It's Trump's Tariff Day! Are You Feeling Liberated Yet?
War is peace, freedom is slavery, tariffs are tax cuts, right?
Welcome to Wednesday, April 2, in the era of uncertainty.
Our dear leader has promised to right a bunch of wrongs by the world by announcing his grand plan for taxing imported goods. His truth is that a bunch of other countries, nearly 200 of them, have been sucking the life blood out of the US economy for many years through a variety of unknowable methods.
On March 21st he took to Truth Social to announce:
“For DECADES we have been ripped off and abused by every nation in the World, both friend and foe. Now it is finally time for the Good Ol’ USA to get some of that MONEY and RESPECT, BACK. GOD BLESS AMERICA!!!”
I’m writing this on Liberation Day eve, and the President either has or has not finished his plan; it is either going to be 20% tariffs on nearly everything from everywhere, specific reciprocal tariffs, or a combination of both. Tariffs will begin immediately, or after some period of time where they’re reconsidered in light of tributes paid to the non-existent Trump library. It’s all clear as mud.
Trump will unveil his tariff plan in the first Rose Garden press conference of this term, with the entire cabinet present for the event, according to White House press secretary Karoline Leavitt.
MAGA acolyte Steve Bannon is so excited about whatever it is will be done with tariffs that he’d like to see the date memorialized as a holiday.
There are three schools of thought about what will happen if Trump actually takes a decisive step toward widespread tariffs. If you feel inclined to believe (please don’t) White House aide Peter Navarro, tariffs will raise $6 trillion in revenue over the next decade. Even though American consumers will be charged extra to make up the fees, Navarro told Fox News:
“The message is that tariffs are tax cuts, tariffs are jobs, tariffs are national security. Tariffs are great for America. They will make America great again.”
Somehow the geniuses at 1600 Pennsylvania Avenue think that exporting businesses or countries selling to the US will eat the cost of tariffs to compete with newly established American manufacturers.
In any case, Navarro says the tariffs will set the stage for tax cuts to be passed by Congress later this year… except that only people in higher income households will actually pay less in taxes in Trump’s plan. People in middle tax brackets would see negligible changes in tax rates, and those down the economic ladder will end up paying more.
Most economists outside the Republican bubble say that tariffs are in fact taxes, and that higher taxes can have the effect of slowing economic growth. While nobody’s predicting a full-blown recession, a common reaction is that “it depends.”
The Trump administration’s back and forth on tariffs, and the unknown impact on DOGE’s chainsaw approach to downsizing government have created uncertainty in both investors and consumers. Both groups would be less inclined to invest or spend as long as doubts about the future are so prevalent.
Finally, there are those people who study history who keep reminding us about the devastating impact of tariffs during the 1930s. It was thought by Herbert Hoover’s administration that tariffs would pump up a slumping economy. Instead, a trade war reduced global commerce and led to the loss of manufacturing and agricultural jobs.
“It depends” is the attitude of US trading partners. Let’s go around the world in a dozen paragraphs to see what’s cooking.
The European Union is weighing whether to hit the billions of dollars’ worth of digital services that American Big Tech companies sell to European consumers.
Via the Washington Post:
The debate over digital services risks expanding the trade war from manufactured goods such as cars, steel and whiskey to services from cloud storage and satellite internet provided by U.S. tech giants such as Apple, Google, Meta and Elon Musk’s Starlink network.
European officials, largely behind closed doors, have been debating for weeks the wisdom of targeting digital services with tariffs and other measures: part of a carrot-and-stick response that would also include new trade concessions to Washington. As attempts to negotiate with the Trump administration have hit a wall, several nations within the 27-member E.U. bloc are more seriously pressing to include digital services in countermeasures, according to three European officials who spoke on the condition of anonymity to discuss internal deliberations.
The prospect of US tariffs has led to Japan, South Korea, and China making noises about collectively responding, and re-opened interest in talks between the three nations about establishing a free trade zone.
According to the South China Morning Post:
Building on the Regional Comprehensive Economic Partnership (RCEP), which has boosted intraregional exports, such an agreement could leverage Japan’s precision manufacturing, South Korea’s semiconductor prowess and China’s logistical might.
Countries in Latin and South America are split over possible reactions to tariffs coming their way. It should be noted that tariffs imposed by the US in 2018 led to more agricultural trade with China and the European Union.
Should countries to the south respond as they did during previous trade wars by imposing counter-retaliatory tariffs, US producers could be the big losers as happened in 2018 and 2019. In the short run, they would likely face lower farm prices as exports plummet.
Perhaps the most serious consequence for the US in the long run could be producers losing their reputation as reliable suppliers, with long term trade diverted to other suppliers ready to step in.
Economists in Africa see the imposition of tariffs causing the end of the African Growth and Opportunity Act (AGOA), the core of U.S. economic policy and commercial engagement with Africa.
Since 2000, eligible sub-Saharan African countries have received duty-free access to the US for a predetermined list of products provided they establish or make continual progress toward establishing a market-based economy, the rule of law, political pluralism, and the right to due process. In return, African countries must eliminate barriers to US trade and investment, enact policies to reduce poverty, combat corruption, and protect human rights.
The program was supposed to be up for renewal in 2025, but given the Trump administration’s America First (and screw you) attitudes, there is a consensus that the US presence in Africa will decline, benefiting China, the European Union and Britain along with offering opportunities for ties with countries such as India, Turkey, Russia and the United Arab Emirates.
India has chosen to comply with demands to lower its tariffs in advance of April 2, according to a statement from President Trump on Tuesday. Israel also announced that it wants to preemptively remove its tariffs (which are fairly minimal) on US goods. See, just like with America’s Finest Law Firms and major media companies, some countries are ready to comply in advance.
One important aspect of dealing with Donald Trump, the man, is to recognize that everything is negotiable, and one possible outcome from the imposition of US tariffs could be bilateral agreements with enough countries to be of actual benefit to our economy. The possibilities of this occurring are reduced substantially by his refusal to grant common courtesies and inclination to make threats in adversarial situations.
If the Wise Guys at Goldman Sachs are right, Liberation Day will free the US economy from Biden’s expansion and liberate consumers from paying lower prices on imports.
Expect uncertainty in any case. It’s the only thing the Trump administration has proven adept at.
Record number of California residents are trading in Teslas, new data show by Chelsea Hylton at KCAL News
That new data shows that the number of Tesla owners trading in their EVs jumped nearly 250% this month, year over year.
A father of two, who asked CBS News Los Angeles not to use his name due to the current heated political climate, wants to get rid of his 2021 Tesla. Even though he will lose money by doing so, the reason behind his decision is Elon Musk.
"I just became disgusted by what he stands for," the father said.
He said he used to admire the Tesla founder, but that all changed when the billionaire took a lead role in President Trump's administration.
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Trump administration says it mistakenly deported Salvadoran migrant by Maria Sacchetti and María Luisa Paúl at The Washington Post
The Trump administration’s admission of a potentially life-threatening mistake — and its refusal to attempt to correct it — comes amid accusations that federal officers are increasingly turning to inhumane and illegal tactics to fulfill the president’s campaign promises of carrying out the largest numbers of deportations in U.S. history. Trump has reopened family detention centers, held migrants in a former prison for terror suspects at Guantánamo Bay and has invoked the Alien Enemies Act of 1798 to expel alleged gang members without a hearing, although his use of that wartime power is on hold as it is argued in court.
And on Monday, a federal judge ruled that Homeland Security Secretary Kristi L. Noem, after spreading discriminatory stereotypes about Venezuelans, had unlawfully threatened hundreds of thousands of immigrants with deportation to that country, despite U.S. recognition that it is a high-risk destination because of political repression and crime.
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Comedian dropped by White House correspondents hits back: ‘I would have been so terrifically mean’ by Richard Luscombe at The Guardian
“If there’s one thing I learned from this weekend, it’s you have to be fair to both sides,” Ruffin told Meyers, who replied that: “When people are objectively terrible, we should be able to point it out on television.”
“I thought that too… on Friday,” Ruffin said.
“But today is Monday. And Monday’s Amber Ruffin knows that when bad people do bad things, you have to treat them fairly and respectfully. When you watch The Sound of Music, you have to root for the singing children and the other people.”
“You mean the Nazis?” Meyers said, referring to Trump’s comment that there were “good people on both sides” at a 2017 white supremacist rally in Virginia in which a civil rights activist was killed.
