Trump's Tariffs: Incompetence or Mendacity?

Yesterday, cult leader, convicted felon, and failed President Donald Trump announced a broad range of tariffs on almost every country in the world, minus Russia and Belarus (I'm sure this was a simple oversight). Trump claimed that these are "reciprocal" tariffs that simply duplicate tariffs and non-tariff trade barriers that those countries place on U.S. goods. Observers quickly expressed confusion about how the various tariff rates were derived because they could find no combination of tariffs and non-tariff trade barriers that added up to Trump's figures. Eventually, one analyst — who could probably have a good future as a code breaker — discovered that the tariff rates were actually just the trade deficit that we have with each country divided by the value of the country's annual exports to the U.S. and then divided in half. When asked to confirm that this was, in fact, the calculation that was used, White House Deputy Press Secretary Kush Desai replied that the formula was incorrect and, instead, provided a complex equation containing Greek symbols and a lot of complex and confusing language. Those with a working understanding of mathematics quickly discovered that the Greek symbols cancelled themselves out (one multiplied the value by 4 while another multiplied the same value by .25) and, once the equation was simplified, indeed matched the initial discovery that the calculation was simply the trade deficit divided by the value of exports divided in half. Obviously, basing tariff rates on such a number makes no sense whatsoever.

To those of us who tend to see the Trump administration as incompetent in the best of times, it is not surprising that something as foolish as this would occur. The calculation of the tariffs was just one component of the new tariff regime that is ludicrous. Trump placed tariffs on the Heard and McDonald Islands, uninhabited islands that are primarily the home of penguins and seabirds. Not only do these islands, which I stress have no human population, not conduct trade with the U.S., they are territories of Australia and should have simply been included under Australia's tariff. At least the Heard and McDonald Islands received the same 10% tariff as Australia. Another Australian territory, Norfolk Island, was hit with a 29% tariff. The island of St Pierre et Miquelon, a place of which I had only recently learned because it was in a novel that I was reading and which is a French territory, was saddled with an astonishing 99% tariff. This appears to be because Americans bought a lot of lobsters from there while its minuscule population purchased very little from the United States. In another anomaly, the United Kingdom received a 10% tariff while the Falkland Islands, claimed by the UK, was hit with a 41% rate. This is a policy that is not serious created by people who are not serious. Or, at least that is how it appears on the surface.

U.S. Senator Chris Murphy has a different perspective. In a long thread on the Bluesky social media platform, Murphy wrote that "the tariffs are a tool to collapse our democracy. A means to compel loyalty from every business that will need to petition Trump for relief." Murphy suggests that the senselessness of the tariffs is immaterial because "They aren’t designed as economic policy". Rather, Murphy argues, Trump is using taxation as a way to weaken or even destroy our democracy. Murphy notes, as I have documented in this blog, that Trump has systematically attacked any institution that might present a challenge to his autocratic control. Trump has used federal spending to intimidate universities into subservience. He has threatened judges with impeachment. He has sanctioned law firms, pressuring them into contrite postures of obedience. He has managed to defang much of the major media. The tariffs will give Trump a means to pressure businesses into similar loyalty tests. As Murphy says, "Now, one by one, every industry or company will need to pledge loyalty to Trump in order to get sanctions relief." In exchange for sanctions being lifted, Murphy suggests that businesses may have to engage in "Public shows of support from executives for all his economic policy. Contributions to his political efforts. Promises to police employees’ support for his political opposition." The tariffs are meant to actually create economic harm in order to provide an incentive for businesses to pledge loyalty to Trump in exchange for relief. Once businesses bend the knee to Trump, they will remain under his control due to the threat that he could reimpose tariffs at any time. The end result, as Murphy sees it, is a Trump dictatorship. He writes, "And once Trump has the lawyers, colleges, and industry under his thumb, it becomes very hard for the opposition to have any viable space to maneuver." As Murphy sums things up, "The tariffs aren’t economic policy. They are political weapons." His advice for resisting Trump is public mobilization to put pressure on Congress. Murphy notes that yesterday, Senate Republicans and Democrats united to pass a resolution opposing tariffs against Canada. He believes that additional Congressional action could result from increased public demand.

Murphy may well be correct in his diagnoses of the situation. But I am pessimistic about his prescription. Yes, the Senate passed a resolution, but the House has no plans to take it up. Even if the House did get around to passing it, Trump would simply veto the resolution. In theory, Congress could override the veto. In reality, there is little chance of that. So there is probably not a legislative solution to this problem. What might work is pressure on elected leaders, particularly Republicans, to use their influence on Trump to reverse his position. More important would be encouragement to businesses to resist Trump's demands for loyalty. This is a perfect example of a situation in which, as Ben Franklin said, "We must, indeed, all hang together or, most assuredly, we shall all hang separately." As law firms are showing, surrendering to Trump only encourages him to target additional firms. Pledging subservience results in being mocked as a gleeful Trump brags about his dominance and looks for additional victims. There is nothing to stop Trump from returning to the same firms and demanding more from them. Businesses must understand that unless they want Trump as their new de facto board chairman, they must band together and resist. The public should play a role in encouraging this resistance.

Our immediate future does not look good. The stock market opened this morning prepped for a big drop. The Dow Jones Industrial Average is already more than 1,000 points down. The S&P 500 is more than 3% down. The NASDAQ composite is more than 4.5% down as I write this. This comes after a lengthy down trend in the market. But things are probably going to be even worse for everyday prices. Trump made the price of eggs a litmus test. He has managed to keep egg prices low by relying on imports. Now, those imported eggs will face tariffs. So, goodbye affordable eggs. Whether Trump is engaging in imbecilic economic policy or an intentional ploy to gain dominance over businesses, a lot of people are going to suffer.