“Liberation Day” liberates $ from our wallets

FOTUS calls his ridiculous tariffs announcement “Liberation Day.” He said, “For decades, our country has been looted, pillaged, raped and plundered by nations near and far, both friend and foe alike. But it is not going to happen anymore.” Instead, he said, tariffs would create ‘the golden age of America.'”

Well, no. Is this plan an error of understanding how the imposed tariffs work or an intentional ploy to Make Americans Guaranteed Austere? 

From that “failing” magazine, The Atlantic: “According to [FOTUS], April 2, 2025—the day he unveiled his executive order implementing global tariffs—will be remembered as a turning point in American history. He might be right. Unfortunately, April 2 is more likely to be remembered as a fiasco—alongside October 24, 1929 (the stock-market crash that kicked off the Great Depression), and September 15, 2008 (the collapse of Lehman Brothers)—than as the beginning of a new era of American prosperity.

“The stated rationale behind Trump’s new ‘reciprocal tariffs’ has a more coherent internal logic than Trump’s previous tariff maneuvers. (Stated, as we will see, is the key word.) The idea is that other countries have unfairly advantaged their own industries at the expense of America’s…

Reality

“When the new tariffs come into contact with external reality, they are likely to produce the exact opposite of the intended outcome. Most obviously, the tariffs don’t appear to be based on actual trade barriers, which undermines their entire justification.

“Contrary to White House messaging, the formula for determining the new rates turns out to have been based simply on the dollar value of goods the U.S. imports from a given country relative to how much it exports. The administration took the difference between the two numbers, divided it by each country’s total exports, then divided that total in half, and slapped an import tax on countries at that rate. The theoretically reciprocal tariffs are not, in fact, reciprocal.

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

Voodoo economics

“Krugman said he had no idea where that number had come from, but financial journalist James Surowiecki figured out that the White House ‘just took our trade deficit with [each] country and divided it by the country’s exports to us.’ He called it ‘extraordinary nonsense‘ [and also “malignant stupidity.”]

Washington Post economic writer Catherine Rampell posted that she was reluctant to amplify Surowiecki’s theory that the tariff rates were based on such a ‘dumb calculation,’ but then the Office of the U.S. Trade Representative confirmed it.

“The result is that there is no clear or obvious path that countries could take to get those tariffs removed even if they wanted to. Countries can remove all of their trade restrictions and still run a trade surplus.”

So, it’s not just that tariffs aren’t generally a good idea except in specific situations. The rates of these tariffs are guaranteed to hurt Americans and US trading partners. Is this merely incompetence or planned domestic pain? And if the latter, to what end?

You can tell incompetent people calculated these because the tariffs harshly hit Antarctic Islands inhabited by zero humans but many penguins.

“Disconnected from reality”

Cory Doctorow has some interesting thoughts. He also links to Hamilton Nolan, who notes that the policies  “are not good for business” but will “make America much, much poorer,” even the rich.

“Nolan concludes that Trump is ‘insane’ – that his actions are irrational, disconnected from reality, impossible to understand. For Nolan, the question isn’t ‘What is Trump trying to accomplish?’ It’s ‘how has this insane man managed to gain control of the government of the world’s richest and most powerful nation?’

“He’s got a hell of an answer, too:

That, my friends, is the unfortunate outcome of an economic system that has so profoundly failed to enforce economic equality, and a political system that so profoundly failed to protect its democracy from the influence of capital that it allowed itself to be totally captured by extreme lunatics backed by extreme wealth.

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The Economist magazine says of these tariffs, “They will cause economic havoc and take America’s trade policies back to the 19th century.”  This makes a certain FOTUSian sense in that he seems obsessed with William McKinley, President from 1897 to 1901. But it was a much smaller national and world economy. 

The New York Sun: “After the Republican-controlled Senate voted to revoke President Trump’s tariffs on Canada, House Democrats will soon force their GOP colleagues to go on the record with respect to the new round of tariffs introduced Wednesday. The vote could be detrimental for vulnerable Republican lawmakers next year if the economic uncertainty over the tariffs does not cease.” This IS what the Democrats must do, and often.