This is the first reasonable explanation I’ve read for something that appears utterly incomprehensible. It’s very hard, though, and I’m writing from Italy, a country with its fair share of bad government over the years, rally hard for me to understand how the mighty USA can be totally hijacked by a single, insane person, with no checks, no balances in sight. It makes me sad.
You can imagine how sad we feel. The people behind this have been planning it for many years, eliminating civics classes in many states. We are in constant horror.
The US has been inundated with right wing propaganda for decades with very weak pushback from the mainstream media. I have family members who still believe the insane slander spread by Rush Limbaugh, many Republicans and later Fox News that the Clintons killed their close friend Vince Foster.
Asterisk on the point that Canada's exports are 80% to US, making them highly vulnerable to Trump. Isn't much of that oil and other raw materials, for which US has few low-cost alternatives? And much of the rest cross-border-integrated auto manufacturing? Doesn't that affect the power balance?
Take away the oil imported at a discount price an the trade deficit pratically disappears! And it's not the kind you get when you drill baby drill in the states, so good luck buying it from Venezuela instead! Of course, you could also mention Potash, and replace that source by... Russia! Gee... this IS getting fun.
It’s kingly, yes, but in a way that demonstrates profound paranoia and megalomaniacal delusions of grandeur. Trump has no interest in the nitty-gritty of helping make the economy better or reindustrialization, so he’s just doing a hand-wavy, paper-signing gesture in the senility-addled hope that it’ll Make America Great Again. Unfortunately we all have to suffer for it.
37% tariff on Bangladesh. For the sin of selling us inexpensive clothes. And those who earn $7.75 an hour in America need to shop at Walmart and Target. So now we will onshore the garment industry? What will they be paid? Sweatshops? Child labor?
This group of business leaders in the WH are moronic. It is like they look at import FRED charts and go “trade deficit” and it’s the end of the conversation.
It was A.N. Whitehead, I believe, who proclaimed (distilled and paraphrased) one great advance of modernity being proof of the wisdom of persuasion over coercion.
Norman Angell argued similarly.
The post WW2 order made it blindingly obvious - persuade, don't coerce.
Our Trump is no King Canute who was an actual King aware of his limitations.
No. Our Trump is going to try to prove himself smarter than all with his coercive trade wars. He will order the tides of economic theory to reverse.
Heck, he might even have the PPT intervene to "prove" the market sees things his way.
If so, he will learn a very nasty lesson, at OUR expense.
I wonder how much of the executive action he's doing has to do the fact that he really is a very poor negotiator (people with big egos and thin skins often are), which means he can't get anything enacted the legal way, ie, through Congress. A bully and a negotiator are not the same thing! This is compounded by the fact that the GOP margin in the House is tiny and the Senate filibuster would stand in the way of much of this.
But,but,.. Jared…the nyt reported today that Big Brains in DC simulated the global trade war and concluded it will al be alright by tomorrow afternoon. They must be right, right?
I read that too. I guess some folks have extra time on their hands.
To be more respectful, it is true that when you’re operating under highly uncertain conditions, outcomes can bounce in surprising ways. So, no one should claim to know how this turns out. But given the quality of the inputs, the outputs do not look good.
If companies can fully pass on the cost of tariffs to US consumers, then why do they mostly oppose them? Why do so many economists assume that profit margins are tariff-inelastic? Trump’s tariffs, esp those on USMCA partners , may be stupid, but tariffs are not intrinsically so. And what’s with progressives whining about inflation, which helps debtors (most Americans) and hurts creditors (mostly the richest)?
1. Because if the price of (e.g.) the car you're selling has to rise by several thousand bucks to cover the cost of the tariff, customers will buy fewer. If you sell fewer cars, the economics of your business, with a lot of fixed costs, goes to hell.
2. Because if you have no idea whether your supply chain is going to be viable under this on-again off-again trade war, you can't make any business decisions.
As to cheer-leading for price inflation, what rock have you been under since 2021? Unless workers have the power to grab higher wage increases than the price increases, tariffs are a direct hit to the 99%'s standard of living. And unlike 2021 and 2022, the job market is softening, so worker bargaining power is weak.
More group-think. Precisely because higher prices will reduce the number sold, they’ll eat some of the tariff. As for the distributional effects of inflation, they’re regressive for food and energy, but slightly progressive beyond those. One big reason: 1/3 of the non-rich get Social Security, which is indexed to inflation. And, of course, the way the Fed fights inflation is highly regressive … and disemploying. Your apparent Rx - inflation bad, tariffs bad - syncs nicely with that of mainstream business. Sorry.
You're right, tariffs aren't fully passed to the consumer, but it triggers a lot of price changes, and that's when the tarrifs aren't reciprocated and changing daily. If a widget imported from Canada cost the retailer 120$ instead of 100$, the one from Deepsouth inc., of a lesser quality, priced at 99$ will suddently jump at 119$. The supplier, who absorbed a 5$ loss, will look at other buyers. It may take some time, but his price will go up by 5$ for his old client, the same to his new client. The Deepsouth inc. will happelly increase his to 124$!
So wish Trump would listen to you, or ANYONE rational. I don't think he nor any of his "advisors" has read historically what tends to happen as a result of trade wars--each country retreats behind its own walls, tensions between countries build, and then--ACTUAL WAR.
The last time we tried this was 1930. Guess what happened soon thereafter?
This is the first reasonable explanation I’ve read for something that appears utterly incomprehensible. It’s very hard, though, and I’m writing from Italy, a country with its fair share of bad government over the years, rally hard for me to understand how the mighty USA can be totally hijacked by a single, insane person, with no checks, no balances in sight. It makes me sad.
You can imagine how sad we feel. The people behind this have been planning it for many years, eliminating civics classes in many states. We are in constant horror.
The US has been inundated with right wing propaganda for decades with very weak pushback from the mainstream media. I have family members who still believe the insane slander spread by Rush Limbaugh, many Republicans and later Fox News that the Clintons killed their close friend Vince Foster.
Asterisk on the point that Canada's exports are 80% to US, making them highly vulnerable to Trump. Isn't much of that oil and other raw materials, for which US has few low-cost alternatives? And much of the rest cross-border-integrated auto manufacturing? Doesn't that affect the power balance?
Take away the oil imported at a discount price an the trade deficit pratically disappears! And it's not the kind you get when you drill baby drill in the states, so good luck buying it from Venezuela instead! Of course, you could also mention Potash, and replace that source by... Russia! Gee... this IS getting fun.
This is going to be remembered the way Woodstock was remembered. And YOU have a chance to be there.
Democracy is NOT a spectator sport.
💥💥💥 DONT MISS THIS!!! “Hands Off” 🧨🧨🧨
🙋♂️🙋♀️🙋♂️ Gigantic nationwide demonstration! 🙋♂️🙋♀️🙋♂️
Saturday April 5 National “Hands Off” Day of Action
on the National Mall and 657 local demonstrations
Click this link to find a “Hands Off” demonstration near you.
https://handsoff2025.com/
FTR, I was at Woodstock!
You can become a rare member of a double alumnus club.
Seems a lot of MAGA did not stay away from the brown acid.
It’s kingly, yes, but in a way that demonstrates profound paranoia and megalomaniacal delusions of grandeur. Trump has no interest in the nitty-gritty of helping make the economy better or reindustrialization, so he’s just doing a hand-wavy, paper-signing gesture in the senility-addled hope that it’ll Make America Great Again. Unfortunately we all have to suffer for it.
37% tariff on Bangladesh. For the sin of selling us inexpensive clothes. And those who earn $7.75 an hour in America need to shop at Walmart and Target. So now we will onshore the garment industry? What will they be paid? Sweatshops? Child labor?
This group of business leaders in the WH are moronic. It is like they look at import FRED charts and go “trade deficit” and it’s the end of the conversation.
Thank you for another well-written piece Mr. Bernstein. However, I am struggling with you being a fan of 'Reacher', that's just somehow discordant.
I hear you. But Walt Whitman said something like “so, I contradict myself. I am large, like the ocean.“
It was A.N. Whitehead, I believe, who proclaimed (distilled and paraphrased) one great advance of modernity being proof of the wisdom of persuasion over coercion.
Norman Angell argued similarly.
The post WW2 order made it blindingly obvious - persuade, don't coerce.
Our Trump is no King Canute who was an actual King aware of his limitations.
No. Our Trump is going to try to prove himself smarter than all with his coercive trade wars. He will order the tides of economic theory to reverse.
Heck, he might even have the PPT intervene to "prove" the market sees things his way.
If so, he will learn a very nasty lesson, at OUR expense.
It’s not unpopular w republicans. They believe he is a top 3 prez of all time. I’ve been told this directly by republicans I play golf with.
I wonder how much of the executive action he's doing has to do the fact that he really is a very poor negotiator (people with big egos and thin skins often are), which means he can't get anything enacted the legal way, ie, through Congress. A bully and a negotiator are not the same thing! This is compounded by the fact that the GOP margin in the House is tiny and the Senate filibuster would stand in the way of much of this.
But,but,.. Jared…the nyt reported today that Big Brains in DC simulated the global trade war and concluded it will al be alright by tomorrow afternoon. They must be right, right?
(Imo complete bullshit from a dc ‘think tank’)
I read that too. I guess some folks have extra time on their hands.
To be more respectful, it is true that when you’re operating under highly uncertain conditions, outcomes can bounce in surprising ways. So, no one should claim to know how this turns out. But given the quality of the inputs, the outputs do not look good.
Thanks for the reply!
If companies can fully pass on the cost of tariffs to US consumers, then why do they mostly oppose them? Why do so many economists assume that profit margins are tariff-inelastic? Trump’s tariffs, esp those on USMCA partners , may be stupid, but tariffs are not intrinsically so. And what’s with progressives whining about inflation, which helps debtors (most Americans) and hurts creditors (mostly the richest)?
Why do companies mostly oppose tariffs?
1. Because if the price of (e.g.) the car you're selling has to rise by several thousand bucks to cover the cost of the tariff, customers will buy fewer. If you sell fewer cars, the economics of your business, with a lot of fixed costs, goes to hell.
2. Because if you have no idea whether your supply chain is going to be viable under this on-again off-again trade war, you can't make any business decisions.
As to cheer-leading for price inflation, what rock have you been under since 2021? Unless workers have the power to grab higher wage increases than the price increases, tariffs are a direct hit to the 99%'s standard of living. And unlike 2021 and 2022, the job market is softening, so worker bargaining power is weak.
More group-think. Precisely because higher prices will reduce the number sold, they’ll eat some of the tariff. As for the distributional effects of inflation, they’re regressive for food and energy, but slightly progressive beyond those. One big reason: 1/3 of the non-rich get Social Security, which is indexed to inflation. And, of course, the way the Fed fights inflation is highly regressive … and disemploying. Your apparent Rx - inflation bad, tariffs bad - syncs nicely with that of mainstream business. Sorry.
Haha, nonsense…’car dealers will eat the cost’ hahaha. And that will hit their bottom line.
You're right, tariffs aren't fully passed to the consumer, but it triggers a lot of price changes, and that's when the tarrifs aren't reciprocated and changing daily. If a widget imported from Canada cost the retailer 120$ instead of 100$, the one from Deepsouth inc., of a lesser quality, priced at 99$ will suddently jump at 119$. The supplier, who absorbed a 5$ loss, will look at other buyers. It may take some time, but his price will go up by 5$ for his old client, the same to his new client. The Deepsouth inc. will happelly increase his to 124$!
So wish Trump would listen to you, or ANYONE rational. I don't think he nor any of his "advisors" has read historically what tends to happen as a result of trade wars--each country retreats behind its own walls, tensions between countries build, and then--ACTUAL WAR.
The last time we tried this was 1930. Guess what happened soon thereafter?