Trump's Tariffs: Turmoil & Tribulations
Is he crazy? Or is there a method to his madness?
It’s been a week now since President Trump announced he was liberating the country with a tariff regimen apparently crafted with assistance from a dim version of ChatGPT and an even dimmer Peter Navarro. Here’s where things stand this morning…
There are increasing cracks within the coalition that ushered Trump into power. Wealthy stock market investors are trying to leverage a more ‘balanced’ approach, perhaps an export rebate offered to certain manufacturers. I doubt they’ll get it.
The White House spin on tariffs is now focusing on negotiations, with President Trump telling a Republican gathering that countries are kissing his ass hoping for a better deal. There may well be nations who feel obliged to bend the knee, but the negotiations I’m hearing about are of countries and regions negotiating with each other to isolate the US,
There was a quote going around on social media yesterday to the effect of some business leaders questioning the US president’s sanity. Upheaval on the Treasury bond market yields has triggered yet another round of speculation about an economic disaster, one prediction says to expect escalating interest rates. IF true, aside from impacting the dwindling number of people who can afford 7+ per cent mortgages, the biggest victim will be the US government trying to finance its deficit. (You should know by now that Republicans don’t really care about the deficit.)
On Capitol Hill, phones are ringing off the hook with desperate messages from people whose 401Ks have transformed into 201Ks in the blink of an eye. Retailers are afraid this economic downturn will be the death knell for businesses already battered by COVID and the rise of Amazon.
So far this morning China has responded to Trump’s 104% tariff with 84% tariffs on American imports.
Also, via the New Republic:
The European Union has responded to Trump’s trade war with tariffs of their own that deliberately target red states.
The European Commission on Wednesday greenlit tariffs of up to 25 percent on cigarettes from Florida, beef from Kansas and Nebraska, chicken from Louisiana, car parts from Michigan, and most importantly, soybeans.
Prior to the opening bell at the New York Exchange the President told his followers via social media to buy stocks now, and some are implying this means he’ll lift tariffs soon. It’s more likely he’s using his followers to prop up the market.
Nah, the tariffs are here for a while. The international trading and governance schemes mostly crafted by the US in the post-WWII period have not yet been completely destroyed. And therefore Trump’s acts of dominance aren't fully asserted.
The more or less universal fear implied by tariffs is personal/occupational loss caused by a deep recession. The zeitgeist is further soured by legions of newly (or soon to be) unemployed federal workers, along with the daily drumbeats of health, science, and cultural programs being dumped by the wayside.
Then you have the criminally crazy shit going on with the War on Immigration. The Overton window about who can be deported is shifting rapidly, from foreign gang/terrorists, to “illegal” aliens, to foreign college students, to…. Eventually this target area will be extended to include political opponents, with the President now accusing the Biden administration of treason.
Here’s a thought for you. Maybe there is a method to the White House madness.
If you’ve paying attention to the rationale given for slapping tariffs on countries where the US runs a surplus, there is an effort underway to bully those countries into adopting American standards. Technology and food are the clearest examples.
All those investigations, fines, and court orders for Apple, Google, X, Facebook, etc. would go away if ‘woke’ countries would let American companies set privacy, safety, and consumer standards. Our own citizens are blissfully unaware of the service and technology sectors’ business ‘standards which are, well, evil.
We have no privacy. Congress hasn’t acted on the topic since the turn of the century, despite vast changes in hardware and operating systems. Business models are now widely built around recurring charges to keep consumer goods functioning. That’s why your HP printer won’t work anymore if you insert an unauthorized ink cartridge.
Australia doesn’t want American beef. Europe doesn’t want American chickens. This has everything to do with factory farming, including the cruelty, chemicals, chromosome editing considered the way we do things in the good ol’ USA.
Do you know why the Canadians didn’t have an egg pricing crisis? Because the chickens are raised by family farmers who don’t see the sense in putting together millions of chickens in a small space. (That’s the short version…)
David Atkins at The Washington Monthly says we’re wrong to be looking at tariffs as solely an economic matter; it’s a cultural purge on the order of Mao’s cleansing of ideological impurities. Our country’s non-maga voters will be targets of this massive retribution.
That’s what’s behind the economic shock therapy now underway. It’s similar to the disaster economics that the U.S. used in Chile and post-Soviet Russia, and Javier Milei is inflicting on Argentina today. But it’s inflected with the fervor of a Cultural Revolution—ironically more reminiscent of Mao than Pinochet with its war on intellectuals and its bestowing glory on farms and factories. The goal is to destroy the professions that make resistance possible—this is why you start with law firms instead of HMOs—then tighten the screws once people are desperate enough to submit. When the unrest comes—and it always does—so do crackdowns.
The economic toll is already mounting. The S&P 500 is in a tailspin. Global markets are panicking. JPMorgan puts the odds of a U.S. recession at 60 percent. Inflation is expected to skyrocket. Growth is expected to plummet. The tariffs are making everyone poorer—especially Trump’s own base in farming, logistics, and export-heavy manufacturing. But they don’t care about that so much. The point is to make dissenters poorer first. The goal isn’t prosperity—it’s obedience.
This is the vision: take NIH scientists, coders, artists, researchers, and teachers and force them into low-wage jobs doing whatever robots can’t yet do. Not because it’s efficient. Not because the work isn’t valuable. But because they are who the far right considers dangerous—people who know how the system works—and might challenge it.
Gil Duran at Framelab has a slightly different, but ultimately agreeing take:
Most Americans rarely think about the trade deficit. That makes it a perfect target for distortion. But this isn't just about economics — it's about power.
Trump is inventing crises and then using them to justify sweeping actions. He's taken a manageable, misunderstood concept and turned it into a "national emergency" — not because it is one, but because the emergency frame gives him cover to act recklessly and consolidate power.
This tactic isn't new. Legal theorist Carl Schmitt called it the state of exception — when an emergency, real or invented, is used to suspend norms and rewrite the rules. Authoritarians throughout history have used this exact concept to consolidate power.
One thing that jumped out at me is that there’s no obvious built-in exception for the billionaire class that thought Trump was such a good idea in the first place. Except that there is; those with cash or cash equivalent reserves will be positioned to wait out the disruptions.
Yesterday, Walmart reissued it’s financial projections, indicating that they intended to tap into the company’s substantial cash reserves to preserve market dominance. They’ll be selling stuff at pre-tariff prices for as long as it takes to crush the competition.
Are we going to go for the ‘you’re wealthy until we say you aren’t’ system, like in Russia? Not yet. Consider the coming months to be more like a Hunger Games, where the winners will be permitted to pay tribute and (perhaps) sit at the side of the emperor.
In addition to shutting down the crypto-enforcement office, DOGE is also in the process of essentially closing down the Tax Division at the Department of Justice. And the acting head of the Internal Revenue Service just resigned after the Immigration Enforcement types were given access to confidential tax records.
I don’t think that looking for immigrants who are working and paying taxes is going to be a high yield area for deporting criminals, but I do know that once that door’s open, it ain’t being closed anytime soon. Nixon’s longing for access to IRS files was one of the impeachment charges filed against him.
So there you have it. More chaos. More uncertainty. More angst. There’s only one cure, namely, get up and do something. There are protests large and small, phone calls to legislators, and –most critically if things get really dark– building community.
PS— Thank you and Howdy to all my new subscribers in recent days.
ALSO: Yesterday’s graphic was based on a drawing by Peter Kuper. I looked for a name, I really did. h/t ratboy_labongo
An International Minimum Wage by Hamilton Nolan at How Things Work
Many people on the progressive-to-left part of the political spectrum are, in the abstract, sympathetic to the purported goals of tariffs, because of all the inequality and other bad shit that Clintonesque “free trade” has wrought. Doing something to roll back or reverse the damage of these policies is a goal that unites everyone from progressive economists to organized labor to regular people who think that it sucks that their hometown sucks now because all the employers moved to Mexico. It is therefore natural that when people see Trump talking about this and doing something about it, it will attract a certain level of sympathy along the lines of “Well, appearing to select the tariff rates by throwing handfuls of gravel at a distant calculator would not be my first choice, but at least he is trying to address the problem.”
Consider this: International minimum wage. Is there one? No. Should there be one? Yes. America could say, “If you want to sell goods here, if you want access to our attractive markets, the workers involved in producing the goods must have been paid X minimum wage.” The wage itself can be chosen from an ascending menu, depending on how strong you want the effects of the policy to be: it could be “the equivalent of US minimum wage or the average wage of US workers in this industry, adjusted for purchasing power in the poor country in question”; it could be “the actual US minimum wage”; it could be “the actual average wage of US workers in this industry.” Like all minimum wages, it is a policy well suited for fine tuning based on specific economic, moral, and political goals.
What would the effect of an international minimum wage be? Well, for businesses, it would increase the cost of manufacturing goods overseas, thereby reducing the economic incentive for companies to offshore jobs. For workers, it would raise wages and improve their economic position. In other words, one way to think of an international minimum wage is as a tariff where the tax in question goes directly to workers, rather than to the US government.
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Flyover Country - What a future where iPhones are made in America would really look like. At Blood in the Machine, Brian Merchant republishes a prescient piece of fiction by Tim Maughan. An excerpt (go read the whole story!):
At the station next to me, a slender matte-black robot arm twitches, snapping video chips into the motherboards. It is relentless, undistracted, untiring. Given half a chance Foxconn would replace us all, but then they’d lose all those special benefits the President promised them for coming here in the first place. The ten year exemption on income and sales tax. The exemption on import tariffs for components. The exemptions from minimum wages. The exemption on labor rights. The protection against any form of legal action from employees or inmates. The exemption from environmental protection legislation. And Apple? Well, without me standing here, clipping one Chinese-made component into another Chinese-made component, Apple loses the right for a robot in Shenzhen to laser engrave ‘Made in the USA by the Great American Worker’ into every iPhone casing before they’re shipped over here…
…Eight hours later. 2880 iPhones.
Shift over. My calves and the backs of my thighs sting from standing for 12 hours, my eyes strained from the fluorescent glare. The panel on the wall bleeps, turns green, as I punch out. I gaze at its screen. My blocky, low-res reflection gazes back, a machine vision approximation of my tired eyes and pale skin. I stand there, silently, not moving, waiting for the panel to recognize me. A tick appears, obscuring my face. Video game statistics scroll along the screen’s bottom: efficiency, accuracy, time keeping, responsiveness, productivity. 4314 iPhones. Chimes and a bleep. A synthesized, too-cheerful, feminine voice tells me I should smile more. A second bleep, the click of a door unlocking, and I’m out.
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Across San Diego, students, parents and educators raise alarm over funding cuts to schools, research by Gary Robbins and Jemma Stephenson at the San Diego Union-Tribune
Dozens of arms shot toward the midday sun Tuesday at UC San Diego when a protest organizer asked roughly 200 students if they work in laboratories whose research funding has been cut by the Trump administration.
Seconds later, the crowd was chanting “Stand up, fight back!” — the kind of phrase that demonstrators across the country were using during a coordinated day of action dubbed “Kill the Cuts.”
Hours earlier, a few dozen educators, parents and others had rallied against school funding cuts in downtown San Diego, just outside a hotel where the nation’s top education official was speaking at a conference.
