems, and AGI just on the horizon. (And what’s more, I’d take odds that the staffer or intern or DOGE employee or whoever did this may successfully be lobbying to keep his job right now on the grounds that well it was the AI that did this, not me! Because AI can also be used as an accountability sink!)

Look, I’m begging people to take this all-time example and look at the yawning gulf here—between the marketing promises of the always latent “all powerful AI that benefits all of humanity” and the reality of “White House intern uses ChatGPT to generate trade policy that might cause a global recession.” Predicted benefits, and proven harms, to paraphrase the scholar Dan McQuillan. We cannot blame this disaster on AI itself—it is, of course, also an enormous user error. But still: This is how AI is being used, in practice! This is what AI is delivering us, right now! It’s being used by the cruelest and laziest people—who may or may not actively want to crater the US economy in the hopes that it consolidates their power—to automate critical decision making.

#US politics #current events #tariffs #AI

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bluesturngold · 8 days ago

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there are way more slides btw!

here are some additional notes:

the white house has clarified that the tariff on goods from china as listed here is in addition to an already existing 20% tariff, so their total tariff amount is 54%

"tariffs charged to the USA" is a totally misleading/incorrect/dishonest title for the figures listed under that column. instead, they calculated the rate by taking the USA's trade deficit with the country and dividing it by the country's exports to us. an example posted by james surowiecki on twitter: the USA has a $17.9 billion trade deficit with indonesia, and they export $28 billion to the USA. that 17.9 figure divided by 28 = 64%, which they're claiming is the tariff rate indonesia charges the USA. (sorry for linking the new york post, they're a garbage right-wing rag, but i haven't found other articles for this bullet point yet. i've seen enough credible reports about the white house confirming it from journalists on social media to believe it though)

trump also signed an executive order getting rid of the de minimis tax exemption, which allows shipments to the USA containing under $800 of goods (per person, per day) to enter duty and tax free. it's a big part of how the USA has been able to get such wide access to so many unethically cheap goods manufactured elsewhere

for those who want to view the list of tariffs in text format for accessibility reasons, here's a newsweek article that lists them

HAHAHAHAHAHAHAHA

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multipolar-online · 7 days ago

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AS TARIFAS DE TRUMP FRACASSARÃO. VEJA OS MOTIVOS

Trump impôs altas tarifas a muitos países, chamando-as falsamente de "recíprocas". Suas políticas contraditórias prejudicarão a economia dos EUA, alimentarão a inflação e não reindustrializarão - mas beneficiarão as elites ricas

Ben Norton 4 de abril em Geopolitical Economy Report

Em seu primeiro mandato como presidente dos Estados Unidos, Donald Trump lançou uma guerra comercial contra a China. Em seu segundo mandato, ele expandiu essa guerra comercial para muitos países ao redor do mundo.

Em uma cerimônia fora da Casa Branca em 2 de abril, que o presidente dos EUA apelidou de "Dia da Libertação", Trump anunciou novas tarifas abrangentes sobre dezenas de países, incluindo altos impostos sobre as importações dos principais parceiros comerciais dos EUA: 54% sobre a China, 46% sobre o Vietnã, 25% sobre a Coreia do Sul, 24% sobre o Japão e 20% sobre a União Europeia.

Trump alegou falsamente que essas tarifas eram "recíprocas", mas na verdade eram unilaterais. A Casa Branca calculou sua taxa de imposto sobre cada nação não com base nas tarifas que cobra sobre os produtos americanos, mas sim de acordo com o déficit comercial que os Estados Unidos têm com essa nação.

Não é necessariamente surpreendente que Trump tenha expandido as tarifas dos EUA. Durante sua campanha presidencial em 2024, ele disse a apoiadores em um comício: "A palavra tarifa é a palavra mais bonita do dicionário, mais bonita que o amor, mais bonita que o respeito".

No entanto, o que foi surpreendente sobre as tarifas que Trump anunciou em 2 de abril foi o quão massivas e amplas elas eram. Eles terão um enorme impacto não apenas nos EUA, mas na economia global, e podem até causar uma recessão.

Todos os países da Terra enfrentarão uma tarifa mínima de 10%. Taxas adicionais serão cobradas dependendo do tamanho do superávit comercial de um país com os EUA.

A maneira completamente contraditória e imprecisa com que o governo Trump tentou justificar essa guerra comercial em grande parte do planeta foi um reflexo da estratégia mal concebida que a Casa Branca propôs para supostamente reviver a manufatura nos Estados Unidos, reduzir o déficit comercial crônico e criar uma nova ordem financeira internacional.

Na realidade, as táticas tarifárias de Trump provavelmente sairão pela culatra significativamente, alimentando altas taxas de inflação e falhando em reindustrializar os EUA, ao mesmo tempo em que incentivam países ao redor do mundo a acelerar sua busca por alternativas aos Estados Unidos e ao sistema do dólar.

A Casa Branca de Trump não entende sua própria fórmula tarifária

Para começar, deve-se enfatizar que a alegação do governo Trump de que as tarifas dos EUA são "recíprocas" é patentemente falsa.

O jornalista financeiro James Surowiecki enfatizou que a Casa Branca "não calculou realmente as tarifas + barreiras não tarifárias, como dizem que fizeram. Em vez disso, para cada país, eles apenas pegaram nosso déficit comercial com aquele país e o dividiram pelas exportações do país para nós". Ele chamou a metodologia de "absurdo extraordinário".

Em resposta, o vice-secretário de imprensa da Casa Branca, Kush Desai, criticou Surowiecki e escreveu: "Não, nós literalmente calculamos barreiras tarifárias e não tarifárias". (Isso é falso e ganhou um nota da comunidade corrigindo-o no Twitter.)

Desai vinculou a uma declaração oficial publicada no site do Escritório do Representante de Comércio dos EUA (USTR), explicando como as tarifas foram determinadas. Esta nota argumentou que "calcular individualmente os efeitos do déficit comercial de dezenas de milhares de políticas tarifárias, regulatórias, tributárias e outras em cada país é complexo, se não impossível" e, em vez disso, postulou que "seus efeitos combinados podem ser substituídos pelo cálculo do nível tarifário consistente com a redução dos déficits comerciais bilaterais a zero".

O USTR então publicou a fórmula que usou para determinar a tarifa. Embora empregasse letras gregas que faziam a matemática parecer complicada, na verdade era muito simples: (exportações - importações) / (0,5 x importações).

Quando a fórmula foi aplicada, a tarifa que a Casa Branca anunciou em todos os países pôde ser facilmente determinada e plotada em linha reta:

Em outras palavras, o porta-voz da Casa Branca estava errado e o jornalista Surowiecki estava certo: as tarifas do governo Trump não se baseavam nas tarifas que outros países cobram dos EUA, mas sim na balança comercial que os EUA têm com outros países.

Ou seja, por definição, elas não são "recíprocas"; elas são unilaterais e agressivas.

O que esse escândalo também mostrou é que os porta-vozes da Casa Branca não entendem a fórmula simples que foi usada para determinar a tarifa de Trump.

Ainda mais absurdo, a declaração publicada pelo Representante de Comércio dos EUA citou um artigo acadêmico que claramente não leu, porque detalhou como o comércio internacional tem sido bom para os consumidores dos EUA, reduzindo significativamente os custos das mercadorias.

Em janeiro, quando Trump ameaçou tarifas de 25% sobre os vizinhos dos Estados Unidos e os dois principais parceiros comerciais, México e Canadá, o conselho editorial do Wall Street Journal a apelidou de "a guerra comercial mais estúpida da história". Trump agora expandiu essa guerra comercial mais estúpida para a maior parte do mundo.

54% de tarifas sobre a China, 46% de tarifas sobre o Vietnã, altas tarifas sobre outros principais parceiros comerciais dos EUA

Após o "Dia da Libertação", os principais exportadores para os EUA enfrentarão tarifas muito altas.

Trump atingiu a China com tarifas de 54% (34% mais os 20% que já foram aplicados). A China é o exportador número um para os EUA, vendendo US$ 438,9 bilhões em mercadorias em 2024. As principais exportações chinesas incluem telefones, computadores, baterias elétricas, peças de máquinas, brinquedos e têxteis.

O presidente dos EUA também atacou o Vietnã com uma tarifa impressionante de 46%. O Vietnã é o sexto maior exportador para os EUA, vendendo US$ 136,6 bilhões em mercadorias em 2024. As principais exportações vietnamitas incluem computadores, telefones, móveis, semicondutores, peças de máquinas, microfones e têxteis.

A maioria dos eletrônicos importados para os EUA vem de economias asiáticas que foram seriamente impactadas por Trump.

40,7% das importações de computadores dos EUA são do continente chinês, juntamente com 27,5% do México (que enfrenta tarifas potenciais de 25%). Outros 15% vêm de Taiwan (que foi atingido com uma tarifa americana de 32%). Outros 9,42% são do Vietnã.

A Coreia do Sul, o sétimo maior exportador para os EUA, sofrerá uma tarifa de 25%.

O Japão, o quarto maior exportador para os EUA, assumirá uma tarifa de 24%.

A Alemanha é o quinto maior exportador para os EUA e enfrentará uma tarifa de 20%, que é a taxa que Trump escolheu para a União Europeia como um todo.

51,8% das importações de baterias elétricas dos EUA vêm da China continental, mais 16,6% da Coréia do Sul, 6,5% do Japão, 5,39% do México, 5,17% da Alemanha e 2,72% do Vietnã.

28,3% dos telefones importados para os EUA vêm do continente chinês, juntamente com 23,1% do México, 9,35% de Taiwan e 7,54% do Vietnã. Outros 7,03% vêm da Malásia (que foi atingida com uma tarifa dos EUA de 24%) e 5,25% da Tailândia (que enfrenta tarifas de 36%).

Como a tarifa cobrada pelo governo Trump é baseada na balança comercial que um país tem com os EUA, pequenas nações que exportam um pouco para os EUA, mas importam pouco ou nada, foram atingidas por enormes tarifas.

A Casa Branca de Trump afirmou absurdamente que o Camboja e o Laos têm barreiras comerciais de 97% e 95%, respectivamente, então enfrentarão tarifas "recíprocas" de 49% e 48%. Os EUA também acusaram Madagascar de ter barreiras comerciais de 93%, por isso suportará tarifas de 47%.

O mais ridículo de tudo foram as alegações da Casa Branca de Trump de que a pequena nação africana do Lesoto (com uma população de pouco mais de 2 milhões) e o território francês de Saint Pierre e Miquelon (com uma população de menos de 6.000) têm barreiras comerciais de 99%, então eles foram atingidos com uma tarifa "recíproca" de 50%.

A inflação está voltando nos EUA

Trump muitas vezes alegou falsamente que países estrangeiros pagarão por essas tarifas, mas isso não é verdade. São os importadores dos EUA que têm de arcar com o custo dos direitos aduaneiros, e muitas vezes repercutem esses aumentos de preços nos consumidores, o que provoca inflação. (Às vezes, a moeda de um país estrangeiro cai ligeiramente em relação ao dólar americano em resposta às tarifas, o que compensa um pouco o preço mais alto, mas não totalmente, e especialmente quando as tarifas são tão altas quanto 40-50%, quaisquer pequenas mudanças na taxa de câmbio não compensarão esse enorme choque de preços.)

Mesmo antes de Trump anunciar as novas tarifas abrangentes no "Dia da Libertação", a inflação dos preços ao consumidor estava subindo nos Estados Unidos.

A Universidade de Michigan faz uma pesquisa todos os meses estudando as expectativas de inflação nos EUA.

Essas pesquisas mostram que as empresas americanas já esperavam taxas de inflação mais altas antes do "Dia da Libertação" de Trump. Quando as empresas esperam inflação, elas aumentam os preços, alimentando a inflação.

A pesquisa da Universidade de Michigan também mostrou um grande aumento nas expectativas de inflação entre os consumidores dos EUA. Isso levou os consumidores a sair e comprar produtos agora, antes de esperar que os preços subam, contribuindo ainda mais para a inflação. (Gráficos de Joseph Politano.)

Espera-se que os preços aumentem acentuadamente não apenas para bens de consumo como telefones celulares, TVs e computadores, mas também para alimentos. Como a CNBC relatou, "os CEOs de empresas de alimentos e consumo dizem que as tarifas em uma ampla gama de países pressionarão margens estreitas em uma economia onde a inflação já está elevada".

O café é um exemplo claro. A National Coffee Association aponta que, "Como o café não pode crescer na maior parte dos Estados Unidos - apenas no Havaí e em Porto Rico - mais de 99% do café da América deve ser importado". Ele observa que os EUA importam 32% de seu café do Brasil, 20% da Colômbia, 8% do Vietnã e 7% de Honduras.

De acordo com a National Coffee Association, mais de 70% dos adultos americanos bebem café pelo menos uma vez por semana. Portanto, Trump aumentou o preço de um alimento básico apreciado pela maioria dos americanos.

A situação é ainda mais dura com frutas e vegetais. Os Estados Unidos importam cerca de 60% das frutas frescas e 40% dos vegetais frescos vendidos no país, de acordo com o Departamento de Agricultura dos EUA (USDA).

As tarifas de Trump, portanto, aumentarão significativamente o preço dos produtos nos EUA, especialmente considerando que existem muitas frutas e vegetais - como, digamos, bananas, abacates ou mangas - que não podem ser produzidos na maioria dos estados do país.

O fato de que as tarifas de Trump provavelmente levarão a altos níveis de inflação dos preços ao consumidor nos EUA é profundamente irônico, porque a principal razão pela qual Trump venceu as eleições presidenciais de 2024 foi devido às altas taxas de inflação sofridas em 2022 e 2023, após a pandemia de Covid-19.

Em todo o mundo, a maioria dos partidos no poder perdeu as eleições devido a essa inflação, que foi global e foi causada em grande parte por choques na cadeia de suprimentos e pela queda na produção de bens durante os bloqueios da pandemia.

As pesquisas mostram que o mau estado da economia foi a questão mais importante nas eleições de 2024 nos EUA, e muitos eleitores associaram o presidente democrata Joe Biden e a vice-presidente Kamala Harris à inflação. Trump explorou a insatisfação generalizada com a economia e prometeu reduzir os preços. Suas tarifas agora farão o oposto.

Objetivos potenciais das tarifas de Trump

Dados os efeitos negativos óbvios, tem havido um debate acalorado sobre quais são exatamente os objetivos de Donald Trump com essas tarifas altíssimas.

Existem quatro teorias principais sobre por que Trump está impondo essas tarifas. Essas possíveis explicações não são exclusivas e podem se sobrepor:

Ele quer reduzir o déficit em conta corrente dos EUA (o déficit comercial do país com o resto do mundo).

Ele quer reindustrializar os Estados Unidos.

Ele quer pressionar outros países a concordar com um "Acordo de Mar-a-Lago", que ajudaria os EUA a remodelar o sistema financeiro internacional (que os próprios EUA criaram) para servir ainda melhor aos seus interesses.

Ele quer usar as tarifas para substituir a receita do governo perdida devido a grandes cortes de impostos sobre os ricos e as corporações.

Reduzir o déficit em conta corrente dos EUA?

Usar tarifas para tentar reduzir o déficit em conta corrente dos EUA não faz sentido, dado o papel do dólar como moeda de reserva global (que será abordado na seção seguinte), bem como a inevitável retaliação dos parceiros comerciais dos EUA.

Se Trump acha que pode usar tarifas para zerar o déficit comercial dos EUA com cada país, ele claramente subestimou a capacidade de outros países de responder com tarifas próprias.

Se os EUA querem reduzir seu déficit comercial com outros países, por definição, precisam exportar mais para eles. Mas outras nações anunciaram que responderão às tarifas unilaterais e agressivas de Trump com direitos recíprocos reais.

Isso significa que as tarifas de Trump farão com que as exportações dos EUA para esses países caiam, mesmo que suas exportações para os EUA caiam.

A China e a União Europeia imediatamente deixaram claro que responderiam às tarifas unilaterais de Trump com suas próprias medidas recíprocas.

Além disso, os consumidores em países visados pelas ameaças tarifárias de Trump, do Canadá à França, prometeram boicotar os produtos dos EUA em protesto, o que poderia piorar ainda mais o déficit comercial ou, pelo menos, causar a queda geral do comércio.

Reindustrializar os Estados Unidos?

Em seu discurso na Casa Branca apelidando 2 de abril de "Dia da Libertação", Trump afirmou que a data "será lembrada para sempre como o dia em que a indústria americana renasceu".

No entanto, se Trump realmente quiser reindustrializar os EUA, impor tarifas ao resto do mundo não fará isso magicamente por conta própria.

Todas as economias avançadas que se industrializaram na história o fizeram com uma política industrial clara, em uma campanha de modernização industrial liderada pelo Estado, na qual o governo impulsionou o investimento em infraestrutura, educação e setores-chave da manufatura; desenvolvendo capital humano, treinando trabalhadores e fornecendo subsídios e empréstimos baratos para empresas estratégicas.

Em vez de elaborar uma política industrial coerente, Trump está impondo austeridade e corroendo a capacidade do governo, misturando Reaganomics com protecionismo.

Em vez de investir em programas de educação e treinamento profissional para a reindustrialização, Trump está assinando ordens executivas para desmantelar o Departamento de Educação.

Trump até rasgou a tentativa básica de política industrial que foi perseguida pelo governo Biden, desfazendo a Lei de Redução da Inflação (IRA) e atacando a Lei CHIPS.

Isso não vai reindustrializar os Estados Unidos. Na verdade, foi exatamente esse tipo de ideologia neoliberal que levou a economia dos EUA a ser desindustrializada em primeiro lugar.

O setor financeiro dos EUA foi desregulamentado sob Ronald Reagan na década de 1980 e depois Bill Clinton na década de 1990. Essa desregulamentação, além das novas tecnologias digitais, tornou muito mais lucrativo para os capitalistas dos EUA investir no setor financeiro, não na manufatura.

O modelo de CEOs de Jack Welch incentivou os executivos corporativos a aumentar as ações, prometendo bônus gordos para aqueles que o fizessem.

Em vez de investir na expansão da produção, as empresas americanas investiram seu lucro líquido em recompras de ações. Em 2014, a Bloomberg informou que entre as 500 maiores empresas de capital aberto nos EUA, no índice do mercado de ações S&P 500, 95% de seus ganhos foram para recomprar suas próprias ações e pagar dividendos aos acionistas.

Até que o governo dos EUA mude fundamentalmente suas políticas em relação ao setor financeiro, tribute fortemente os ganhos de capital e incentive as empresas a investir na manufatura local, eles continuarão a priorizar a especulação financeira sobre a produção tangível.

O fato de que a indústria de private equity dos EUA está florescendo é o símbolo perfeito de como os capitalistas dos EUA não querem criar uma nova empresa ou construir novas fábricas, porque é considerado muito arriscado e não lucrativo o suficiente. Eles podem obter muito mais facilmente altos retornos sobre o investimento simplesmente comprando empresas existentes, demitindo seus trabalhadores e despojando-os de ativos. Esse é todo o modelo de negócios dos infames invasores corporativos de private equity, que ficaram fabulosamente ricos na era neoliberal.

Em vez de tentar resolver esses problemas estruturais profundos, Trump está fazendo exatamente o oposto: o bilionário presidente dos EUA e a dúzia de outros bilionários de seu governo estão cortando impostos sobre os ricos e as corporações, implementando austeridade e enfraquecendo o Estado. Isso não vai reindustrializar a economia.

Um "Acordo de Mar-a-Lago"?

Outra explicação dada para as tarifas de Trump é que ele espera usá-las como alavanca para forçar os países a se sentarem à mesa de negociações para o chamado Acordo de Mar-a-Lago.

De acordo com essa ideia, Trump quer reestruturar o sistema financeiro internacional – que foi projetado pelos Estados Unidos no final da Segunda Guerra Mundial para servir aos seus interesses, mas com o qual Washington não está mais satisfeito, porque perdeu sua antiga hegemonia unipolar.

A narrativa do Acordo de Mar-a-Lago é que será um grande acordo que permitirá a Trump derrubar o dólar americano supervalorizado, forçar os "aliados" (leia-se: vassalos) a pagar pela "proteção" militar dos EUA e ajudar a reduzir a dívida federal dos EUA, ordenando que os vassalos comprem títulos do Tesouro de longo prazo (como, digamos, títulos de 100 anos) com baixas taxas de cupom. o que significa que eles perderão valor com o tempo e atuarão como uma espécie de subsídio estrangeiro para o governo dos EUA.

O homem que Trump nomeou como presidente do Conselho de Assessores Econômicos, Stephen Miran, publicou um relatório delineando uma estrutura muito vaga para um hipotético Acordo de Mar-a-Lago, que foi discutido com a respiração suspensa na imprensa financeira.

O problema com essa ideia é que os Estados Unidos terão que forçar outros países a violar seus próprios interesses em nome de Washington. Para os chamados "aliados" que foram ocupados militarmente pelos EUA por décadas, como Japão, Coréia do Sul ou Alemanha, isso pode ser possível (embora nem isso seja garantido).

Mas é muito, muito improvável que Trump seja capaz de pressionar grandes países de importância macroeconômica global, como China, Rússia, Índia ou Brasil (em outras palavras, nações do BRICS), a concordar com um Acordo de Mar-a-Lago.

O Acordo Plaza de Reagan de 1985 é frequentemente citado como o modelo de Trump. No entanto, esse acordo foi imposto aos vassalos dos EUA, Japão, Reino Unido, Alemanha Ocidental e França, que têm uma estreita parceria militar com os EUA. Além disso, seu papel na economia mundial hoje é muito mais fraco do que era então.

Economistas e formuladores de políticas chineses estudaram de perto os efeitos desastrosos que o Acordo de Plaza teve sobre o Japão, supervalorizando sua moeda, prejudicando a competitividade de suas exportações e alimentando uma bolha catastrófica de preços de ativos. É praticamente impossível imaginar que a China concordaria em assinar um acordo semelhante que poderia levar ao mesmo resultado.

Trump acha que o acesso ao grande mercado dos EUA é a bala de prata que pode ser usada para pressionar os países a assinar esse Acordo de Mar-a-Lago. Ele adoraria que a China aumentasse o valor de sua moeda, o renminbi, para que Washington pudesse desvalorizar o dólar, mas isso prejudicaria o próprio setor manufatureiro da China em nome dos EUA.

Para a China, o acesso ao mercado dos EUA não é tão importante quanto antes. A China ainda exporta muito para os Estados Unidos, mas a situação está mudando rapidamente. A ASEAN, a Associação das Nações do Sudeste Asiático, já ultrapassou os EUA como o maior parceiro comercial da China.

Embora 14,8% das exportações da China ainda tenham ido para os EUA em 2023, esse número caiu substancialmente de 19,2% em 2018.

A China já passou uma década diversificando suas relações comerciais, por isso não depende mais tanto dos EUA.

Acabar com a dependência do comércio com os EUA foi um dos principais objetivos da Iniciativa do Cinturão e Rota da China, lançada em 2013 para criar a infraestrutura física necessária para integrar economicamente o Sul Global em um mundo pós-EUA.

Sinais deste mundo cada vez mais multipolar podem ser vistos em todos os lugares.

Um exemplo claro foi o fato de que, em resposta às ameaças de tarifas de Trump, o Vietnã convidou o presidente da China, Xi Jinping, e líderes europeus para se reunirem no Sudeste Asiático para discutir planos comerciais.

O governo Trump pode acreditar que pode forçar o mundo a assinar um Acordo de Mar-a-Lago metafórico ou literal, mas é improvável que tenha o impacto que deseja em um mundo onde os EUA perderam tanto de seu domínio.

Em 1944, quando a Conferência de Bretton Woods foi realizada, os Estados Unidos representavam cerca de 35% do PIB global e eram a superpotência manufatureira do mundo.

Hoje, a China representa mais de 19% do PIB mundial (PPC), em comparação com menos de 15% dos EUA, e a participação da China está crescendo ao longo do tempo, enquanto a dos EUA está diminuindo.

A China é agora a superpotência manufatureira do mundo, e os EUA estão lutando freneticamente para se reindustrializar.

A situação é completamente diferente, e Washington não tem mais a influência de que desfrutava no final da Segunda Guerra Mundial, quando a maioria das economias avançadas do mundo foi fisicamente destruída e os EUA eram o único jogo real na cidade.

#Trump #tarifas #guerra comercial #déficit

0 notes

sab-cat · 7 days ago

Text

Apr 3, 2025

Those tariffs are due to take effect on April 9 for 60 countries, with peak rates around 50 percent. That's in addition to a baseline 10 percent tariff that all countries will be subject to starting on April 5. But while Trump expressed intent to push back on anyone supposedly taking advantage of the US, some of the countries on the reciprocal tariffs list puzzled experts and officials, who pointed out to The Guardian that Trump was, for some reason, targeting uninhabited islands, some of them exporting nothing and populated with penguins.

Some overseas officials challenged Trump's math, such as George Plant, the administrator of Norfolk Island, who told the Guardian that "there are no known exports from Norfolk Island to the United States and no tariffs or known non-tariff trade barriers on goods coming to Norfolk Island."

Economists fear these tariffs could suddenly hit American businesses with enormous costs that could rapidly cause price hikes for consumers. Among those sounding alarms was economist James Surowiecki, who took to X (formerly Twitter) to allege where the supposedly "fake tariff rates come from."

The US Trade Representative published a breakdown of how the Trump administration arrived at its calculations, which Politico said "describes the same calculation detailed by Surowiecki." But according to Surowiecki, the president's team allegedly used "made-up numbers" that "only used the trade deficit in goods," not services, "so even though we run a trade surplus in services with the world, those exports don't count as far as Trump is concerned."

"They didn't actually calculate tariff rates + non-tariff barriers, as they say they did," Surowiecki wrote. "Instead, for every country, they just took our trade deficit with that country and divided it by the country's exports to us." Further down in the thread, he alleged that Trump's math was "dumb and deceptive."

On social media, rumors swirled that the Trump administration got these supposedly fake numbers from chatbots. On Bluesky, tech entrepreneur Amy Hoy joined others posting screenshots from ChatGPT, Gemini, Claude, and Grok, each showing that the chatbots arrived at similar calculations as the Trump administration....

Whether the Trump administration actually consulted chatbots while devising its global trade policy will likely remain a rumor. It's possible that the chatbots' training data simply aligned with the administration's approach.

#trump adminstration #tariffs #genai

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reddanceragain · 8 days ago

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Heather Cox Richardson

April 2, 2025 (Wednesday)

Heather Cox Richardson

Apr 3

Dow Jones Industrial Average futures lost more than 1,000 points upon the news, falling by 2.5%; the S&P 500 dropped 3.6%.

Josh Marshall of Talking Points Memo makes the important point that “Presidents have no inherent power over tariffs whatsoever.” The Constitution gives to Congress, not the president, the power to impose tariffs. But the International Emergency Economic Powers Act allows the president to impose tariffs if he declares a national emergency under the National Emergencies Act, which Trump did today, declaring a “national emergency to increase our competitive edge, protect our sovereignty, and strengthen our national and economic security.”

0 notes

4bttnra · 8 days ago

Text

Heather Cox Richardson

April 2, 2025 (Wednesday)

Dow Jones Industrial Average futures lost more than 1,000 points upon the news, falling by 2.5%; the S&P 500 dropped 3.6%.

Josh Marshall of Talking Points Memo makes the important point that “Presidents have no inherent power over tariffs whatsoever.” The Constitution gives to Congress, not the president, the power to impose tariffs. But the International Emergency Economic Powers Act allows the president to impose tariffs if he declares a national emergency under the National Emergencies Act, which Trump did today, declaring a “national emergency to increase our competitive edge, protect our sovereignty, and strengthen our national and economic security.”

0 notes

justinspoliticalcorner · 7 days ago

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Jay Kuo at The Status Kuo:

Donald Trump appeared in the Rose Garden yesterday to announce his long dreaded “Liberation Day” tariffs. No one quite knew what to expect, given his contradictory messaging and on-again/ off-again approach to tariffs so far. Still, few expected what he actually declared: an across-the-board, minimum 10 percent tariff on nearly all imported goods worldwide, plus additional tariffs he misleadingly labeled “reciprocal” as if to imply they are in response to unfair tariffs by other countries. These hit some nations’ exported goods with import taxes of around 50 percent. For example, China is now at 54 percent and Vietnam at 46 percent. These are staggering new levies. The markets shuddered and dropped sharply in response, which is probably why Trump waited until after they closed to make the announcement. At the time of this writing, three hours before the opening bell on Wall Street, the S&P 500 is down 3.3 percent and the tech-heavy NASDAQ is down 3.7 percent in after-hours trading as investors worry about the global economic impact of the tariffs. Economist Justin Wolfers pulled no punches in his assessment: “Monstrously destructive, incoherent, ill-informed tariffs based on fabrications, imagined wrongs, discredited theories and ignorance of decades of evidence. And the real tragedy is that they will hurt working Americans more than anyone else.” As you’ll see in the discussion today, Wolfers is dead on with this. To get a full sense of it all, let’s ascend to 10,000 feet and survey the danger and the damage from a higher vantage point before dropping down for a closer look.

Tariffs are a tax, but how big are these?

Trump claims that the tariffs will raise roughly $6 trillion. Applying a typical 10 year window, that’s around $600 billion a year. That would make it the biggest single tax hike in generations. And remember, tariffs operate as a flat, national sales tax, which means that the rates don’t “progress” with income. Middle class and working families will be hit hardest. Broadly understood, the tariffs are a way for Trump to pay for his planned massive tax cuts for the wealthy. As Prof. Robert Reich notes in a chat with my friend Heather Lofthouse, Trump’s tariffs are a $6 trillion wealth transfer from the poor to the rich. Reich notes that tariffs are a regressive tax upon consumers, while the proposed tax cuts are designed for the wealthy. “Put those together, and you have a gigantic redistribution upward, from working people and the poor to the very wealthy. That is a scandal.” [...]

These aren’t “reciprocal” anything

The first thing experts noted was that the second column in Trump’s chart was all wrong. Most of those so-called tariffs do not exist at the levels displayed. For example, as financial reporter James Surowiecki noted, South Korea does not charge us a 50 percent tariff, and the EU does not charge us a 39 percent tariff as the chart below claims. [...]

Whom did they include and leave out?

Let’s zoom back up again. If you ever want an example of incompetence paired with corruption, look no further than these new tariffs which impose levies upon places with zero human population. For example, they include a 10 percent tariff upon the “Heard and McDonald Islands” which have no people living on them. It’s just penguins. And the only people living within the “British Indian Ocean Territory,” which also gets slapped with a 10 percent minimum tariff, are the U.S. military personnel at the base at Diego Garcia. He’s literally taxing a U.S. military base. It’s as if an intern went through a Wikipedia list of countries to make this chart. But perhaps this was just some kind of administrative oversight, right? Maybe no one high up had a hand in reviewing the nations to be hit with tariffs? That’s unlikely, given that the two countries somehow not listed are Russia and North Korea. Now, in fairness, North Korea has no substantial trade with the U.S. (and neither do the penguins at the Heard and McDonald Islands). But Russia still does billions in trade, so why is it conspicuously off the list? Prof. Michael McFaul pointed out that, as reported by Reuters, on “Liberation Day” while Trump was busy announcing new tariffs on our allies and biggest trading partners, the White House had made arrangements for a visit by the head of Russia’s sovereign fund. He demanded an explanation for this, but one is unlikely forthcoming.

Congress could end this madness now

There’s something often overlooked in all the fear and handwringing over Trump’s tariffs: It doesn’t have to be this way. Congress, which holds the power of the purse, delegated tariff authority to the White House and has the power to take it back. If the economy goes into recession as prices rise from the “Liberation Day” tariffs, the blame should rest not just with Crazy Donald but his enablers in the House and Senate. They understand that this path is both foolish and dangerous but are too cowardly or too greedy to care. And we can’t say we weren’t warned. Kamala Harris spoke frequently during the campaign about how Trump would impose what amounts to a 20 percent national sales tax upon the country. Harris was right about Trump’s plans, but off by about $1,000 per family. As discussed at the top, the projected tax revenues from these tariffs are around $6 trillion, according to the White House. With 134 million U.S. households, and assuming a ten year period, this comes to around $5,000 per household per year.

Donald Trump’s tariff tax hike is nothing more than a sham that will decimate the economy.