4/6/2025 (Sunday) How’s Your IRA? Your 401K? There are so many questions I have about Trump’s infatuation with tariffs I don’t know where to start. He has been promoting them since the 1980’s. Is his unconventional application of them something he learned in business school or is it an original idea he developed? One of Trump’s marketing professors at the Wharton Business School, William Kelley, said he was the dumbest student he ever had. And Trump has threatened to sue any school he attended if they release his academic records. There might be a clue buried under those documents. This is a man who drove six different businesses into bankruptcy after all. He does not seem to be a terribly bright man, but what he does possess are superior marketing skills and in my mind one of the most cunningly manipulative minds to ever evolve.
Trump made a lot of campaign promises that he said he would fulfill on the first day of his presidency. With typical Trump showmanship he signed a flurry of exective orders that at least provided the appearance of his commitment. But most are tied up in 130 different law suits. However, the two big issues that he swore he would take care of on day one, and got him elected, are immigration and the economy. You’ve got to hand it to him on immigration. His team is moving right along there, so much so now even some Trump loyaists are questioning the legality of parts of the maneuvering.
But the economy? He flat out lied during his campaiging when he said he would lower the price of food on day one and he knew it was a lie. He even admitted it after he was elected. Well, ok. Maybe he has never actually understood what groceries are. What Are Groceries Anyway? I have to say I can’t picture him loading up a grocery cart at Hy Vee.
The master mind behind the current tariff debacle is Trump. It’s all on him, and it will be very interesting to see who he tries to blame this time if the stock market keeps tanking. The only economist I have seen supporting Trump’s tariffs is his friend Peter Navarro, recently released from prison after serving time for obstruction of justice. Every other economist I have heard describes his tariffs in general as everything from moronic to catastrophic. Trump calls them reciprocal, but there is nothing to support that assertion. I was curious about tariff rates, obsessed you might say, how he arrived at what seemed to me to be incongruous figures, and did some research, basic I will admit, but my source is the World Trade Organization. It showed the U.S.had a trade-weighted average tariff rate of 2.2 in 2023, 2.7 for the European Union, 1.9 for japan, 3.3 for Canada, and 3 percent for China. Those are averages, and most of what I saw was in that range.
Some poorer countries do have higher rates. India’s trade-weighted tariff rate is 12 percent, Mexico’s is 3.9 percent and Viet Nam’s is 5.1. Of course to protect local interests every country will increase a tariff on specific goods- thus the double digit tariffs that the U.S. and China inflict on each other. But generally average numbers for tariffs are single digits. That’s what’s so flagrantly misleading about Trumps claim that his tariffs are fair and reciprocal and caused such turmoil. The basic “formula” someone came up with in the administration amounts to a ratio of U.S. trade deficit to U.S. imports from a foreign country, divided by two, or 10%, whichever rate is higher. Run those numbers and you get a result that is substantially inequitable according to economists here. Economics negative 101 What’s even more nuts is the 10 percent across the board tariff on any country that the formula does not apply to. Everybody gets a tariff- including uninhabited islands. Well somehow Russia is exempt from the new tariffs, strange in that just a week or so ago he was all set to “put secondary tariffs…on all oil coming out of Russia” when he thought Putin was being uncooperative regarding the Ukranian war negotiations.
Even more mind boggling, Trump has placed tariffs on stuff we don’t make and need to import, like coffee and bananas. The guy just does not understand tariffs. He keeps insisting the exporting country pays the tariff. Another Bamboozle from the Big Bamboozler That is not how it works. The U.S. importer does, and more than likely will pass the extra cost onto the consumer. He does understand that tariffs can be a boon to the economy if they incentivize enough manufactuerers to build in the U;S. instead of a foreign country. That of course means more jobs. But again, he does not appreciate the fact that that will take years, and much of the boost in job production will be negated by automation. It is likely for many businesses that will be the only way they are able to compete with the low wages paid in foreign countries. Basic shit that I guess he can’t comprehend.
Then there is the end game. Trump says his tariffs are going to make us all rich, an economic bounty “the likes of which we have never seen.” He said there will be only “slight discomfort”, and it will happen quickly, a claim the economists I’ve observed refute as nonsense. Even though Trump can’t devine the arrival date for such a blessing, he has to be hoping it will providentially materialize in time to help pay for his massive tax gift to the ultra wealthy.
Hold on though. At other times he maintains his tariffs are a prime negotiating tool, leverage to use against foreign countries to extract a benefit. It’s a version of the modified extortion techniques he uses to intimidate people and institutions to acquiesce to one of his petty demands. Here’s the thing though. It can’t be both. A successful tariff negotiation means you drop the tariff. Good bye luxuriant bounty.
But if the end game is the first- to make us all rich, (reminder- that would not occur from penalties paid by foreign countries but by a massive, gradual and slow rebuild of the county’s manufacturing sector) that could result in a dangerous backfire. That’s because Trump is a pathological narcissist. An exhibiting trait of someone with that disorder is an unability to admit a mistake. With Trump, that means he would not give up on the tariffs no matter how destructive they become, causing a recession or worse.
Meanwhile, while most of America suffers through all this “slight discomfort” our fearless leader is dealing with it all by playing golf, promoting his LIV golf interests and investment, and consulting with podcasters who promote conspiracy theories. Think Tank Chairman
As my wife and I were leaving Omaha’s “Hands Off” protest of Trump Saturday, we ran into a local resident and as we discussed the event she said something that brought to mind a New York Times article by Jamelle Bouie I read a couple weeks ago. What she said was “Trump is screwing all of us and I think that has been his plan all along.” When I arrived home I resurrected that article and am compelled to provide a link. It is a long article, and if you’ve reached this point you probably have had your fill of my griping. If you are pressed for time or to continue reading is a joyless drudgery, I have below an encapsulation of the aritcle’s sentiment.
Lib and MAGA, big and small, D J Trump has f****d us all.
Sorry. I believe I am experiencing residual mind worming from all the Trump protest group chanting. And in case you would rather do anything to keep you from taking a peek at your retirement account, here is the Times link. Trump’s Scattershot Revenge I think it explains a lot.
How this all plays out we will have to just hang on and see. We can hope Republicans will show some courage, take back their rightful constitutional power and slam the brakes on some of these tariffs. But besides the incongruity of penalizing our most important allies and trading partners with his disproportionate tariffs, there are other actions Trump has taken that could have a significant impact on our economy. Trump is killing the country’s defense industry. EU countries are already contemplaing purchasing fighter jets and other military equipment from France and countries in their economic community. They consider the Trumpified U.S. to be an unreliable supplier . They have witnessed many times how Trump extortionist motives can create a climate of uncertainty. Strong U.S. allies Japan and South Korea have formed trading agreements with their historical economic and political adversary China, since they also believe the U.S. is an unreliable trading partner.
It’s a scary time. If you have a moment, contact your political representatives and voice your concerns. Utilize the power you have because Trump is bent on taking it away from us.
“If we’ve been bamboozled long enough, we start to reject any evidence of the bamboozle. We are no longer interested in finding out the truth. The bamboozle has captured us. It’s simply too painful to acknowledge, even to ourselves, that we’ve been taken. Once you give a charlatan power over you, you rarely get it back.” That is one of the saddest lessons of history as related by Carl Sagan. I use the quote a lot.
