I own a manufacturing company for test equipment for automotive. These are big systems that ship in several containers and cost several million dollars. They last 20+ years, long-term support is important. Our competitors are German. In our small niche we are dominant worldwide. We are a small company, 50 people. About half are on the manufacturing side; mechanics, welders, installers, service, electricians. Many voted for Trump.
90% of our sales are exports, about 50% to China. How can we compete with German suppliers now? Germany is not holding a gun to the head of its allies, imported inputs will remain available in Germany. Our sales people say the US looks unstable to our customers. It is clear to me that continuing out the the US will fail. We will go out of business. Our disadvantage relative to our German competitors is too great, despite our technical superiority.
Sales to China, including existing purchase orders, are in deep trouble, we are in a crash program to source as much as possible outside the US. I really have three options: Move the company outside the US, sell to a competitor, or fail. So far the Canadian development people have been easy to work with, moving is probably possible if we move quickly before the book of sales evaporates. In less guarded moments the Canadians I speak with feel profoundly betrayed, there is no going back to earlier trust.
The foolishness is profound: the US has 18% of the vehicle market. That means 82% lies elsewhere. To use the mad king's own vile words, he doesn't have the cards to bully China into submission.
Trump's on-again off-again tariff implementation could prove just as deadly to your viability. If you raise money for a quick move outside of the US; and then a few months later Trump negotiates a big, beautiful new bill with China that returns tariff levels to pre-Trump2, then your new debt could prove dangerous. But considering that 90% of your sales are exports, it also begs the question of why you haven't already relocated to a lower cost haven. Trump/GOP may have actually done you a favor: by forcing you to move your business--and its fifty jobs--abroad.
Thanks for the thoughts. Our systems are custom-engineered, about a third of the employees are engineers, no two systems are the same. So off-site production isn't feasible, production and engineering same site. I could have moved overseas (I'm the lead engineer), that never occurred to me, if it had Germany would have been the first choice (infrastructure and good engineers/technicians), no big production savings. According to economists high value-add manufacturing like ours is appropriate in high-cost economies, but that presumes political stability.
Our cash position is good enough so I don't think a move would be financed. The reason we need to move is the tariffs, yes, but also instability and lack of trust. It makes less sense to buy an expensive capital system from a little US-based company. Trump dropping tariffs doesn't really help, the product has a one year lead time, the customer has no clue what the tariff will be when they sign the contract. Chinese customers are already asking us to cover tariff rises, we can't do that.
Can you explain a bit more why tariffs are a concern for your foreign customers? Is that due to your imported input costs increasing? Or because of the expectation their own governments will set retaliatory import tariffs of their own? Or just general uncertainty?
China's retaliatory tariffs on US imports increased to 84% yesterday, and that's before Trump's 3rd round of 'retaliatory' tariffs today increased US tariffs on Chinese goods from 104% to 125%.
So TomTom50's firm would need to cut its prices to Chinese customers by 46% to remain competitive with their German competitors. Their margin is unlikely to be anywhere close to that. So absent moving production out of the US, they are facing a loss of 50% of sales.
Except for a few services, no one's margins in the US are that high, and only a few in China. US sales to China are going to collapse over the next 30 days.
Adjusted annually, nearly a trillion dollars of world trade is going to vaporize.
You are right, our margin is nowhere near 46%. Maybe 10%.
Even if we could wave a magic wand and drop prices that low the tariff is charged at the Chinese port one year from now. The Chinese customer has no clue what the mad king will do in the meantime.
Germany, however, they didn't elect a crazy moron. Why would a customer take the risk?
The damage is done. We cannot stay in business manufacturing in the US. My options are move, sell, or die.
Thanks for your curiousity. I agree the ground'level impact isn't well covered, I sympathasize with the reporters plight. My company might be a good case example (interesting product, photographable plant, simple story), but how would a reporter know that? With local journalism gutted would the stripped-down local paper see promise in the story?
We are far enough down the road to authoritarianism that I would worry about retaliation if we went public, but once we relocate, that's another matter.
The real problem, as with so much else in this Trump/Musk blizzard is simple. Half the nation re-elected to the presidency a man who has over an entire lifetime proven himself little more than a periodically successful huckster and con man, a man who has proven over and over again to utterly disdain and disavow our electoral process, our Constitution, the the rule of law, a man who has absolutely no sense of the nation we were designed to be, a man whose whole being is dedicated to only one combined end - the accumulation of as much wealth, status, political and financial power as he can manage, and to wholly evade responsibility or legal sanction for anything he does along the way. We are fully into Amendment 25 territory here.
Sadly, his Base almost unanimously disagree, believing in his quasi-Messianic levels of business acumen to magically return America to greatness.
Fox News and its smaller imitators have been pulling out all the stops for the past fortnight to dismiss/deflect/minimize/rationalize the economics of this Trump/GOP trade fiasco. Polling shows that while libtards like myself are utterly horrified at what GOP rule is doing to the economy, 85% or so of the GOP faithful are still very confident of an extremely positive outcome.
Give them a month or two for the tariffs to juice inflation to mid-Biden levels, and we'll see how deep that faith really is.
Honestly Trump already has given enough grounds for a Democratic House to file impeachment charges again. The Jan 6 pardons, the refusal to spend allocated government funds, the illegal firings, ignoring court orders...
Yes, he has. And I believe at least one member of the House has already done so. Until Democrats have a majority, however, it is a futile if justified gesture.
To quote Oscar Wilde, "Everything in the world is about sex — except sex. Sex is about power". Or, if you're more modern, "the personal is political".
Politicians are too shy and culture is too sex negative to allow for an honest discussion about it, but to enable fucking (including within marriages) is what the entire socio economico political system is for. So, yes, the claim requires a response.
I'm sorry you're so scared of talking about sex you don't even want to try.
I'm sure you had fun writing that, but that's not really even OP's point. OP's isn't prudish, he is implying that it is such a stupid argument that it doesn't even merit a response.
Sure, it was fun. Shocking the bourgeois, as they used to say.
But it's also a serious point. I suspect prudishness b/c otherwise this argument is no more stupid than any of the others on that list ('tariffs are tax cuts"...) except the 'tariffs will provoke a recession, which is great to lower interest rates' (that argument isn't stupid, it's indeterminate. If tariffs provoke a recession, then yes. But maybe they don't and they're inflationary and they force the Fed to raise. And stagflation is obviously a distinct possibility).
Very well put, and well-explained, thank you. I expect I'll be deploying a lot of these when arguing with family members.
One thing I haven't seen talked about much is: the complete BS "showmanship" aspect. OK, yeah, it's Trump, and he loves drama. But... Responsible governing doesn't look like this! There is nothing to be gained by rolling these out as a surprise! He's treating international trade like a game show, and the chaos from that alone is bad. With everything else going on, the price tag for his need to be the center of attention isn't the biggest thing to worry about, but it's not zero. Those are margins in which people will suffer, lose their livelihoods, who otherwise would have barely squeaked by.
You're a braver man than me Noah: I lack the strength to explain to Trump supporters why their Dear Leader is actually a moron. If they have not figured it out in 9 years: they won't now. Trump's most powerful strength is turning every liability, somehow, into a win. The man literally just tried to throw the global economy into a tailspin for fun, and is now kinda declaring victory. It's literally that stupid meme of Trump signing tariffs and Trump supporters going "this will create jobs!" Then Trump removing tariffs and the MAGA faithful going "Art of the Deal!"
It's a matter of faith, Benjamin. Something MAGA loyalists have in abundance. You can have it too: Just watch FOX News for several hundred hours straight. You'll see, you'll see!
Fun article thank you. I have a quibble however. You said, " China is much more capable of running a self-contained economy and a self-contained defense-industrial base than America is. " Am I wrong in saying the US is mostly a domestic driven economy (70% of GDP domestic consumption) and China is export driven and given their demographics getting to a self sustaining domestic economy looks very unlikely? Or there are big nuances that make that all false?
They're both actually quite inward-focused economies! China was more export-oriented in the 2000s, but right now their flood of exports is really just overflow from domestic overcapacity.
“Tariffs will reduce interest rates, making it easier to finance the national debt”
It bears repeating: What in the hell makes anyone think the coin-operated, do-nothing Congress would take the opportunity to refinance the debt at lower interest rates? It passed up an opportunity to do so during the pandemic, when we were at zero real interest rates — a truly historical opportunity. Americans and some of the most cash-rich corporations refinanced mortgages and sold corporate bonds that payed 1-1.5%, respectively. And what did the coin-operated Congress do: Nothing.
Congress doesn't control the Treasury which is responsible for the Treasury security auctions. The mix of securities with different periods in large part reflects market demand for liquidity so a lot of US Federal debt is in shorter instruments.
“If you were a Senator or a Congressman from 2015-20, and you didn’t spend most of that time pushing for a giant refinance of our debt, you should spend the rest of your life embarrassed for your failure.”
Again, very true. It's down to bare bones tribalism now. Once you've lost sight of means and ends like they have, 'cutting off your nose to spite your face' starts to seem like a reasonable thing to do. The US needs a third political party of some sort to stop the two main parties obsessing about each other to the exclusion of all else.
Officially, it's because we've already put sanctions on them, so surely we don't have any imports from them anyway.
But in practice, that excuse didn't apply to the penguins on Heard Island or Norfolk Island, who we definitely weren't importing anything from, and we are actually still importing billions of dollars of goods from Russia (a small fraction of the amount we import from France or Cambodia, true, but a lot more than the amount we import from some of these random islands that got their own tariffs).
But we know it can't be because of any sort of Trump-Russia collusion - Bill Barr proved that this would never happen, so it must just be some sort of incompetence in the Trump administration.
They didn’t sanction Iran either. Is Trump buddies with the Ayatollah now too? Come on.
Small islands are not the big gotcha people think. Pre-existing tariff schedules are super thorough territorially. Those tariffs are also of little consequence. New tariffs on sanctioned countries would be a big part of eventual negotiations with those countries, so there is more reason to actually put off the sanctioned countries for now, whom we trade quite little with.
Even if one sees a place for tarrifs (and many do, including on the left), what makes Trumps actions awful are that:
1) He is creating chaos and uncertainty toward an uncertain outcome by taking unilateral action before any negotiations.
2) He is targeting the deficit itself rather than unfair trade practices per se.
3) He is viewing each bilateral deficit as problematic in and of itself, which is crazy. Balanced trade and prosperity together require surpluses with some nations and deficits with others.
… and probably a few more elements too, but I find all the piling on RE: Russia, tiny islands, chatGPT etc. to be rather bad faith. With so much obviously rotten, why do we need to start speculating about more bad?
I think the serious version of the complaint is that the fact that Russia and Iran weren't even on the "default 10%" list is one more piece of evidence of how slapdash the process has been. The charitable version of that is that they got a list of countries and territories somewhere, put tariffs on everything (including a default 10% on some of them where they had no data) and then someone noticed that there are sanctions on Russia and Iran so they thought they weren't supposed to be on the list, and removed those, but didn't check the ones they had never heard of.
What I see at a basic level is a need to see bad intentions and not just bad reasoning.
I abhor Trump but I think he is doing this because he genuinely believes it’s good for the country. As self-centered as he is, he ultimately wants people to think he lead the country well.
Quite possibly! He seems to have a lot of affection for autocratic rulers - Putin, Xi (even if he's antagonistic against China on tariffs), Kim, Orban, MBS... I would certainly include the rulers of Iran on that list.
We can call out the economic stupidity of the tariffs while also pointing out that the imposition was slapdash (reflecting incompetence), and with questionable omissions (reflecting corruption and a re-ordering of U.S. diplomatic coziness). Let's walk and chew gum at the same time.
Trump boasted about wonderful fawning letters he got from Kim! He never says anything negative about Putin! Jared is quite close with MBS and CPAC has been held in Hungary as a sop to Orban. The idea that it is "wild speculation" to say that Trump has a lot of affection for autocratic leaders is laughable.
It’s wild based on what we know about the Trump-Iran relationship. You are taking one true critique “Trump has heaped too much praise on some Autocrats” and just branching out into a totally baseless theory of why sanctioned countries were considered to be outside of this round of “new normal” US trade.
Boy that was depressing. And you didn't even mention the non-China tariffs that he left in place. Suspect the equity relief rally may have forgotten that as well.
Meeting the goal of lowering interest rates and inflation seems as unlikely now as it did before the announcement. DODGE looks to be draining a lot less of the swamp than was targeted and MAGA is still focused on "tax relief". It seems the only hope to motivate MAGA in this regard is to bring back the bond vigilantes. The stock market swoon is said to have motivated the 90 day pause, we'll see what further adjustments sticky high long term rates may bring about.
Red-bashing aside, the MAGA movement has remarkable similarities with Maoist China before liberalization: it's not for nothing that Mao was (in)famously referred to as the "Great Helmsman," given how arbitrary his policies often became (just think of all those backyard furnaces). Maoism was in many ways a populist movement within the broader communist tradition, one that the power and autonomy of the masses (represented, of course, by a cult-like Great Leader) against a feckless and self-serving deep state bureaucracy (a quick dive into the history of the early PRC will show that the Cultural Revolution was primarily directed against the CCP party bureaucrats, including longstanding figures like Deng Xiaoping, Peng Dehuai, and our very own Xi Jinping).
Also btw wtf is with the normalization of far-right reactionaries? I know we're officially "post-woke" and that a broken clock is right at least twice a day, but having Noah namedrop Nathan Cofnas here really leaves a bad taste in my mouth.
“. . . blanket tariffs are a mistake. I understand the motivation: a big reason why Chinese imports to the U.S. have actually shrunk over the last few years is because a lot of final assembly moved to countries like Vietnam, Thailand, Mexico, etc. Blanket tariffs stop this from happening, at least in theory.”
I own a manufacturing company for test equipment for automotive. These are big systems that ship in several containers and cost several million dollars. They last 20+ years, long-term support is important. Our competitors are German. In our small niche we are dominant worldwide. We are a small company, 50 people. About half are on the manufacturing side; mechanics, welders, installers, service, electricians. Many voted for Trump.
90% of our sales are exports, about 50% to China. How can we compete with German suppliers now? Germany is not holding a gun to the head of its allies, imported inputs will remain available in Germany. Our sales people say the US looks unstable to our customers. It is clear to me that continuing out the the US will fail. We will go out of business. Our disadvantage relative to our German competitors is too great, despite our technical superiority.
Sales to China, including existing purchase orders, are in deep trouble, we are in a crash program to source as much as possible outside the US. I really have three options: Move the company outside the US, sell to a competitor, or fail. So far the Canadian development people have been easy to work with, moving is probably possible if we move quickly before the book of sales evaporates. In less guarded moments the Canadians I speak with feel profoundly betrayed, there is no going back to earlier trust.
The foolishness is profound: the US has 18% of the vehicle market. That means 82% lies elsewhere. To use the mad king's own vile words, he doesn't have the cards to bully China into submission.
Trump's on-again off-again tariff implementation could prove just as deadly to your viability. If you raise money for a quick move outside of the US; and then a few months later Trump negotiates a big, beautiful new bill with China that returns tariff levels to pre-Trump2, then your new debt could prove dangerous. But considering that 90% of your sales are exports, it also begs the question of why you haven't already relocated to a lower cost haven. Trump/GOP may have actually done you a favor: by forcing you to move your business--and its fifty jobs--abroad.
Thanks for the thoughts. Our systems are custom-engineered, about a third of the employees are engineers, no two systems are the same. So off-site production isn't feasible, production and engineering same site. I could have moved overseas (I'm the lead engineer), that never occurred to me, if it had Germany would have been the first choice (infrastructure and good engineers/technicians), no big production savings. According to economists high value-add manufacturing like ours is appropriate in high-cost economies, but that presumes political stability.
Our cash position is good enough so I don't think a move would be financed. The reason we need to move is the tariffs, yes, but also instability and lack of trust. It makes less sense to buy an expensive capital system from a little US-based company. Trump dropping tariffs doesn't really help, the product has a one year lead time, the customer has no clue what the tariff will be when they sign the contract. Chinese customers are already asking us to cover tariff rises, we can't do that.
Sorry for your dilemma. Out of curiosity, what is your contract language on tariffs (or other surprise cost increases)?
Very little. As far as tariffs the customer pays, contract language is what we are resisting.
These types of stories should get national headlines. Every democratic politician should be highlighting them non stop!
Very valuable perspective, thanks.
Can you explain a bit more why tariffs are a concern for your foreign customers? Is that due to your imported input costs increasing? Or because of the expectation their own governments will set retaliatory import tariffs of their own? Or just general uncertainty?
China's retaliatory tariffs on US imports increased to 84% yesterday, and that's before Trump's 3rd round of 'retaliatory' tariffs today increased US tariffs on Chinese goods from 104% to 125%.
So TomTom50's firm would need to cut its prices to Chinese customers by 46% to remain competitive with their German competitors. Their margin is unlikely to be anywhere close to that. So absent moving production out of the US, they are facing a loss of 50% of sales.
Except for a few services, no one's margins in the US are that high, and only a few in China. US sales to China are going to collapse over the next 30 days.
Adjusted annually, nearly a trillion dollars of world trade is going to vaporize.
You are right, our margin is nowhere near 46%. Maybe 10%.
Even if we could wave a magic wand and drop prices that low the tariff is charged at the Chinese port one year from now. The Chinese customer has no clue what the mad king will do in the meantime.
Germany, however, they didn't elect a crazy moron. Why would a customer take the risk?
The damage is done. We cannot stay in business manufacturing in the US. My options are move, sell, or die.
Completely understand, and thank you for sharing your situation.
This is one of many scenarios (that of exporters shut out) that the media doesn't seem to cover much if at all.
Thanks for your curiousity. I agree the ground'level impact isn't well covered, I sympathasize with the reporters plight. My company might be a good case example (interesting product, photographable plant, simple story), but how would a reporter know that? With local journalism gutted would the stripped-down local paper see promise in the story?
We are far enough down the road to authoritarianism that I would worry about retaliation if we went public, but once we relocate, that's another matter.
Sheesh, I hadn't even considered the retaliation aspect.
The US has changed so much so quickly, it's hard to rewire one's mind to this after a lifetime.
Uncertainty and likely retaliatory tariffs.
The real problem, as with so much else in this Trump/Musk blizzard is simple. Half the nation re-elected to the presidency a man who has over an entire lifetime proven himself little more than a periodically successful huckster and con man, a man who has proven over and over again to utterly disdain and disavow our electoral process, our Constitution, the the rule of law, a man who has absolutely no sense of the nation we were designed to be, a man whose whole being is dedicated to only one combined end - the accumulation of as much wealth, status, political and financial power as he can manage, and to wholly evade responsibility or legal sanction for anything he does along the way. We are fully into Amendment 25 territory here.
Sadly, his Base almost unanimously disagree, believing in his quasi-Messianic levels of business acumen to magically return America to greatness.
Fox News and its smaller imitators have been pulling out all the stops for the past fortnight to dismiss/deflect/minimize/rationalize the economics of this Trump/GOP trade fiasco. Polling shows that while libtards like myself are utterly horrified at what GOP rule is doing to the economy, 85% or so of the GOP faithful are still very confident of an extremely positive outcome.
Give them a month or two for the tariffs to juice inflation to mid-Biden levels, and we'll see how deep that faith really is.
Honestly Trump already has given enough grounds for a Democratic House to file impeachment charges again. The Jan 6 pardons, the refusal to spend allocated government funds, the illegal firings, ignoring court orders...
Yes, he has. And I believe at least one member of the House has already done so. Until Democrats have a majority, however, it is a futile if justified gesture.
Anytime you can take Econ advice from “Bronze Age pervert” to default on our debt, you just have to do it. /s
“Tariffs will make America more manly”
Honestly, fuck you for even dignifying this with a response.
Fair.
Why?
To quote Oscar Wilde, "Everything in the world is about sex — except sex. Sex is about power". Or, if you're more modern, "the personal is political".
Politicians are too shy and culture is too sex negative to allow for an honest discussion about it, but to enable fucking (including within marriages) is what the entire socio economico political system is for. So, yes, the claim requires a response.
I'm sorry you're so scared of talking about sex you don't even want to try.
I'm sure you had fun writing that, but that's not really even OP's point. OP's isn't prudish, he is implying that it is such a stupid argument that it doesn't even merit a response.
Sure, it was fun. Shocking the bourgeois, as they used to say.
But it's also a serious point. I suspect prudishness b/c otherwise this argument is no more stupid than any of the others on that list ('tariffs are tax cuts"...) except the 'tariffs will provoke a recession, which is great to lower interest rates' (that argument isn't stupid, it's indeterminate. If tariffs provoke a recession, then yes. But maybe they don't and they're inflationary and they force the Fed to raise. And stagflation is obviously a distinct possibility).
10/10 headline no notes
Very well put, and well-explained, thank you. I expect I'll be deploying a lot of these when arguing with family members.
One thing I haven't seen talked about much is: the complete BS "showmanship" aspect. OK, yeah, it's Trump, and he loves drama. But... Responsible governing doesn't look like this! There is nothing to be gained by rolling these out as a surprise! He's treating international trade like a game show, and the chaos from that alone is bad. With everything else going on, the price tag for his need to be the center of attention isn't the biggest thing to worry about, but it's not zero. Those are margins in which people will suffer, lose their livelihoods, who otherwise would have barely squeaked by.
You're a braver man than me Noah: I lack the strength to explain to Trump supporters why their Dear Leader is actually a moron. If they have not figured it out in 9 years: they won't now. Trump's most powerful strength is turning every liability, somehow, into a win. The man literally just tried to throw the global economy into a tailspin for fun, and is now kinda declaring victory. It's literally that stupid meme of Trump signing tariffs and Trump supporters going "this will create jobs!" Then Trump removing tariffs and the MAGA faithful going "Art of the Deal!"
They're literally that dogmatic.
It's a matter of faith, Benjamin. Something MAGA loyalists have in abundance. You can have it too: Just watch FOX News for several hundred hours straight. You'll see, you'll see!
Fun article thank you. I have a quibble however. You said, " China is much more capable of running a self-contained economy and a self-contained defense-industrial base than America is. " Am I wrong in saying the US is mostly a domestic driven economy (70% of GDP domestic consumption) and China is export driven and given their demographics getting to a self sustaining domestic economy looks very unlikely? Or there are big nuances that make that all false?
They're both actually quite inward-focused economies! China was more export-oriented in the 2000s, but right now their flood of exports is really just overflow from domestic overcapacity.
Isn’t domestic overcapacity itself due to weak consumer demand / deflation?
Anecdatally, people in China tell me no one is buying anything right now.
“Tariffs will reduce interest rates, making it easier to finance the national debt”
It bears repeating: What in the hell makes anyone think the coin-operated, do-nothing Congress would take the opportunity to refinance the debt at lower interest rates? It passed up an opportunity to do so during the pandemic, when we were at zero real interest rates — a truly historical opportunity. Americans and some of the most cash-rich corporations refinanced mortgages and sold corporate bonds that payed 1-1.5%, respectively. And what did the coin-operated Congress do: Nothing.
Congress doesn't control the Treasury which is responsible for the Treasury security auctions. The mix of securities with different periods in large part reflects market demand for liquidity so a lot of US Federal debt is in shorter instruments.
“If you were a Senator or a Congressman from 2015-20, and you didn’t spend most of that time pushing for a giant refinance of our debt, you should spend the rest of your life embarrassed for your failure.”
— Barry Ritholtz
Holy crap, the Right has gone full post modern.
They have. That's why everything they're doing reeks of bad faith.
It’s like they believe in nothing anymore except owning the libs.
Again, very true. It's down to bare bones tribalism now. Once you've lost sight of means and ends like they have, 'cutting off your nose to spite your face' starts to seem like a reasonable thing to do. The US needs a third political party of some sort to stop the two main parties obsessing about each other to the exclusion of all else.
Why are Russian products exempted?
Officially, it's because we've already put sanctions on them, so surely we don't have any imports from them anyway.
But in practice, that excuse didn't apply to the penguins on Heard Island or Norfolk Island, who we definitely weren't importing anything from, and we are actually still importing billions of dollars of goods from Russia (a small fraction of the amount we import from France or Cambodia, true, but a lot more than the amount we import from some of these random islands that got their own tariffs).
But we know it can't be because of any sort of Trump-Russia collusion - Bill Barr proved that this would never happen, so it must just be some sort of incompetence in the Trump administration.
Those penguins on their stupid island can suck it.
That island is vital to US national security.
Like that island we put tariffs on where the only occupants are on a U.S. military base... winning!
They didn’t sanction Iran either. Is Trump buddies with the Ayatollah now too? Come on.
Small islands are not the big gotcha people think. Pre-existing tariff schedules are super thorough territorially. Those tariffs are also of little consequence. New tariffs on sanctioned countries would be a big part of eventual negotiations with those countries, so there is more reason to actually put off the sanctioned countries for now, whom we trade quite little with.
Even if one sees a place for tarrifs (and many do, including on the left), what makes Trumps actions awful are that:
1) He is creating chaos and uncertainty toward an uncertain outcome by taking unilateral action before any negotiations.
2) He is targeting the deficit itself rather than unfair trade practices per se.
3) He is viewing each bilateral deficit as problematic in and of itself, which is crazy. Balanced trade and prosperity together require surpluses with some nations and deficits with others.
… and probably a few more elements too, but I find all the piling on RE: Russia, tiny islands, chatGPT etc. to be rather bad faith. With so much obviously rotten, why do we need to start speculating about more bad?
I think the serious version of the complaint is that the fact that Russia and Iran weren't even on the "default 10%" list is one more piece of evidence of how slapdash the process has been. The charitable version of that is that they got a list of countries and territories somewhere, put tariffs on everything (including a default 10% on some of them where they had no data) and then someone noticed that there are sanctions on Russia and Iran so they thought they weren't supposed to be on the list, and removed those, but didn't check the ones they had never heard of.
Well said.
What I see at a basic level is a need to see bad intentions and not just bad reasoning.
I abhor Trump but I think he is doing this because he genuinely believes it’s good for the country. As self-centered as he is, he ultimately wants people to think he lead the country well.
Quite possibly! He seems to have a lot of affection for autocratic rulers - Putin, Xi (even if he's antagonistic against China on tariffs), Kim, Orban, MBS... I would certainly include the rulers of Iran on that list.
We can call out the economic stupidity of the tariffs while also pointing out that the imposition was slapdash (reflecting incompetence), and with questionable omissions (reflecting corruption and a re-ordering of U.S. diplomatic coziness). Let's walk and chew gum at the same time.
It’s fine to criticize implementation. It’s bad faith to grant wild speculation. Your first paragraph is a great example of it.
Trump boasted about wonderful fawning letters he got from Kim! He never says anything negative about Putin! Jared is quite close with MBS and CPAC has been held in Hungary as a sop to Orban. The idea that it is "wild speculation" to say that Trump has a lot of affection for autocratic leaders is laughable.
It’s wild based on what we know about the Trump-Iran relationship. You are taking one true critique “Trump has heaped too much praise on some Autocrats” and just branching out into a totally baseless theory of why sanctioned countries were considered to be outside of this round of “new normal” US trade.
You know why, even if it's uncomfortable to admit it
Because Ukrainian products aren't?
I support tariffs because I am utterly miserable and yearn to make others miserable, even if it increases my own misery as well. Debate me.
(/s, as I hope should be obvious.)
Boy that was depressing. And you didn't even mention the non-China tariffs that he left in place. Suspect the equity relief rally may have forgotten that as well.
Meeting the goal of lowering interest rates and inflation seems as unlikely now as it did before the announcement. DODGE looks to be draining a lot less of the swamp than was targeted and MAGA is still focused on "tax relief". It seems the only hope to motivate MAGA in this regard is to bring back the bond vigilantes. The stock market swoon is said to have motivated the 90 day pause, we'll see what further adjustments sticky high long term rates may bring about.
Red-bashing aside, the MAGA movement has remarkable similarities with Maoist China before liberalization: it's not for nothing that Mao was (in)famously referred to as the "Great Helmsman," given how arbitrary his policies often became (just think of all those backyard furnaces). Maoism was in many ways a populist movement within the broader communist tradition, one that the power and autonomy of the masses (represented, of course, by a cult-like Great Leader) against a feckless and self-serving deep state bureaucracy (a quick dive into the history of the early PRC will show that the Cultural Revolution was primarily directed against the CCP party bureaucrats, including longstanding figures like Deng Xiaoping, Peng Dehuai, and our very own Xi Jinping).
Also btw wtf is with the normalization of far-right reactionaries? I know we're officially "post-woke" and that a broken clock is right at least twice a day, but having Noah namedrop Nathan Cofnas here really leaves a bad taste in my mouth.
Maybe we should start calling him Chairman Trump and using the term MAOGA?
Especially since the link to Cofnas seems to say that it was shared by Richard Spencer!
“. . . blanket tariffs are a mistake. I understand the motivation: a big reason why Chinese imports to the U.S. have actually shrunk over the last few years is because a lot of final assembly moved to countries like Vietnam, Thailand, Mexico, etc. Blanket tariffs stop this from happening, at least in theory.”
Ben Thompson, Stratechery
Classic Noah 🙌