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Donald Trump channels his inner Leftist Well, he went ahead and did it. In a ceremony outside the White House, Donald Trump unveiled a list of tariffs on countries, on “friend and foe”, starting with a minimum of 10% (the UK, which is now outside the European Union, was hit with the 10% rate, while the EU was hit with double that amount). In general I see this as a bad day for the US and world economy for all the sort of reasons I have laid out.
This will not adjust the worldview of the red hat wearers, but I wonder has it ever occurred to Mr Trump’s fans that his arguments, when adjusted for a bit of rhetoric, are more or less leftist stuff from the 1990s?
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The labels of right and left are increasingly meaningless. Giving a shit about the working class seems to be an almost entirely right wing phenomenon these days. However, the article does actually point out the red hat wearers are entirely correct to be suspicious of globalisation:
Too right. Of course the working and middle classes in the global north have been well aware of this for years. Stagnant wages, failing public services and great swathes of the nation looking like Karachi. No wonder we see growing “ethno-nationalist and anti-immigration components”. If a tariffed, protectionist world means lower immigration, then bring it on.
Even Theresa May spotted that:
Economists and libertarians tell us: “Tariffs will make you poorer”. Most people in the USA/UK would reply: “So no fucking change then?”
Why not get rid of the 10% tariff on US imports? Wouldn’t that make Mr Trump. and the entire UK population, happier? I’d personally feel a lot better buying US made goods than Chinese ones.
Economists and libertarians tell us: “Tariffs will make you poorer”.
Tariffs are taxes. If you tax something, you get less of it.
Also, tariffs are regressive taxes, so unless outweighed by other tax changes, the distributional impact is not great for those who are not well off.
Also, Marius, your point about the UK industrial base ignores how much of the damage was done as much by terrible industrial relations, crippling taxes and lack of investment, as the alleged harms of all those wily foreigners selling us cheap stuff.
The industrial heartlands of the UK boomed in the middle of the 19th century at a time when the UK had, with great controversy, moved towards free trade. Things started to go sour in the years immediately before WW1 and then further retreated in the protectionist upswing of the inter-war period. I don’t see the demise of UK manufacturing as being largely an issue caused by open trade. And to the extent we are committing follies now, it is more to do with Net Zero and things such as that.
Why not get rid of the 10% tariff on US imports? Wouldn’t that make Mr Trump. and the entire UK population, happier? I’d personally feel a lot better buying US made goods than Chinese ones.
Agreed. Even if it is not immediately reciprocated. The UK will still be better off, and unlike China, the US is somewhat less likely to steal UK intellectual property, although you never can be sure.
There were always right-wing critics of globalisation.
The left-wing critics of globalisation, at least outside of union workers who were understandably more concerned about protecting their members jobs, in the 1990s largely objected to the type of globalisation offered by the Washington Consensus, EU, NAFTA, WTO etc. They used to speak of alter-globalisation as being what they were for.
Right-wing critics of globalisation often saw globalisation as inherently suspicious as it has levelling, internationalist and universalistic tendencies at odds with national sovereignty and particularism.
I’d argue that the most pro free trade presidency in recent American history in terms of actions was Bill Clinton’s (contrary to his rhetoric Reagan’s policies were often very protectionist – see the high tariffs imposed on Japan in the 1980s) – NAFTA was established, WTO established, China invited into the WTO. Clinton’s presidency was also overall very left-wing.
You can argue the case that NAFTA, WTO and EU etc are not really ‘Free trade’, at least not like 19th century free trade. And I’d have some sympathy with that view. However, the Nafta, WTO, EU style free trade is all the establishment offers right now.
I suspect this is one area where Britain simply does not understand America.
In Britain, factory work was seen pretty much as the bottom of the barrel: badly paid and sometimes dangerous. Anyone who worked in a factory had one ambition: to get out. Or, if it was too late for him, he wanted his kids to get out. (I think of my late grandfather as I write those words. He worked in a factory for over fifty years, and was determined that my father and my uncle would not.) As a result, while it caused short-term disruption, there were few long-term protests when the factory jobs went overseas. Certainly, no major British political party is currently calling for protectionism.
By contrast, factory work in America paid decent money: a factory worker could reasonably expect to buy his own home and run a car. I’ve heard stories of people who actually liked working at the local General Motors’ plant, and looked forward to the day when their children would join them there. Only the children never did, because the plant closed and the jobs went overseas. Free-traders and globalists promised that those lost jobs would be replaced by better, higher-paying jobs, but that never happened and many communities were left devastated.
Although Trump has called them reciprical tariffs the chart linked to below show that the tariffs of many countries are higher than those that Trump is imposing:
https://voxday.net/wp-content/uploads/2025/04/image-2.png
Although Trump has called them reciprical tariffs the chart linked to below show that the tariffs of many countries are higher than those that Trump is imposing:
Because in his graciousness he has imposed a special discount, it’s pace and lead.
There is a perfectly simple first step which is offering to cease the barriers to entry (whatever they decide to call them) which countries have been imposing on imported US goods.
This rarely enters the discussion.
tariffs of many countries are higher than those that Trump is imposing:
I doubt the “including currency manipulation and trade barriers” part can be objective / accurately assessed… And that one screenshot does not show who and how did the assessing.
“A mindless stampede toward protectionism will be a one-way trip to economic disaster. That’s the lesson of the Smoot-Hawley tariff in 1930, which helped to trigger a worldwide trade war that spread, deepened, and prolonged the worst depression in history. And I know; I lived through that period. I’ve seen and felt the agony this nation endured because of that dreadful legislation. If we repeat that same mistake, we’ll pay a price again”
– President Ronald Reagan, September 17, 1985 press conference
He says that, then sticks 100pc tariffs on Japan.
While looking at a man’s rhetoric is fine, it’s more important to look at his actions.
During the speech President Trump denounced governments for currency manipulation – which means making their currencies artificially low in their exchange rate to the Dollar, promoting their exports to the United States and costing America industry-after-industry.
However, this implicitly accepts that having the fiat U.S. Dollar as the “world reserve currency” is a bad thing for America – something that President Trump has (at least implicitly) denied in the past.
So which is it? Is the “strong Dollar”, i.e. the absurdly high exchange rate of the Dollar, a good thing or a bad thing?
Given President Trump’s objective of bringing back manufacturing back to the United States, he should accept that having the fiat Dollar as the “world reserve currency” is a bad thing – and accept that the exchange rate of the Dollar should be radically lower.
If the Dollar had a more realistic exchange rate (i.e. a radically lower one) the tariffs would NOT be required to reduce imports – as the process would be automatic.
However, that would accept that American living standards are inflated – are no longer justified by American industrial productivity, not something that anyone in American politics is prepared to accept.
“Vote for me – and I will drastically reduce your consumption so that you live within your means” is not a popular election slogan.
Radu, I doubt the “including currency manipulation and trade barriers” part can be objective / accurately assessed… And that one screenshot does not show who and how did the assessing.
Quite. And Denmark-based economists Lars Christensen has these thoughts on how these tariffs are calculated:
The truth is, if you take ALL the customs rates and add them together with any assessments of undervalued currencies and ANY technical trade obstacles, you can’t, at all come up with “compound customs rates” of the order of magnitude that Trump presented yesterday.
You don’t have to have worked a lot with the international economy (I’ve been doing it for 30 years) to realize that. So something was obviously wrong.
And yes, they had just taken the US trade deficit over individual countries and divided it by imports. That’s a completely arbitrary number. That formula has NEVER ever been used in international economic theory and it says ZERO about the actual tariffs and obstacles to trade. In fact, it is by construction extremely harmful to the international division of labor.
Martin: yes, R Reagan was no purist, and his treatment of Japan was poor. And look how well that worked out for the US auto sector.
As for your more cultural point on the supposed “flattening” impact of open trade, and the supposed terrible phenomenon of a more common global culture, I will take that every day of the week to a more tribal, mutually suspicious, predatory model that Mr Trump – and many on the Left by the way – go in for. There has always been a mixing of culture and economics because of free trade. One of the most important effects of it is to spread ideas: about how to make and supply things, how to get different ways of working, etc. This point jumped out at me when I read the recent Silk Roads book by Peter Frankopan. In some ways, the world was highly globalized hundreds of years ago. As it was at the end of the 19th century, with steam ships, telegraphs, a gold standard, mass circulation newspapers, etc. Was there a cultural flattening then? To some extent – the wealthy were able to travel all over the place without a passport; it was also possible for the young and ambitious to seek their fortune and get on a ship to pastures new. Sounds good to me.
https://www.google.com/aclk?sa=l&ai=DChcSEwiQlcyX57uMAxUapFAGHaRiFZAYABAGGgJkZw&co=1&gclid=CjwKCAjw47i_BhBTEiwAaJfPpsaSuWKqMbCB0DnOp6uZZxYlQJcSm4tpC9s3Ybe-rn1KyhQ8UB61iBoC2PwQAvD_BwE&sig=AOD64_0R50x1x_O831_vIGA8ZEtCHKb0qA&ctype=5&q=&ved=2ahUKEwjQyMWX57uMAxWwVkEAHb_dMygQ9aACKAB6BAgHEBQ&adurl=
Tyler Cowen also has this useful insight about how culture and globalisation enrich each other, and counters this fear of “flattening” that some people fret about: https://www.amazon.co.uk/Praise-Commercial-Culture-Tyler-Cowen/dp/0674001885
It is also true that none of the countries that are now protesting have offered to reduce their barriers to American exports.
As President Trump asked in his speech – if freely allowing in exports is a good policy, why do other countries not follow this policy? Listing the burdens that American manufacturing exports face.
And it is not “just” American manufacturing exports.
Indeed, for example, the British government is pushing for more censorship – a policy clearly directed at American social media companies such as X and Gab.
Americans were told that they should move from manufacturing to services – but the export of services, such as social media, is being hit by the censorship policy of other governments – including the British government.
This is just as much “Protectionism” as a tariff on steel or cars.
“We want free access for Scots whiskey (and so on), but we also want to censor X and Gab and so on” is an untenable position.
Still a 10% tariff is half a 20% tariff – stand by for a lot more Irish whisky to be bottled at Bushmills in Northern Ireland.
Hopefully the “protocol” tying Northern Ireland to the European Union is going to be destroyed – remember that this same protocol (supported by both Boris Johnson and Nigel Farage – and rightly condemned by Ben Habib and Rupert Lowe) ties the rest of the United Kingdom to European Union law, for fear of “divergence” in law between English and Scots law and law in Northern Ireland.
Whilst the protocol remains in place, independence from the European Union (sometimes called “Brexit”) is an illusion.
As far as I’m aware Japanese car companies set up plants in America to manufacture cars for the US market there. Seems like an acceptable outcome for both parties.
As for whether income tax or a tariff does the more harm – another question President Trump raised in his speech.
Well even the arch free trader John Bright, hardly a “leftist” Johnathan Pearce, was horrified that “free trade” was used as an excuse to introduce an Income Tax (with all its horrible economic and Civil Liberties implications) in Britain. And President Trump was quite correct to denounce the 1913 start of the Federal Income Tax – this, along with the creation of the Federal Reserve system (that massive, and despicable, fraud) makes 1913 one of the worst years in American history.
Where President Trump is WRONG, Johnathan Pearce, is his refusal to deal the the entitlement programs that have exploded Federal Government spending.
In 1912 Federal Government spending was very low – it was easy to finance it by a tariff, today the “Entitlements” (the unconstitutional Entitlements) have made this impossible.
Yet President refused, in his speech, to cut “Social Security, Medicare and Medicaid”.
If one excludes consideration of these programs – then balancing the budget is not possible.
I am reminded of the “Reform” Party in British local government – they refuse to accept that most money goes on Adult Social Care and Children’s Social Care – and, instead, pretend that the money goes on big salaries for councilors and others – in reality a drop in the ocean in terms of the budget.
Telling people they can have no real cuts in services and low taxes – if only the “greedy” people are removed.
It is totally false.
https://x.com/zerohedge/status/1897298757584388224
The claims that such retaliation is irrational or against national interests or suboptimal or driven by politics or public relations do not fully answer the question, in my opinion.
Yes Donald Trump is in many ways a 1990s Democrat. If you look at both Trump’s rhetoric and his actions on crime, immigration, the border, shrinking government bureaucracy, deportations, judicial activism, cutting regulations, law and order, etc he is quite similar to what Bill Clinton said and did.
Stock market is down today so we know the tariffs are bad policy.
People who use metrics other than stock market number up to judge the merit of policies are troglodytes and economically illiterate.
The American working class wants more jobs, higher pay, better benefits, and more stable employment. But the experts know better. The experts are never wrong about anything so why would we start doubting them now
As usual, you are overlooking the JOBS benefits. The working class is in desperate need for more jobs, especially in manufacturing and factories. We need a lot more jobs for the poor and working class. The tariffs will help a bit with that.
And that is NOT a benefit for the rich.
By only looking at tariffs only as simply a tax, you are not seeing the big picture and you are not taking into account the full comprehensive effects of this tariff policy. Jobs, jobs, jobs.
I think Trump was a Democrat in the 90s, and his opinions haven’t changed much since then. Reagan when he was president would say he was pretty much the same as a Kennedy Democrat. Must was a Democrat like 2 years ago.
I see Trump as our last best hope for the USA to avoid becoming just another Germany – a socialist EU member with no freedoms, 50% immigrants, no lights or power, and a spiraling-down standard of living.
Accepting Trump in that role, I think it stupid to then micromanage him. If small cost-free steps could have fixed things in this world, the Tories might still be a viable group in the UK.
The USA has gotten itself into a very bad place. We can get out, but I doubt we can get out cheaply. What I see today are the chickensh*t fake conservatives who were gung-ho on fixing the country up until yesterday, but who are now outraged that they might be expected to bear some of the cost.
Yes, tariffs cost money. So does war. This is basically war, not a simple act of tax policy.
“Oh, no, if we drop that bomb, it will cost us the price of that bomb! How will we profit from this war if we do that! Can’t we just shake our fists at them?”
No.
@Shlomo Maistre
The anti-global-warming and anti-covid policies we’ve seen show that national leaders are completely capable of embracing irrational and enormously destructive policies.
You are saying that harming the economy a bit, hurting people’s 401ks, hurting GDP growth, hurting Wall Street, hurting stock market growth, disregarding Ricardo’s comparative advantage, reducing BlackRock’s precious profit margins are *WORTH DOING* to create more stable middle class jobs for the working class in manufacturing and in factories to help with family formation, reduce deaths of despair, reduce drug addiction epidemic, increase marriage rates, reduce unemployment, give working class men more purpose and mission in life, give Americans more stable job opportunities that do not require going hundreds of thousands of dollars into debt by attending college, give young men more paths to stable employment without attending university??
But don’t you know that GDP number up is not only the best metric but also the only metric for judging the merit of policies? What are you, a savage ignoramus? Don’t you know that GDP number up is all that matters?
Yes absolutely true. Also the pro-globalization crowd embracing devastating policies show that national leaders are capable of embracing enormously destructive policies, as well.
But who cares about destroying the American middle class if the stock market number goes up? That is all that matters, you economically illiterate troglodyte!!! Have you even read David Ricardo’s writings on comparative advantage? Sheesh.
“What are you, a savage ignoramus?”
According to my passive-income/investment-income friends today, I must be. The midwit big-money class is outraged!
Paul Marks: Yes, John Bright and others around the Anti-Corn Law League campaign were not happy about Peel’s restoration of the income tax, first introduced by Pitt II. Of course, back in Sir Robert Peel’s time, the UK state took a small slice of total economic turnover. The biggest spending item was, I think, the Royal Navy.
Shlomo: the 1990s Democrats were fairly pro-free trade – at least the likes of Clinton and Gore were. Clinton’s Treasury Secretary and deputy, Robert Rubin and Larry Summers, were both fairly solid on that topic, and I interviewed both men in my time as a financial journalist. This was the post-Berlin Wall period, when free trade was seen as the orthodoxy of the time.
You think that ordinary American workers will be unmoved by falling stocks and so on. Well, maybe. Rising inflation, fewer choices of supply and so on might start to wake them up a bit. And remember, stocks are ultimately driven by expected future earnings. Bear in mind that US companies factor in foreign costs as part of their business. The world is very inter-connected. Unless the US reverts to autarky and insanity, that is not going to go away.
The working class is in desperate need for more jobs, especially in manufacturing and factories. We need a lot more jobs for the poor and working class. The tariffs will help a bit with that.
How to explain, then, that there is already relatively low unemployment in the US? There is, as the broadcaster Mike Rowe has explained, a shortage of people to work in occupations such as heating engineers, plumbers, industrial welders, lab technicians. There is a problem with an under-supply of folk in technical and vocational skills, and an oversupply of arts graduates. If the manufacturing and related sector was in such trouble, that would not be the case.
The whole idea that the US needs these tariffs to protect manufacturing is based, in large part, on nonsense.
Holy moly, do you seriously believe those numbers? Are you kidding me? I know you and I have our disagreements on certain subjects, but I genuinely thought that you would know those numbers are completely fake and have been fake for decades. Even just looking at how they calculate the labor force participation rate is preposterous to the point of hilarity.
Next you are going to say you believe the inflation data are accurate too?? YIKES
I was just responding to your claim “This will not adjust the worldview of the red hat wearers, but I wonder has it ever occurred to Mr Trump’s fans that his arguments, when adjusted for a bit of rhetoric, are more or less leftist stuff from the 1990s?” Most Trump supporters including myself are, in fact, very much aware that Trump is on many political issues not much different from a 1990s Democrat.
Shlomo, as Paul Marks will back me up, official data tends to understate inflation, not the other way around .
If the figures start to show that tariffs are pushing up prices and squeezing real incomes, I would bet that the reality is even worse.
Yes official data significantly (perhaps even MASSIVELY) understate both unemployment and inflation. I have little doubt that there will be significant price increases as a consequence of Trump’s tariffs. What’s your point?
If I were generous, I would say that the premise of the OP is naïve. It seems to me that Mr Trump is simply saying to the World that the USA has been screwed over on tariffs for far too long and he is working at parity. If you drop your tariffs on US goods, he will drop the US’s tariffs on your goods, reciprocal tariffs.
From the OP:
Since the figures that Mr Trump is using show that the EU charges a 39% tariff on imports from the USA (I assume that this is weighted) and the OP makes no condemnation of that policy of the EU, one might be driven to wonder whether this is simply a mild case of TDS.
After all, not only are Trump’s tariffs on the EU lower than the EU’s on the USA, they might push the EU to lower tariffs, and when the EU does so, on that chilly day in a proverbially warm place, and it is reciprocated, the wonders of comparative advantage will become more manifest.
As of now, all that the USA has done is to call out those who have been putting in place tariff and non-tariff barriers to trade and say ‘Game on’. And there is talk of abolishing the Federal Income Tax. What’s wrong with that?
The large majority of the laptop class has FOR DECADES been heaping scorn and opprobrium upon the very notion that maybe USA should enact tariffs on foreign products in return for the tariffs (and other forms of taxes) foreign countries have enacted against American products. The majority of the laptop class loves to heap opprobrium on USA for implementing tariffs but hardly ever raises even a single word of objection about the tariffs other countries have enacted against American products for many decades.
This pattern of behavior has been going on for decades long before Trump came down the escalator in 2015. So I don’t think it’s evidence of TDS.
This has simply been an embedded feature of the culture of the globalist managerial class for many decades throughout the western world.
“I wonder has it ever occurred to Mr Trump’s fans that his arguments, when adjusted for a bit of rhetoric, are more or less leftist stuff from the 1990s?”
Well, Mr. Trump’s base is the blue-collar left, so it all fits.
I think this is probably the first time that most americans will realise how much the USA was walking the walk of lower trade barriers and lower tarriffs, whilst letting other countries eg EU, China, Brazil, talk the talk of free trade but impose tarriffs against the USA.
Noticeably, not single person is denying that the USA has been facing persisently higher tarriffs than they have been levying.
The big bad orange man is simply walking the walk of his critics in foreign governments.
As far as the UK is concerned, it should go full unilateral free trade. Successive neo-liberals false pietys have already destroyed everything there is to destroy.
Yes thats how Trump won the 2015 GOP primary contests against other Republicans is by winning the votes of the “blue-collar left” lol. That is how Trump won the Republican nomination for POTUS back in 2015/2016 – by appealing to the “blue collar left” lmao
Well, folks, the stock market is down today. Now we know it is a wrong-headed counterproductive policy
“Yes thats how Trump won the 2015 GOP primary contests against other Republicans is by winning the votes of the “blue-collar left” lol.”
Well, phrased slightly differently, that’s what he sorta did. He won by attracting much of the blue-collar vote – which has for eons been Democrat – to his side.
He really did upend the traditional party distinctions. I know lots of rural “traditional Democrat” voters who are now solidly Trump voters.
(Not so much “Republican voters”, so I’m not sure if this movement survives his exit from politics.)
“blue collar vote” and “blue-collar left” are not the same thing. Trump won many closed Republican primaries where only Republicans could vote. So what he said is retarded. But yes, Trump did upend traditional party distinctions – and thank god for that.
https://x.com/realmattforney/status/1907604914680786972
https://x.com/realmattforney/status/1907853060250227186
The lolberts are the lolbertarians
The point is that those who thought Trump will cut inflation are going to be disappointed. At which point the idea that his mercantilism is a good idea will be discredited.
You claim my point about job shortages for certain occupations is nonsense. Well, I’ve seen this from several https://ever-roll.com/where-have-all-the-welders-gone-a-look-at-welder-shortage-in-the-us/#:~:text=By%20the%20year%202020%2C%20the,trade%20jobs%20in%20recent%20years.
Since all you offer is blustering indignation I’ll treat your reply accordingly.
The idea that America doesn’t have worked for those in skilled trades is bunk. And tariffs are unlikely to help. In fact, by raising input costs, this will worsen the situation.
So why do you think American factory workers were happy and relatively well off and British ones weren’t? Without explaining that difference, the argument falls flat, I should have thought.
I’ve referred to the EU before and its Customs Union in my previous post.
I’m against all tariffs. Period.
Send a nurse!
That is how Trump won the Republican nomination for POTUS back in 2015/2016 – by appealing to the ‘blue collar left’”
Yes, it is. That’s exactly what happened. Where else did his support in the 2016 Republican primary come from? There are four main factions in the Republican coalition. Which one did Trump carry in the 2016 primary?
Not the Christian conservatives. Their primary issues are opposition to abortion and gay marriage. Not only had Trump been a pro-abortion Democrat his entire adult life, in all probability he personally paid for one or more abortions back in his philandering days. No, the Christian conservatives supported #1 Ted Cruz and #2 Ben Carson.
Not the national security conservatives. Their primary goals are a strong national defense and an aggressive foreign policy. Even in 2016 Trump was threatening to dissolve NATO and the Asian alliance. No, the national security conservatives supported #1 Ted Cruz and #2 Marco Rubio.
Not the business conservatives. Their primary aims are tax cuts and reductions in business regulations. They would seem to be a natural ally for him, but instead Trump was calling them out personally and ridiculing them as “establishment Republicans.” No, the business conservatives supported #1 John Kasich and #2 Jeb Bush.
Certainly not the libertarians. The libertarians are the only faction of the Republican coalition openly in favor of open borders. No, the libertarians supported #1 Rand Paul and #2 Carly Fiorina.
No, none of the major Republican factions supported Trump in the primary, though most did in the general because Hillary was so awful. He won by pulling in a large block of voters from outside the party while the existing coalitions were split in their support among a large number of candidates.
During the first Trump administration, Trump may have been at the top, but the party apparatus was still controlled by members of the original four factions. Trump spent much of the four years between terms purging party higher-ups of people insufficiently loyal (not just to himself but to his base). As a result his second administration is governing much more toward his base.
Severing alliances and erecting trade barriers are natural outcomes of that.
“Factory work” is not the same category as “skilled trades.” Welders have their pick of jobs. Unskilled people who are trainable to put a windshield on a new car or run a polishing barrel are a huge category, who now have no such employment prospect.
No, but I think it is proper to say that Trump converted much of the “blue collar left” into the “blue collar right.”
So I think you two are agreeing on principles but not on words.
mkent appears to believe that the majority of registered Republicans as of 2015 were “blue collar left”. It is truly amazing how deluded some people are about Trump.
Absolutely true, but that came later.
I am talking about 2015 Republican Nomination when Trump fought against the entire Republican Party apparatus in the primaries across the country state-by-state to become the GOP Nominee for POTUS in 2015/2016. Trump did not win that Republican nomination thanks to “the blue collar left” and anyone who knows even rudimentary facts about American politics knows that would be impossible.
At that time the blue collar left was mostly voting for Bernie Sanders in the Democrat Primaries against Hillary Clinton.
Ah, yes. “alliances” whereby we pay for a foreign country’s national defense, send them billions dollars of foreign aid, economic aid, military aid, finance their broken countries through World Bank, United Nations, IMF, etc, protect their trade routes with our incredible navy, bring in millions of their felons, criminals, and bad hombres, give these illegal aliens free healthcare, free housing, free food, and welfare, import zillions of dollars worth of their goods and products and services from these allies with basically zero tariffs, and try to sell American products that face massive tariffs and other taxes and restrictions when we try and sell into their markets hurting our exports and harming our domestic manufacturing.
Man, with allies like these…
https://medium.com/@pauljoeypowers/how-companies-can-navigate-tariffs-with-ai-powered-part-search-b59cba412032
https://x.com/PaulJoeyPowers/status/1897680637164666886
some interesting takes from the legacy media, apparently Mr Trump has destroyed the stock market when actually it is where is was mid-March, and whilst railing at Mr Trump for destroying British industry it ignores Mr Pooh and Mr Modi currently wrecking our steel manufacturing.
Shlomo, if components available overseas are cheaper in the US, why would firms that seek to increase profits not use them? What explanation for such refusal to buy home-grown stuff is there, unless the materials are less well made (possible), have terms and conditions that are not explained (maybe), etc?
Meanwhile, in the actual real world (Wall Street Journal, April 3): https://www.wsj.com/opinion/donald-trump-tariffs-disturbance-markets-trade-243b36ef?mod=wsj_furtherreading_pos_3
Worse is the bizarre, slapdash way the White House calculated the tariff rates on individual countries. Everyone will pay 10%. Then the White House appears to have calculated each country’s additional tariff rate by dividing its trade deficit with the U.S. by its exports to the U.S. This rate was then cut in half for most countries, which Mr. Trump calls a “discount.” The discordant result is that U.S. adversaries like Iran (10%) and Venezuela (15%) will pay lower rates than friends in Europe (20%), Japan (24%) and Taiwan (32%).
mkent: an excellent summary of where the Republicans are and what has happened. It will be interesting to see what happens to that coalition, and indeed if or when the Democrats can get their heads straight, ditch the woke bullshit and focus on what most ordinary voters want.
The stock market fell by the most yesterday since when markets were shut because of Covid. That’s a lot of retirement portfolios. But according to the MAGA folk, only very rich people own stocks so the great mass of the public are unaffected.
By the way, here are a couple of other stories about the shortage of workers for manufacturing and construction jobs, which also shows how this “foreigners are taking all our jobs” trope is built on a total misreading of the facts. The problem is a lack of skills, including in STEM subjects, and a deranged education system. It is not the fault of free trade.
https://hrforecast.com/the-stem-skills-gap-a-growing-challenge-for-countries-to-overcome/
https://www.ecisolutions.com/blog/manufacturing/manufacturing-jobs-deficit-which-us-states-are-struggling-the-most/
If you do a few Google searches, there are scores of stories such as this. I cannot vouch for the statistical credibility of them all, and there biases to bear in mind, but if it really was true that there are millions of ordinary Americans absolutely dying to work in a factory or building site, rather than in a service/high-tech job instead, I think we’d see that in the labour market.
There is a probably going to have to be a big change in the US higher education/college/education system to acomodate the impact of a re-shoring of manufacturing, assuming that is what happens on a large scale.
Increasingly, I see the rise of rightwing nationalism and economic collectivism, at least on issues such as this, as a menace every bit as large as some of the nonsense on the Left that I usually have written about over the past 20 years. I kick myself for not paying it closer attention.
It is too early to judge the eventual impact of these new tariffs. A booming USA remains a possible outcome. However, as I recall, the EU was set up with tariff walls on the borders as a key feature, and it has not been a great success. Trump’s actions may yet lead to tariff reductions around the world.
Yes, there is an enormous skills shortage in key things. If you have a useful skill set you can (this is in England, anyway) work when you fancy. I actually have an NHS dentist and hygienist. Praise the God of Teeth! Getting hold of an electrician is like getting an audience with The Pope. Getting hold of a plumber (especially a CORGI one) is like meeting God. I suspect the same applies to skilled manufacturing jobs. This re-shoring will take a lot of time to put right. I don’t think Trump understands the complexities and time-scales involved. When you lose an industry that does anything even vaguely complicated and the whole eco-system of sub-contractors and parts makers that goes with it then it is incredibly difficult to get back.
Furthermore… How well does Trump really understand business in general? I have often wondered this and after his “plan” to turn Gaza into a country club I really do wonder. Digging the sand-traps on the golf course will be “interesting” considering the Hamas Subway and the sheer quantity of UXO…
Tariffs are taxes.
If Trump uses tariff income to reduce income tax rates (and the deficit) – then I think it is an experiment worth trying.
Another effect might be the reduction of other countries’ tariffs – which is also desirable.
If Trump uses tariff income to reduce income tax rates (and the deficit) – then I think it is an experiment worth trying. Another effect might be the reduction of other countries’ tariffs – which is also desirable.
Any offsetting tax cuts to mitigate the damage the hikes will cause would be a good idea, although the distributional impact means different people benefit/suffer from whichever way the tax jigsaw puzzle is assembled.
It would be a grave error for the EU and others to retaliate, but the political pressures on countries to stand up to Trump and his madness are considerable. Unfortunately, I see the global economic pie contracting. Bad times ahead.
NickM: I agree that Trump seems to operate under the illusion that there are millions of Americans who are ready to get away from their PCs and put on a set of overalls, and make sneakers, car parts and fridges instead of letting them be made by Vietnamese women, etc.
There will need to be specific increases in those with skills to run chip fab plants, shipyards, etc. A less confrontational, foolish POTUS would in fact get engineers from around the world, in friendly countries, to help out. Maybe some of that will happen.
Another, even more fundamental issue is the disaster of US primary and secondary education, with issues around maths and reading. That’s a topic for another day. I haven’t seen much from the Trump administration on this topic.
I haven’t seen much from the Trump administration on this topic.>/i>
Doing away with the centralised control exercised by the DoE and allowing greater input by individual states will be a significant change. My American niece, who has taught for nearly 20 years in both the public and private systems, has provided me with first-hand insight into the kafkaesque structure, lack of discipline and mind-numbingly low standards of the former.
Only time, and the inevitable intervention of federal district judges, will tell if it improves standards but at least he’s trying something different.
Apologies for my lousy formatting.
Unless Congress passes massive tax cuts immediately, or at least on a timescale on par with the economic impacts of the new tariffs, there will be no boom. There will be a YUGE recession and the Republicans will lose the Congress and most of what Trump has done will be undone. Without the tax cuts, all Trump can do is back down to any country threatening retaliation. Assuming he wants to avoid losing everything he’s gained.
So, I’m very confused, since Trump said as much in recent weeks, why are we not reading about the tax cut push? Everyone should be talking about it: Trump, R leaders, D opposition, talking heads, and bloggers!
Is this discussion, and political push, happening and I missed it?
And if it’s not happening, who is to blame? The Stupid Party’s leaders no doubt.
I gotta say, Johnathan has been consistently against tariffs in any direction and between any countries for about as long as I remember seeing his posts. He shouldn’t have to caveat every post about new tariffs with “and of course, obviously, for the 18 hundredth time, I’m against existing tariffs” – that would just be tiresome for him to add and for us to read.
1. Theory and reality are different things.
2. Some CEOs and their underlings are stupid, lazy, or both.
3. Some CEOs do not want to upset the apple cart and do not want to disturb the status quo.
4. Many commercial/supplier relationships are built up over many years and personal relationships are formed around them.
5. The tariffs may serve as just the kick in the pants needed to aggressively search for alternative suppliers that may in some cases turn out to be cheaper, come with better terms and conditions, and be of higher quality as well.
6. In economics, “friction” refers to anything that impedes market activity, preventing markets from functioning as efficiently as predicted by economic theory. One example of friction is IMPERFECT INFORMATION.
7. Not every CEO is Hank Rearden
FWIW, BobbyB hits it on the head. We are not in business as usual, the west is collapsing on its own decadence, on its loose money, and massive government spending, and desperately needs to be shaking up before it dies and we all have to learn to speak Mandarin.
Under normal economic circumstances tariffs are a terrible idea. Under normal circumstances trench warfare in Ukraine is a terrible idea too. But we are right at the end of a collapse of the Western system. The USA has 38 trillion dollars in debt and another 100 trillion dollars in unfunded liabilities.
All over the web I see people bitching about Elon’s supposed cuts to Social Security “I’ve been paying in since I was 18, so it is MY money” they say, without realizing that the evil bastards in Washington STOLE it all already.
What does that have to do with tariffs? It is all part of a final rescue package for the USA, and in rescuing the USA rescuing the rest of the west too. Rescuing them from their own folly.
In a war you destroy things and kill people in the hope that the massive short term losses will result in massively compensating long term gains. I don’t think trade imbalance is a bad thing, but what I do think is that massively unfair trade regimes are a bad idea and in almost all cases the United States has gotten the short end of the stick.
Remember that those barriers to entry that the EU or Australia or Brazil puts up are damaging to Europeans and Australians and Brazilians. The purpose of a war, whether military or trade, is to trade short term pain for a resolution where the bad stuff is replaced by a better world. If reciprocal tariffs force down tariffs overall then that is good for everyone. If foreign governments retaliate…. they will not win against Trump. He is merciless, relentless, and is looking for someone to make an example of. So it seems to me the only option is to reduce tariffs bilaterally, and open up freer trade. It is notable that the day after this is already happening. Israel, for example, has dropped all tariffs with the US and India is considering following suit.
So, if you look only on the surface it is about increased tariffs, but Trump is a deal maker. And I think it is ultimately about lowering international tariffs.
There are two other matters relating to tariffs to consider, both related to onshoring, namely defense and jobs and both are non trivial.
Regarding defense, I think a lot of people were pretty scared after what covid revealed about our vulnerability. As I said before, we could have the F-35 and the Ford class aircraft carrier manufactured in China much cheaper than here. But presumably it is obvious why that is a bad idea. And many of the same reasoning apply to a desire to have, for example, antibiotics manufactured domestically, or at least in a friendly country.
As to jobs — in a pure economy tariffs are not relevant to jobs. But in an economy with a massive welfare state, allowing jobs to offshore is a very significant direct strain on the economy. And in a country where most people don’t have a clue what tariffs are the political consequences to onshoring jobs is dramatically important to allowing the political capital to keep the MAGA rescue of the west alive. FWIW, I think it is very vulnerable, and I think the survival of the West will largely be determined in November 2026.
Or to summarize — we in the west are totally fucked. I have been convinced that the west would collapse in my lifetime. There is maybe one hope of rescue, and MAGA is it, and not just for the USA but for the whole west. Will I work? I don’t know, but it has a non zero chance of working. If your boat is sinking you might as well try to swim ashore even with the sharks in the water, because some chance is better than none.
There are a few things Trump is doing that make me queasy, and tariffs are certainly one of them. But really, the alternative is that the west continues to circle the drain. And maybe a trade war is sufficient to bring about a world with much freer trade.
Yeah, please, let’s get the federal government more involved in this!
One of Trump’s most important efforts is the ending of the federal woke-education department, which had been empowered to order schools across the country to devote effort and money and time to areas apart from reading, writing and math. With their demise, we should see better student performance in such areas.
But – Trump is ignoring the issue? Where are the libertarians here?
MAGA folks are not saying that “only very rich people own stocks”. More strawmen arguments. The fact is that a higher percentage of the wealth of the very rich is tied up in the stock market, while the middle class and the poor have a higher percentage of their wealth tied up in their house and other hard assets.
The tariffs may increase consumer prices, increase wages, and lower stock market value. For the super rich all three of these effects are very negative, which is why the mass media is hysterically shrieking about the tariffs. On the other hand, the poor and the working class and the middle class benefit from increase in wages, benefit from more job opportunities, and are largely unaffected by lower stock market value because a higher percentage of their assets are tied up in real hard assets like houses and cars. The consumer price increases will hurt the poor and working classes but this may be more than compensated for by more jobs, higher wages, and better job security (things the super rich who own the vast majority of the stock market do not care about).
Then there are, of course, the tremendous social and cultural benefits of having higher wages, more jobs, more industry, more domestic manufacturing, and better job security – especially for young men. The tariffs will likely help with family formation, reduce deaths of despair, reduce drug addiction epidemic, increase marriage rates, reduce unemployment, give working class men more purpose and mission in life, give Americans more stable job opportunities that do not require going hundreds of thousands of dollars into debt by attending college, give young men more paths to stable employment without attending university etc. I realize these are not “GDP number go up” so certain folks ignore these considerations, but they are likely positive and very favorable knock-on effects of the tariffs and more reason why some of the economically illiterate troglodytes like myself support Trump’s tariffs.
errr…the actual libertarians are screaming their heads off about the anti-DEI measures, Bob.
Lmao, I know I’m not exactly toeing the line here anyway, and I’m not exactly popular here, but, you’ve got to understand: most bigotries over the past couple of hundred years are a result of, or have been supported by, the state, whether it be slavery, Jim Crow, homophobia or transphobia, or any other ridiculous notion that has been criminalised. Depending on how old you are, some of these are within your living memory.
I ain’t about to totally and unconditionally support government measures to ameliorate some of the brutal shit they did in the past 40 or 50 years to minorities, by any means, but I’m not about to cry over them either. I’m not old (as such), but I recall when it was illegal to teach that, say, a same sex relationship was okay.
This was a holdover from the slightly older pushing of (very anti-libertarian laws) from previous eras, so I’m not about to get agitated when laws are made to ameliorate that effect. This is basically how it works – the government pushes first order (negative) effects, and then is forced into, bottom up, second order (positive) effects.
We should cheer on (however tentatively) the second order effects – and these are many and varied, but include, for instance, welfare – whilst strongly condemning the first order effects that render the second order effects necessary.
Another, even more fundamental issue is the disaster of US primary and secondary education, with issues around maths and reading. That’s a topic for another day. I haven’t seen much from the Trump administration on this topic.
How can you say that? Trump has done 100% of what the federal government should do — namely getting its nose out of what is an entirely local issue. He has shut down (de facto if not de jure) the Department of Education, something every Republican congress has promised to do since Carter first started that abomination. The federal government should have no role whatsoever in education — and it now largely does not. Moreover he has advocated from his bully pulpit for school choice, which is absolutely the right solution to this problem. In Florida they have almost fully implemented this and Florida now has the best performing schools in the country. He has the head of the school teachers’ union in the United States utterly flabbergasted and defeated. The Trump administration in two months has done more to improve education at the federal level than any Republican administration or congress in the history of the country. And that is only 5% of what he has been working on. And I haven’t even mentioned the tsunami flooding through the tertiary education system. Or what he is doing for girls sports, or a thousand other things. I mean wtf would have thought just six months ago that the NCAA would exclude trans athletes from women’s sports? Not me.
I understand that you are not a fan of Trump on the tariff thing and the Ukraine war thing. Those complaints I certainly understand and am sympathetic to. But I mean credit where credit is due. He is the first “small government republican” to actually have to balls to actually shut down parts of the bloated state since Nixon.
(Regarding Florida, I say “almost fully” because they did not actually shut down the public school system and replace it with a government voucher to pay for schools. But they have taken it as far as is really possible in today’s political environment.)
You Brits might not see it since it is so heavily filtered in the press — I know from what my generally pretty politically engaged family says that Britain is not getting the full story. But what is happening in the USA right now is nothing short of a revolution, and the Redcoats have been left utterly confused and flatfooted.
I have never been a big Trump fan, though I am an Elon fanboy. But what is happening here is utterly jaw dropping.
1). Well, I like you, but that’s not always a great rec here. 😉
2). Have to disagree with you mightily on the DEI thing.
First, what libertarian looks to government to solve long-standing tribal hatred?
Second (and more importantly) – DEI is entirely misguided. You cannot attack this real problem – when you hate a group forever, that group is going to be absent in the wealth and power circles even after the hate subsides – with a top-down approach.
I doubt that you will find any government law, rule, reg, or office attitude that says “don’t hire blacks, gays, muslims, etc.” We are past that. What’s left – and it is real – is the dying attitudes that originally inspired those laws.
And they are dying attitudes, for the most part. What remains is mostly found in old folks – and we’re going to die soon anyway.
And that is how societal attitudes change – by dying off. Not by laws or rules. Pass a law that says “you cannot think badly of purple-haired people”, and a huge part of society will discover their hatred for purple-haired people.
DEI was born out of Obama’s approach to race relations – which he set back decades, IMHO.
I went to law school in the strong throes of Affirmative Action. We had a large contingent of black students in our first year who were admitted specifically because they were black.
Mostly nice, smart, engaged people.
But they lacked so much education – not their fault, but they did – that, by third year, all but two were gone. Couldn’t do the work. Couldn’t write. Couldn’t formulate a decent structured argument.
It wasn’t intelligence or ability – it was foundational education. And it ruined the dreams of quite a few decent people who ended up trashed by it.
We cannot use DEI to hire people who have never had a foundational education that prepares them for higher learning and structure.
We have to start with the basics. Education has to be excellent for all. That has to be the sine qua non of this entire effort. If you don’t have that, you’ll never have true “diversity.”
DEI attacks a symptom, in a way that leaves the underlying disease even worse, because it causes an attitude in society that treats all “non-mainstream” job-holders as objects of charity.
I think I’m the only one here who dislikes you – and that’s mainly because of your COVID horribleness. On the other hand, I am disliked by lots and lots of people here. Have you seen the impressive series of smears I have collected?