How do tariffs work in real time?

[PAL]

Do you have a link for this article? Never mind. Found some.

[Rideback]

Not a single international cargo ship at the Port of Seattle. The port is effectively dead. The last ship from China will dock at a West coast port on the 29th, and the last Chinese ship will dock on the East coast around May 10th. After that, there will be no more shipments arriving from China. We're about to hit a level of scarcity at retailers nationwide that will make covid seem like child's play.
Don't believe me? Just take a ride on the ferry to Seattle and look south. The port is a ghost town.

Tacoma is also a ghost port now. 'Washington is the most trade dependent state..."
from the Port of Tacoma website:
"Washington is the most trade-dependent state in the nation, with 40 percent of jobs related to international trade. The Port of Tacoma is considered one of the region's economic engines.

A study released in 2019 highlighted the economic impact of the Port's real estate and marine cargo operations in 2017:

Supported more than 42,100 jobs
Generated nearly $3 billion in labor income
Produced more than $100 million annually in state and local taxes to support education, police, fire services and road improvements
Supporting 42,100 jobs
The analysis focused on direct, indirect and induced jobs:

14,450 direct jobs include trucking companies and railroads moving cargo to and from terminals and warehouses, longshore workers, steamship agents and freight forwarders.
27,650 indirect and Induced jobs include office supply firms, maintenance and repair firms, and parts and equipment suppliers. This number also includes jobs created by people directly employed by marine cargo operations re-spending their wages in the community on housing, food and other consumer goods.
If the farmers and manufacturers who ship products through the Port of Tacoma were factored in, the port’s activities reached 267,000 jobs overall" in Washington.

[Rideback]

The perspicacity of David Frum's writing is unparalleled, as is his history. A Canadian who became a speechwriter for George W. Bush and is now one of the most astute and historically informed commentators on United States politics and economics. This piece on stagflation is essential reading. Here are the last several paragraphs.
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'In January, President Trump inherited an economy that was growing strongly. Unemployment was low. Inflation had been restrained below 3 percent. If the new Trump administration had just left well enough alone, his second presidency could have coasted to economic success.
Instead, Trump single-handedly plunged the economy into chaos. In the ’70s, the economy was disrupted because the price of oil surged, a result of the major oil producers’ coordinated restriction of supply. Trump’s tariffs are like a hundred self-inflicted oil shocks, all arriving at the same time. Unless Trump changes course immediately, everything will soon cost more, possibly a lot more: groceries and automobiles, industrial magnets and tableware, mobile phones and children’s shoes.
Trump and his surrogates promise that from this upheaval will emerge a new era of American industry. Tariffs on foreign products will induce investors to build factories in America. Even if this promise came true, the result would still be a bad bargain. Tariff-sheltered industries tend to produce inferior goods at higher prices, and have little incentive to do otherwise. If the goods were competitive, after all, no tariff would be needed or wanted.
But Trump’s tariffs will not induce much factory-building. Who’d invest in a factory to produce made-in-America goods at higher-in-America prices unless assured that foreign competition would be excluded for a long time, if not forever? Trump’s tariffs are here today, gone tomorrow, maybe back the day after that, maybe not. On some days, Trump vows to keep his tariffs in place permanently; on others, he speculates about trading them away for hypothetical future deals. Disadvantages and uncertainties compound: The tariff-protected American car of the future Trump fancies, for instance, will be assembled from steel, glass, plastic, fabric, and electronics, all of them tariffed too: at 10 or 20 or 125 percent, or whatever other random number pops up on Trump’s Truth Social feed that morning.
No American business—no business that serves the American market—will commit to any capital expenditure under these conditions. If Trump’s tariffs last for any length of time, the result will be a vast disinvestment instead. The worst of the pain may not be felt immediately. Trump advertised the tariffs many weeks in advance, opening an opportunity for businesses to stockpile inventories. Sooner or later, however, those stockpiles will dwindle. Consumers will face higher prices or outright shortages. Businesses will suffer diminished demand. Workers will be laid off.
The only early hope is that the president who set the maelstrom going will panic and try to stop the wreckage. But he seems just as likely, perhaps more so, to make that damage worse. The presidents of the ’70s desperately gambled with extreme measures of state control to stop inflation without aggravating unemployment. Nixon imposed wage and price freezes in 1971 and ’73; in 1977, Carter proposed an elaborate scheme of controls, taxes, and subsidies across the energy sector. These experiments sometimes delivered a short bump in the polls—but quickly presented their authors with a dilemma: State control begets economic distortions, which demand more state control. Either the would-be controller advances toward ever greater political command of the economy—or the would-be controller is quickly forced to retreat in failure and embarrassment.
Donald Trump has no grasp of history. The people around him are afraid to teach it to him. So Trump’s trade war could well lead him, as the economy sinks, to ever more interventionism of his own: subsidies and tariff exemptions for favored companies; payouts to farmers and other constituencies; political warfare against the independence of the Federal Reserve.
The most dangerous temptation that Trump may face is to impose some form of capital controls to stop investors from dumping dollar assets. Trump’s trade war has driven a sell-off of U.S. Treasury bonds, which raised interest rates in the United States. Regimes moving toward protectionism sometimes try to block investors from rushing to the exits. The United States has more capacity than most to try such measures. Among their many costs, they dissuade investors from ever trusting your country again.
The grim fact about stagflation is that—once stumbled into—it is very hard to escape. Raise interest rates to curb the inflation, and the stagnation gets worse. Rev the economy to overcome stagnation, and the inflation gets worse. Policy makers find themselves in the predicament of a motorist trying to execute a three-point turn in a too-narrow roadway: They can never back up or advance far enough to make any progress.
The whole incomprehensible system that Trump is building—haphazard, anti-market, punishing to consumers and businesses alike—will have to be rewritten by the next president, or maybe junked by the next Congress if it has the votes to override Trump’s veto and reclaim the legislature’s constitutional power over tariffs and trade.
But whenever the government gets serious about repair and recovery, Americans will face more difficulties emerging from their tariff-caused stagflation than their oil-shocked predecessors did half a century ago. Impose a tariff on bananas: The price will rise; demand will drop. As the drop in demand is felt, investment will decline in the boats and warehouses that bring the bananas to market. Fewer banana trees will be planted; the people who work on banana plantations will find other jobs; the capital committed to banana production will be redeployed.
Lift the tariff on bananas, and the process will not immediately reverse. The memory of the arbitrary tariff will shape behavior for some time afterward. Recommitting the capital, rehiring workers, replanting trees, reinvesting in warehouses and boats—none of that will be instant. Banana prices may remain elevated in the tariff-imposing country for some while after it mends its ways. And as it goes with individual commodities, so it goes with the entire global system of production and trade.
The economic crisis of 2025 started in the mind of one man, but Trump’s tariffs are dislocating planet-wide networks of trade. The dislocation has already sliced trillions of dollars from the value of U.S. corporations. Even if Trump ceased his trade actions tomorrow, the possibility that he could resume them would depress the value of almost every U.S. and international company.
Foreign governments, faced with Trump’s bullying, have retaliated in ways that dislocate trade further. They may or may not end their retaliation when Trump has had enough. By then, many of them will have formed new trading arrangements that bypass the United States.
Trump will demand cheaper money from the Federal Reserve. He has already threatened to fire the Fed chairman, Jerome Powell, for recently declining to lower interest rates. Potential politicization of the Fed will frighten bondholders and push interest rates up—depressing the value of stocks, discouraging new investment, and raising the cost of mortgages, auto loans, and student debt.
Ultimately, the end of the crisis will depend on the actions of hundreds of millions of people across dozens of trading nations. Only if and when they recover their trust in the United States will the U.S. and world economies fully recover from the breach of trust Trump has created. How long will it take? No one knows.
As a businessman, Trump was notorious for operating in bad faith. He has been accused of deceiving customers, employees, investors, and creditors. Before he pivoted to politics, his bank of choice was one known for its relationship with Russian oligarchs and alleged money launderers. He repeatedly drove his properties into bankruptcy, leaving creditors, investors, and employees to bear the costs of his failure.
As a politician, Trump vowed to “make America great again” with the same predatory methods he used in business. He does not appear to believe in mutually beneficial transactions. The only way he feels confident that he prevailed is if the other party suffers. His plan for enriching America was predicated on dominating and wronging others. Plans like that seldom work even at the start, and never work for long.
Good faith is the beginning of success for nations as well as individuals. Trump’s bad faith and poor choices once ruined only those who made the voluntary personal or corporate decision to do business with him. But no one can choose to sit out Trump’s trade war. The casualties are already accumulating.'
https://www.theatlantic.com/.../trump-e ... ../682572/

[just-jim]

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[mister_coffee]

How tariffs work in real time:

When really bad news about inflation and unemployment and GDP growth hit those numbers aren't likely to start getting better for him.

And this one isn't directly about the tariffs but also describes the pit they have dug for themselves:

[mister_coffee]

One thing I find both scary and kind of humorous is there are two unexpected victims of the Trump Trade War. One is the US domestic oil industry, and the other is Russia. Both are taking a terrible beating because oil prices are down, largely because everyone now expects a horrible global recession.

For the US domestic oil industry, this probably puts a stop to any possible expansion of production or oil exploration for at least a couple of years.

For Russia, this is probably existential. And it could well force a Russian capitulation in its war of aggression against Ukraine. And probably cause Russia to collapse. So there is a good possibility China will be picking up some real estate to its north.

This is humorous because it shows what a bunch of complete boneheads are in charge at this moment. It is also scary because it leaves me convinced that there are no competent people in charge or even in the same room.

[PAL]

Maybe Elon could be the next Albert Speer and carry it through, something Speer did not do.

[Rideback]

Kimbal Musk is getting nervous. His tweet

"Foreigners are selling US Treasuries. The trade war must end. Soon. The Yen, Euro & Canadian $ are going higher. This is not the goal. We have a massive deficit and higher interest rates means higher debt payments. We are refinancing our debt in April and May and we want our interest rates down"

[Rideback]

Canada's powerful response

https://deanblundell.substack.com/p/an- ... irect=true

[just-jim]

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[Rideback]

Even the strongest Trump supporters were out over the weekend begging Trump to knock it off. It'll be interesting to see if Rep Bacon's Bill makes it to the floor for a vote that will rescind Trump's emergency authority. Meanwhile, we'll see if the Dow hits a pause on trading as the Japanese market did because of the plummet.

Bill Ackerman is no wallflower
https://www.mediaite.com/news/billionai ... clear-war/

And then there's the revelation that the whole tariff scheme was concocted with a fake memo written by a fake person produced by felon Peter Navarro
https://crooksandliars.com/2025/04/legend-ron-vara

[Rideback]

"Jeffrey Sachs on Trump's economic policy:
"Tariffs are going to lower living standards.
They're going to wreck the US economy, and they're being put on for unbelievably bizarre and mistaken reasons that are completely fallacious.
Let me explain.
The United States runs a large deficit in its trade in goods and services — what's called the current account of the United States — and that deficit is about a trillion dollars.
Trump says, 'Oh, that's because other countries are ripping off the United States.'
I can't even begin to say how absurd that line is.
[The word is childish.]
Running a current account deficit means — and it means precisely — that the United States is spending more than it's producing. That's what leads to a deficit. You spend more than you produce.
And we spend more than we produce because we have very low saving in this country. We have an enormous budget deficit.
So the government is like the national credit card — it runs on credit.
It transfers money, pays for wars, pays for Israel’s wars, pays for military bases in 80 countries around the world, pays for that more than a trillion-dollar-a-year military establishment, and hundreds of billions more of associated spending on the military-industrial complex.
And it gives tax cuts for the richest Americans.
It allows for tax evasion by the richest Americans — and I mean evasion, because it doesn't do audits, and it guts enforcement of the tax laws.
So we hemorrhage deficits and have rising public debt.
And because of all that, the spending of our country is much larger than our national income.
It’s a trillion dollars more than national income.
It is exactly the imbalance of our imports of goods and services over our exports of goods and services.
All of this is to say that what Trump calls a 'ripoff' is just the absolute irresponsibility of the political class in Washington.
It's a corrupt, plutocratic gangsterism that gives away the taxes and tax cuts to the richest people and goes on war after war — on credit.
And that leads to these large deficits that Trump then blames on other countries.
Now he's going to correct these deficits, he thinks, by raising tariffs.
And of course, it's going to do nothing of the kind.
The deficits are going to continue because they come from the profligacy of Washington.
They don't come from the fact that other countries are ripping us off.
So he'll raise the tariffs. Americans will shift their spending, say, from an imported automobile to domestic automobiles. That's true. They'll pay higher prices for those domestic automobiles. And our auto industry will export less abroad.
So yes — there will be fewer imports and fewer exports, and the balance won’t budge.
And none of it's going to change the fiscal recklessness.
Because what's Trump’s highest aspiration? It is to continue tax cuts for the richest Americans, which is going to cost another $4 trillion over the next 10 years in the budget.
Because these tax cuts are supposed to end, but he says, 'No, no, no — these are taxes for my rich donors, so they're going to continue.'
So he's not going to solve the budget crisis.
He's not going to solve the trade deficit — because that comes from the budget crisis.
But what he's going to do is lower the living standards of our country and the world.
Because trade is beneficial in living standards — it's called gains from trade.
We buy more cheaply. We sell goods that we have a comparative advantage in. And both sides gain from trade.
Of course, we overdo it, because we overspend — but that’s a completely different thing.
No one’s ripping off the United States by these numbers.
I don’t know whether it's just rhetoric or ignorance or confusion, but it's unbelievably bad economic policy.
It will come to no good.
And incidentally, you mentioned rightly that tariffs are, of course, a tax. So who’s supposed to have authority over taxes?
[Congress.]
And Congress has nothing to say in this. This is a one-person show.
What did we become in this country? Even King George wouldn't levy taxes without the British Parliament in the 18th century.
So what happened to this country? Trump just says, 'Oh, it's an emergency,' and now we have one-person rule — and one-person rule on completely fallacious premises that don’t pass the first day of study of what a trade deficit is.
I taught that for more than 20 years at Harvard University — what is a trade deficit, how does it relate to the excess of spending over production, how does it relate to the excess of investment in a country over a low saving rate?
Well, none of this seems to register.
No one asks a question.
There isn’t a day of hearings.
There isn’t any analysis.
It’s a one-person show based on economic fallacies that are going to wreck our economy, wreck the world trading system.
And I can tell you — all over the world, because I am talking with leaders all over the world, and recently in Asia — the words to describe this, you can’t say in polite company."
From https://x.com/nxt888/status/1907679118449418269...

[THL]

When a felon is elected with a terrible business record, expect a circus. His cabinet is a reality TV show, featuring morons and clowns: lying, petty and vindictive. Generations will not suffice to build back credibility, if at all.

[Rideback]

The Atlantic: There's only one way to understand by Derek Thompson
"Yesterday afternoon, Donald Trump celebrated America’s so-called Liberation Day by announcing a slew of tariffs on dozens of countries. His plan, if fully implemented, will return the United States to the highest tariff duty as a share of the economy since the late 1800s, before the invention of the automobile, aspirin, and the incandescent light bulb. Michael Cembalest, the widely read analyst at JP Morgan Wealth Management, wrote that the White House announcement “borders on twilight zone territory.”

The most fitting analysis for this moment, however, does not come from an economist or a financial researcher. It comes from the screenwriter William Goldman, who pithily captured his industry’s lack of foresight with one of the most famous aphorisms in Hollywood history: “Nobody knows anything.”

You’re not going to find a better three-word summary of the Trump tariffs than that. If there’s anything worse than an economic plan that attempts to revive the 19th-century protectionist U.S. economy, it’s the fact that the people responsible for explaining and implementing it don’t seem to have any idea what they’re doing, or why.

Rogé Karma: Trump’s tariffs are designed to backfire

On one side, you have the longtime Trump aide Peter Navarro, who has said that Trump’s tariffs will raise $6 trillion over the next decade, making it the largest tax increase in American history. On another, you have pro-Trump tech folks, such as Palmer Luckey, who have instead claimed that the goal is the opposite: a world of fully free trade, as countries remove their existing trade barriers in the face of the new penalties. On yet another track, there is Stephen Miran, the chair of the Council of Economic Advisers, who has suggested that the tariff salvo is part of a master plan to rebalance America’s relationship with the global economy by reducing the value of the dollar and reviving manufacturing employment in the United States.

These three alleged goals—raising revenue, restoring free trade, and rejiggering the global economy—are incompatible with one another. The first and second explanations are mutually exclusive: The state can’t raise tax revenue in the long run with a levy that is designed to disappear. The second and third explanations are mutually exclusive too: You can’t reindustrialize by doubling down on the global-trade free-for-all that supposedly immiserated the Rust Belt in the first place. Either global free trade is an economic Valhalla worth fighting for, or it’s the cursed political order that we’re trying desperately to destroy.

As for Trump’s alleged devotion to bringing back manufacturing jobs, the administration has attacked the implementation of the CHIPS bill, which invested in the very same high-tech semiconductors that a strategic reindustrialization effort would seek to prioritize. There is no single coherent explanation for the tariffs, only competing hypotheses that violate one another’s internal logic because, when it comes to explaining this economic policy, nobody knows anything.

Recommended Reading
An unhappy person reaches the top of a palm tree and plucks a smiley-face coconut.
Why Success Can Feel So Bitter
Arthur C. Brooks

A reflection of a crane constructing new buildings
America Needs More Luxury Housing, Not Less
M. Nolan Gray


Abolish the Priesthood
James Carroll

One might expect clarity from Treasury Secretary Scott Bessent. But even he doesn’t seem to understand what’s going on. The “tariff gun will always be loaded and on the table, but rarely discharged,” he said last year. So much for that. Yesterday, a Bloomberg reporter asked Bessent if the Trump administration has plans to negotiate with America’s trading partners. “We’re just going to have to wait and see,” he said. Was the administration ready to negotiate with the European Union, China, or India? “We’ll see.” Asked why Canada and Mexico were missing from the president’s list of tariffs, he switched it up: “I’m not sure.” Nobody knows anything.

By the numbers, the tariffs are less an expression of economic theory and more a Dadaist art piece about the meaninglessness of expertise. The Trump administration slapped 10 percent tariffs on Heard Island and McDonalds Islands, which are uninhabited, and on the British Indian Ocean Territory, whose residents are mostly American and British military service members. One of the highest tariff rates, 50 percent, was imposed on the African nation of Lesotho, whose average citizen earns less than $5 a day. Why? Because the administration’s formula for supposedly “reciprocal” tariff rates apparently has nothing to do with tariffs. The Trump team seems to have calculated each penalty by dividing the U.S. trade deficit with a given country by how much the U.S. imports from it and then doing a rough adjustment. Because Lesotho’s citizens are too poor to afford most U.S. exports, while the U.S. imports $237 million in diamonds and other goods from the small landlocked nation, we have reserved close to our highest-possible tariff rate for one of the world’s poorest countries. The notion that taxing Lesotho gemstones is necessary for the U.S. to add steel jobs in Ohio is so absurd that I briefly lost consciousness in the middle of writing this sentence.

Read: The good news about Trump’s tariffs

If the tariffs violate their own internal logic and basic common sense, what are they? Most likely, they represent little more than the all-of-government metastasis of Trump’s personality, which sees grandiosity as a strategy to pull counterparties to the negotiating table and strike deals that benefit Trump’s ego or wallet. This personality style is clear, and it has been clearly stated, even if its application to geopolitics is confounding to observe. “My style of deal-making is pretty simple and straightforward,” Trump writes in The Art of the Deal. “I aim very high, and then I just keep pushing and pushing and pushing to get what I’m after. Sometimes I settle for less than I sought but in most cases I still end up with what I want.”

One can see this playbook—threat, leverage, concession, repeat—playing out across all of society. It’s happening in trade. It’s happening in law. It’s happening in academia. In the first two months of his second term, Trump has already squeezed enormous concessions out of white-shoe law firms and major universities. Trump appears to care more about the process of gaining leverage over others—including other countries—than he does about any particular effective tariff rate. The endgame here is that there is no endgame, only the infinite game of power and leverage.

Trump’s defenders praise the president for using chaos to shake up broken systems. But they fail to see the downside of uncertainty. Is a textile company really supposed to open a U.S. factory when our trade policy seems likely to change every month as Trump personally negotiates with the entire planet? Are manufacturing firms really supposed to invest in expensive factory expansions when the Liberation Day tariffs caused a global sell-off that signals an international downturn? Trump’s personality is, and has always been, zero-sum and urgent, craving chaos, but economic growth is positive-sum and long-term-oriented, craving certainty for its largest investments. The scariest thing about the Trump tariffs isn’t the numbers, but the underlying message. We’re all living inside the president’s head, and nobody knows anything."

[Rideback]

The Economist. Author Douglas Irwin (Trade historian)
"ON “LIBERATION DAY” President Donald Trump upended more than half a century of American trade policy by imposing sweeping tariffs on imports. These are off-the-charts in their historic significance. From just 2.3% in 2024, the average American tariff on imports is now expected to rise immediately to about 30%—where it was in the late 1800s. Mr Trump is a 20th-century man presiding over a 21st-century economy who wants to take it back to the 19th century.

Not only is the magnitude of the hike unprecedented, but the tariffs will have a much more pervasive effect on the American economy than previous episodes. That is in large part because today merchandise imports are around 11% of GDP, more than twice their level in the late 19th century.

The tariffs blow an enormous hole in the liberal trade order that America has led and fostered since the second world war. They undermine every free-trade agreement America has ever signed. Those agreements were reciprocal: each country set zero tariffs on bilateral trade. Past free-trade-agreement partners now face stiff tariffs on their exports to America, among them South Korea (26%), Israel (17%) and Australia (10%). Canada and Mexico escaped this round of tariffs but still face the threat of 25% duties on their goods. If Mr Trump is willing to rip up his own agreement—known as the USMCA—with those two neighbours, then all past agreements are null and void, and future ones are of limited value. No one can sign any such deal with confidence if tariffs can be imposed on a whim.

Is there a principle behind the astonishing array of duties imposed on April 2nd? Mr Trump’s obsession with tariffs has long been known, but he offered a kaleidoscope of ever-changing rationales for them. They would raise revenue, reshore jobs, reduce trade deficits, ensure reciprocity by providing bargaining leverage, and so on. Economists took glee in pointing out the contradictions.

The president now touts his tariffs as mainly “reciprocal”: “whatever they charge us, we charge them.” This makes them sound fair. Far from it. The calculated tariffs did not measure tariffs or non-tariff barriers facing American exporters. They were, instead, based on the bilateral trade balance with each country—merchandise only, excluding services, in which America tends to run a surplus. According to the US Trade Representative’s office, the calculation of the tariffs “assumes that persistent trade deficits are due to a combination of tariff and non-tariff factors that prevent trade from balancing”. The implicit goal here is balanced trade on a bilateral basis.

This is bonkers, akin to an individual trying to have balanced trade with the local grocery store (with which she runs a large trade deficit) as well as with her employer (with which she runs a large trade surplus). There may be reasons to seek overall trade balance, but there is no rationale for balancing trade on a bilateral basis.

And seeking to balance overall trade through bilateral measures misses the macroeconomic nature of that imbalance, including the role of America’s large fiscal deficit in driving the flow of capital to the country. Of course, the trade deficit may narrow if America slips into a recession—hardly the outcome anyone hopes for.

Will this ignite a global trade war that sends trade volumes spiralling downwards, like the 1930s? That depends on the foreign reaction. The higher tariffs could spark retaliation. The EU is already prepared with “counter-measures”. A more optimistic view is that Mr Trump’s move may trigger a wave of foreign envoys descending on Washington in the hope of reaching deals that would satisfy the president and allow the tariffs to be removed. He loves to bargain and may yet be flattered into easing the tariffs.

Perhaps the most shocking aspect of this week’s events is the ability of one person to completely remake American trade policy. All previous major changes have involved building large coalitions and developing a social consensus over time— both of which required majority support in both houses of Congress.

But now Congress has delegated so much tariff-making authority to the president that it is, in effect, sidelined during this fundamental shift in trade policy. Mr Trump feels empowered to act unilaterally because he is. That may be acceptable under normal presidents, but this is not a normal presidency. A situation in which the occupant of the White House can make such momentous changes on his own, unchecked, reflects serious political decay in American politics.

What makes this all the worse is that the political constituency for the new tariffs is extremely small. Indeed, there is no consensus in Congress that such draconian steps are warranted; nor is there a general view among the American public that trade is a big problem. Mr Trump inherited an economy in decent shape. Congress was happy with the status quo and the public put trade far down its list of priorities, well below inflation, health care and the cost of living.

In other words, no one was asking for any of this. In fact, a Gallup poll released last month found that 81% of Americans surveyed believe trade is an opportunity for growth—the highest level since the poll began in 1992—and only 14% view trade as an economic threat.

The tariffs cast a dark cloud over the global economic outlook. But the damage they will do to America goes far beyond the national accounts. As Richard Cooper, an economist who served in the Carter and Clinton administrations, pointed out long ago, “trade policy is foreign policy.” These tariffs—on friend and foe alike, as Mr Trump likes to say—are almost certain to push friends away. It isn’t easy to have good diplomatic relations with a rogue power that flippantly and capriciously blocks trade. Co-operation with allies on all manner of issues, from security to public health, is likely to suffer. Mark Carney, Canada’s prime minister, was not being loose with his words when he said recently that the long-standing co-operative US-Canadian relationship is “over”. Europeans are thinking the same thing. And trust, once lost, is hard to rebuild.

Mr Trump has done a lot of damage—to America and the world. The president was right in at least one of his Rose Garden statements. With tariffs, he said, “we can be so much wealthier than any country, it’s not even believable.” He got that last bit right. ■

Douglas Irwin is the John French Professor of Economics at Dartmouth College.

[Rideback]

Alt NPS:

"We know this post is long, but it’s important to read to understand what’s going on. A lot of people are asking, “Why is Trump just out golfing while things are falling apart?” It’s simple: the emergency isn’t something he’s reacting to — it’s something he’s building.
Trump recently declared a national economic emergency under the International Emergency Economic Powers Act (IEEPA) — granting himself sweeping authority over international trade by labeling foreign economic practices an “unusual and extraordinary threat.”
But here’s the real play: by declaring a national emergency, Trump didn’t just respond to a crisis — he created one. And in doing so, he unlocked access to over 120 statutory powers scattered throughout federal law. Many of these powers have nothing to do with trade — and everything to do with expanding presidential authority inside the U.S.
What This Move Enables: Expanded Domestic Powers
1. Control of Domestic Communications
- 47 U.S.C. §606(c): Allows the president to take control of, shut down, or regulate wire and radio communications — including the internet, social media platforms, broadcast networks, and telecom infrastructure — in the name of national defense. Originally intended for wartime, this Cold War-era law remains on the books.
2. Asset Freezing and Financial Surveillance
- Under IEEPA and related laws, the president can freeze the assets and bank accounts of individuals or organizations accused of aiding foreign threats. These powers are vague and can be stretched to include domestic political groups, journalists, or activists — especially if they’re perceived as having foreign ties or influence.
3. Domestic Military Deployment
- Under the Insurrection Act (10 U.S.C. §§ 251–255), the president can deploy active-duty U.S. military to enforce laws or suppress civil unrest within the country. In certain scenarios, this can be done without state governor consent — especially if the president claims state authorities are failing to uphold federal law.
4. Emergency Detention Powers (Non-Citizens)
- The Alien Enemies Act (50 U.S.C. §21) — a law dating back to 1798 — allows the president to detain or restrict the movement of non-citizens from nations deemed hostile. The criteria for “hostile” can be broad and undefined during a declared emergency.
5. Control of Energy and Transportation
- Under laws like 42 U.S.C. §6272 and others, the president can redirect or restrict domestic fuel production, electricity usage, or energy transportation. Additionally, 49 U.S.C. §40106(b) allows the president to limit, reroute, or suspend civil aviation, giving the executive branch near-total control over U.S. airspace in a crisis.
6. Suspension of Labor Regulations
- During a declared emergency, the president can waive federal labor regulations and override contract protections. This includes removing limits on hours, wages, and workplace safety for federal contractors and any industries deemed vital to national security.
7. National Security Letters & Warrantless Surveillance
- Emergency declarations expand the reach and use of National Security Letters (NSLs) — tools that let federal agencies demand financial, telecom, and internet records without a warrant. These also come with gag orders, preventing the recipient (e.g., Google or a bank) from disclosing that they’re under surveillance.
Why it Matters?
Even when legal domestic powers are limited, a national emergency lets the president:
- Frame the issue as a national security crisis, justifying aggressive action
- Bypass Congress and the courts by acting unilaterally
- Sway public opinion using fear, urgency, and patriotic rhetoric
Bottom Line
IEEPA is focused on foreign threats — but once the emergency is declared, the president taps into a hidden arsenal of domestic control powers. What began as a trade issue could quickly shift into civil liberties restrictions, mass surveillance, or even crackdowns under the legal shield of an “emergency.”
This isn’t just about tariffs. It’s about redefining the boundaries of executive power. Imagine if this economic crisis keeps getting worse — the amount of power he will gain."

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The Economist:
"< IF YOU failed to spot America being “looted, pillaged, raped and plundered by nations near and far” or it being cruelly denied a “turn to prosper”, then congratulations: you have a firmer grip on reality than the president of the United States. It’s hard to know which is more unsettling: that the leader of the free world could spout complete drivel about its most successful and admired economy. Or the fact that on April 2nd, spurred on by his delusions, Donald Trump announced the biggest break in America’s trade policy in over a century—and committed the most profound, harmful and unnecessary economic error in the modern era. "

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Reps in Congress are warming up to the idea of taking back the power of the purse. First the Senate voted to and now Republican Congressman Bacon is set to introduce a companion Bill
https://www.politico.com/live-updates/2 ... l-00273307

[mister_coffee]

Here ya go. How tariffs work in real time:

Showing a 70 percent drop from last year on air travel bookings from Canada to the USA.

[just-jim]

.
On the program ‘Wall Street Week’ on PBS tonite - a program I dont usually follow - there was this interview with Lawrence Summers. He was the Secretary of Treasury under Clinton, and headed the National Economic Council under Obama. He was a Harvard Professor of Economics and later served as President of Harvard.

https://www.bloomberg.com/news/videos/2 ... treet-week

This link is the whole show. After a brief intro in the show - the interview with Summers starts, running about 10 minutes.

It is an EXCELLENT discussion of the effects of tariffs!
He discusses business and economic certainty, predictability, contracts, the rule of law and what it means to businesses and investors.

He thinks we have a 50% chance of a recession in the next year.
.

[just-jim]

.
On PBS Newshour tonite, regular Friday analyst NYTimes columnist David Brooks - not exactly a raging leftie - called FELON donnie’s tariff’s; “the single worst domestic policy announced in my lifetime”. He went on to say it will certainly backfire on the rebops and give the Dems a huge uptick in support.
.

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Goes without saying that the 11 US companies that China is saying will be put under investigation for corrupt practices are reaching out to Trump and their representatives quite loudly as I type. Not hard to think there's some good guys, like Costco as well as bad guys in that list like Tesla.

[mister_coffee]

WSJ posting that the billionaire class lost $208 billion in today's crash.

Except for those who sucked up to the Orange Criminal and had inside information on what was going down.

I'm hearing that a lot of wealthy people who donate to political campaigns are pretty angry, and with good reason. They are calling their congresspeople and senators as well. Don't you think it pretty likely that elected officials will pay some attention to prominent donors?

It will be kind of interesting to see how it plays out. It would be more entertaining if we could watch from a safe distance.

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China imposes 34% tariff on all US goods. This is just the beginning

https://www.cnn.com/2025/04/04/business ... 3763057734

[Rideback]

WSJ posting that the billionaire class lost $208 billion in today's crash.