The tariffs aren't even INTERNALLY coherent
A quick one, just cause I'm so angry about the state of everything right now.
Some people have tried to give the Trump admin the benefit of the doubt, arguing that even though the tariffs are a terrible idea, they at least come from some kind of internal logic.
I think this is wrong. There is no internal logic.
The Trump admin has offered three different justifications for the tariffs. First, that they will raise revenue for America to solve the deficit.1 Second, that they will bring back manufacturing jobs. Third, that they will force other countries to lower "secret trade manipulation policies"2 and encourage a "trade balance".
Tariffs are a pretty bad way to achieve any of these goals. But even on face, all three of these are mutually contradictory with each other.
If you bring back manufacturing jobs such that people start buying domestically, you don't get any revenue and no one else has any incentive to lower their trade barriers. This leaves America a global pariah when it comes to trade, with its citizens paying way more for basic goods and some significant portion of the country working Cambodian sweatshop jobs.
If other countries actually remove their "secret trade manipulation policies", and Trump lowers his tariffs, you don't get any revenue and you don't bring back any manufacturing. Everyone is still buying foreign goods, and the Trump tariffs are gone so there's no way to pay the government. Frankly, it's hard even imagining what this looks like because it is predicated on insanity — we have put tariffs on countries that literally cannot ever fix their trade deficits. I don't mean this as hyperbole. Trump put tariffs on an uninhabited island that only has penguins on it, while refusing to put tariffs on Russia.3
And finally, if the government is actually managing to make revenue, it means that the tariffs still exist, so other countries couldn't fix their deficits, which, of course makes sense; and Americans are still buying foreign goods anyway, i.e. they aren't buying local and there's still no domestic manufacturing. This is also a world where Americans are just arbitrarily paying higher prices, but for basically nothing in return. This is also, sadly, the most likely outcome. It would cost Nike way more to make shoes in the US than Southeast Asia — many multiples of the current tariff rate. So Nike will continue to make their shoes out of the country, and will simply raise their prices by whatever %. That will cause demand to fall, cutting overall revenue raised by the government anyway.
You cannot raise government revenue, bring back manufacturing, and get other countries to balance trade. These are mutually exclusive ideas. In the best case scenario, and I mean the absolute best case, we get one of these at extreme cost. The likely reality? We get none of these / they are all half-assed, and Americans get fucked.
In his executive order implementing tariffs, Trump claimed that there was a ‘national emergency’ — a phrase that has rapidly lost all semblance of meaning. Congress can decide today to end both the ‘national emergency’ and the tariffs that are downstream. This means the wall-of-red that we are seeing in the US markets is the direct responsibility of those members of Congress who refuse to do their jobs. If you have a Republican senator, call them and ask them to co-sponsor a Republican bill to automatically end tariffs within 60 days, and to more generally stop prioritizing loyalty to Trump over the country and it’s citizens.
Anyone who says they voted Trump because they care deeply about the deficit is either a clown or being clowned. Trump’s tax cuts on the richest people on the planet are adding somewhere between 1.5-2 trillion to the deficit.
This is a catch-all because the Trump admin isn’t even trying to balance 1:1 tariffs. There is a 32% tariff rate on Switzerland, a country that famously has no tariffs, just because they run a trade deficit with the US. Even on the merits, the formula used by the admin does not account for any financial or tech exports. American tech companies as a whole generate trillions in revenue from buyers in other nations, while also providing a lot of national security intel. None of this is counted in the balance of trade calculations!
The only countries that were not tariffed were Canada, Mexico, Russia, North Korea, Cuba, and Belarus. The first two have been tariffed separately, but the latter four are…eyebrow raising to say the least.