" The real delusion is the belief that advanced societies can live off spreadsheets while their physical base erodes."

"You see the retreat of industry in rich economies as a benign, inevitable drift toward services. On the ground it looks rather less idyllic. The real delusion is the belief that advanced societies can live off spreadsheets while their physical base erodes. Service innovation is welcome, but someone still has to pour the concrete and draw the wire. Better to recognise that reality now than relearn it in a hot war or a cold winter. ...

"De-industrial economies are not more efficient. They are merely importing other people's efficiency and exporting their own purchasing power.

"The lesson is not to seal borders behind tariff walls—Donald Trump's metals duties in 2018 proved how self-harming that can be—but to run an active, open industrial strategy. Permit planning that allows large plants to be built in years, not decades; use public co-investment where spill-overs are obvious ...; use trade among allies so that capacity is pooled rather than duplicated."

~ Wladimir Kraus from his letter to The Economist

"This is also the reason why the olive branch became a symbol for peace"

 

"Athena, goddess of wisdom and war, was the guardian of the city [of Athens], and she had offered it the gift of the olive tree. Since it takes many years for olive trees to bear plenty of fruit, the planting of so many olive trees in Athens indicates that people had hope for the future and they had found ways to feed themselves until then.
    "This is also the reason why the olive branch became a symbol for peace. If it takes two decades for your trees to bear a substantial harvest, you are extra vulnerable to warfare that might wipe out all your investments in one moment. Therefore olive growers usually insisted on negotiations and reconciliation when city-states were at each other's throats, and the olive came to symbolise both commerce and peace."

~ Johan Norberg on free trade as a powerful palliative for conflict and war. From his book Peak Human: What We Can Learn From the Rise dnd Fall of Golden Ages [hat tip Tony Morley]

"Over recent decades, the world trading system has drifted into a distorted, sub-optimal equilibrium"

"[O]ver recent decades, the world trading system has drifted into a distorted, sub-optimal equilibrium, shaped by regulatory and political asymmetry, integration clubs and rule-based inertia. ...

"So, while tariffs fell, supply chains over-concentrated. The post-1990s decline in tariffs between different economic structures enabled deep global supply chains. This increased efficiency — but also vulnerability, dependency, and strategic exposure.

"In turn, non-tariff barriers [in the form of excessive internal regulation] rose, especially in the European Union. It seemed like a good idea at the time – for some people – but the reduction in market access for outsiders and entrenching of the local status quo was less transparent. ... the expansion of the European Union from 9 members in the 1980s to today’s 27 ... has privileged trade for insiders, whilst diminishing the relative position of external players. ... amounting to a reversal of the principle of mutual recognition [and] the foundation of liberal trade ... [along with] a deeper recalibration of the global trade order towards more explicit trading blocs (which crucially will need to deregulate internally to grow) ...

"This will not be painless. The transition out of a long-standing but sub-optimal equilibrium rarely is."

~ from the uncredited post 'Europe is in trouble – and it’s not just trade'

A 90-day delay to fix what Donald Trump started

 

"MAGA—genuinely, explain the 'win' to me. The claim is this deal 'brought China to the negotiating table.' But… they were already there. We’re not further ahead than we were 90 days ago. No resolution. No structural wins. Just a 145% tariff that tanked the markets—now walked back to 30% so we can 'keep talking.' ...

    "I’m asking a specific question: what was actually accomplished here? We’re in the exact same place we were 90 days ago. No structural reforms. No resolution. Just tariffs that were hiked, tanked markets, and then were walked back during joint talks both sides agreed to in Geneva. ...

"Nobody wanted the tariffs. They hurt consumers and businesses. Reducing them helps—but that’s not a victory. That’s just undoing damage we caused ourselves. 

    "And wasn’t the whole point of this to force companies to stop buying from China and make everything in America? So how exactly is that going to happen now? Seriously—I’m asking. Help me understand what was accomplished.

"I understand this wasn’t a unilateral move. The U.S. and China both sent delegations to Geneva and mutually agreed to lower tariffs for 90 days to de-escalate the trade war. 

    "There’s no evidence China begged us for relief—this was a joint decision to pause and keep talking. To me, it just looks like a temper tantrum that backfired. No strategy. No plan. Just retreat, then spin it as a win.

"Dialogue and negotiation were already happening before Trump’s 145% tariff stunt wrecked the markets. There’s no 'position of strength' here, he lit the fire, panicked when it backfired, then called the act of putting it out a victory. He doesn’t have more strength now… 

"And no one’s demanding a full framework in 2 days, we are just calling out the fact that nothing was achieved except reversing his own mess. That’s not strategy. That’s spin. ...

"A 'Win'? China didn’t “drop” export controls—they paused them for 90 days as part of a mutual de-escalation agreement. That’s not a concession, it’s a temporary reset so both sides can keep negotiating. Nothing structural changed. 

    "A 'Win'? Our tariffs on China were 12% Trump jacked them up to 145%, tanked the markets, then walked them back to 30%. That’s not a win—it’s called cleaning up your own mess and calling it progress. 

    "A 'Win'? China’s tariffs dropped to 10%? Sure—after we started a trade war that forced them to hike them in the first place. Most of their original tariffs ranged from 5–15% and averaged 7.2% on key sectors. You’re bragging about partially undoing damage Trump caused. This wasn’t strategy. It was a tantrum, a retreat, and now you’re dressing it up like 3D chess, dipshit."

~ tweeter Agent Self FBI on the 90-day pause on self-inflicted harm

"The deal, it turned out, was somewhat less than advertised"

"On Thursday, the press pool was summoned at 10:48 A.M. for what Trump had billed as a “very big and exciting” announcement of a new trade deal between the U.S. and the U.K. …

“The deal, it turned out, was somewhat less than advertised—an agreement in principle, after years of talks, and with many details to be finalised. …

“Still, it was something, and Trump, with all the zeal of a used-car salesman, plumped for the agreement, though he admitted it wasn’t quite done yet. “In the coming weeks, we’ll have it all very conclusive,” he vowed. ….

“There are many words that come from Trump’s mouth, and few that he will not renounce when they are no longer convenient.“

from the article A Day in the Life of a Live-Streamed Donald Trump

"Trump's "big" trade deal is with the UK:- It's a framework not a deal - They're our 11th largest trading partner - They're only 3% of US trade (97% to go) - They *already* charge average tariffs of only 1% (limited upside)
    "It's a photo op, with little macroeconomic significance. ...   

"Overwhelmingly the most important news here -- in terms of macroeconomic impacts -- is that the US is retaining 10 percent tariffs on nearly everything. Do the numbers and it's obvious that any industry-specific tweaks are second order."

~ Justin Wolfers on the "major" UK-US Trade announcement

“What protection teaches us, is to do to ourselves in time of peace what enemies seek to do to us in time of war.”

"Free trade consists simply in letting people buy and sell as they want to buy and sell. It is protection that requires force, for it consists in preventing people from doing what they want to do. Protective tariffs are as much applications of force as are blockading squadrons, and their object is the same—to prevent trade. The difference between the two is that blockading squadrons are a means whereby nations seek to prevent their enemies from trading; protective tariffs are a means whereby nations attempt to prevent their own people from trading. What protection teaches us, is to do to ourselves in time of peace what enemies seek to do to us in time of war."

~ Henry George from his 1886 book Protection or Free Trade

'The Moral Case for Globalisation'

"THE TERM TYPICALLY USED to denote advocates of globalisation is 'globalists,' which has emerged primarily as a term of abuse, especially on the far right. 'There is no more left and right [says one]. The real cleavage is between the patriots and the globalists.' ...

"[T]his essay’s definition of globalisation is the relatively free movement of people, things, money, and ideas across natural or political borders. .... A consequence of increasing globalisation is an increasingly integrated and complex global system of production and exchange. ...

"There is a vast amount of evidence that documents the impact of reducing barriers to trade, travel, and other forms of exchange across borders. Much of it is presented in other essays in this series, such as Johan Norberg’s 'Globalisation: A Race to the Bottom—or to the Top?' Contrary to some critics of globalisation, the results have been spectacularly positive for the world’s poor, as wages have increased, jobs have become safer, and the use of children for labor has plummeted. Increasing wealth, in turn, is strongly connected to improving health, and the global spread of improvements in medicines and technologies has improved health outcomes even in regions that have not participated as much in the exchange of goods. ...

"People agree to exchange because they expect to be better off by exchanging than by not exchanging. Making it possible to exchange with more people is beneficial to those whose range of potential exchange partners has increased. Adam Smith titled the third chapter of his 'An Inquiry into the Nature and Causes of the Wealth of Nations' “That the Division of Labour is Limited by the Extent of the Market,” a thesis that he illustrated by demonstrating the greater prosperity and progress in the ancient world for those nations with proximity to the sea and to navigable rivers. Due to the lower friction of transportation over water compared to land, that proximity facilitated exchange with much larger areas and with many, many more people. To the extent that policies of governments erect barriers to exchange, it is analogous to making transportation deliberately more difficult, which would generally be understood to be harmful to the vast majority of people. ...

"Globalisation is not limited to the exchange of goods and services across borders; it also encompasses the exchange of ideas, as well as scientific, economic, artistic, and other forms of cooperation. ...

"Ever since Plato’s assault on the open society, critics of globalisation have tended to view cultural innovation and exchange as a pure loss rather than as the emergence of new forms of human life that increase the available store of possible human understandings and experiences. ...

"PEACE AND HARMONY ARE consequences of trade.

Cultural exchange is foundational to living cultures. Pasta, for which Italian cuisine is famous, has origins in Asia, whether it was brought to Italy by Marco Polo, as folklore tells, or earlier, and the tomatoes that form the base of many Italian sauces are cultivated from plants brought from Meso-America by Spaniards. Food has been globalised for millennia, but somehow that has not stopped it from developing an amazing diversity of identifiable cuisines, styles, and dishes with many distinctive characteristics. The same can be said of architecture, traditions, mores, religions, and every other element of human culture. ...

"The key to such peace is not merely the movement of goods and services across borders but voluntary exchange. ... Freedom to trade refers to the voluntary transfers of goods and services and not to state trafficking in tanks and missiles, the sale of products of forced labour (such as the products of Uyghur labourers imprisoned by the Chinese Communist Party), or the sale of nationalised products (such as the oil and gas resources that were confiscated by Putin). Exchange and transfers organised by conquest are mutually impoverishing, as Adam Smith demonstrated of the British Empire ...

"SINCE PLATO'S TIME, OPPONENTS of globalisation have sought to protect established orders from the voluntary choices of those who live in them. Increasing the opportunities for exchange, cooperation, communication, and travel is enriching for the majority, although it may threaten the hold on power of the rulers. Some prefer war over peace, because 'making bigger profits in peace' is worse than war. Reasonable people should think before embracing such attacks on globalisation ...

"Rigorous thinking and empirical research refute, one by one, attacks on globalisation in the name of morality. The world is better when barriers to free and voluntary cooperation are reduced. The world is better because of globalisation."

~ Tom Palmer from his article 'The Moral Case for Globalisation'

The US 'Rustbelt' explained

"[M]any people reflexively blame trade for the decline of [what's become knows as the American] 'Rustbelt.' ...
    "But ... [d]oes trade explain the decline of steel employment from roughly 190,000 to 84,000?

If trade [alone] explained the loss of employment in steel mills, then you would expect to have seen a precipitous decline in domestic steel production. In fact, there’s been very little change in steel output during a period where employment has plunged sharply:

"[I]mports have had some impact on employment in manufacturing. But the primary cause of job loss has been automation [exacerbated by] unionisation forcing jobs to other parts of the country, rather than trade."

~ composite quote by Scott Sumner and Jon Murphy from Scott's post 'Trade as a scapegoat'

Bastiat on the stupid "balance of trade"

"The ship that carried them off sank on its departure. The customs officer, who had noted on this occasion an
export of 100 francs, never had any re-import to enter in this case. Hence, Monsieur Mauguin would say, France
 gained 100 francs; for it was, in fact, by this sum that the export, thanks to the shipwreck, exceeded the import."

Protectionists of all stripes often rail about trade deficits. An unfavourable balance of trade. One of the catch phrases of these people, because at some level even they realise the value of trade, is that they want “fair trade.” That’s just protectionism under the guise of being pro-free trade.

So what exactly is the stupid goddamn "balance of trade"? And how do bloody protectionists calculate their alleged profits and losses?

One of history's best economic story-tellers, the great Frenchman Frederic Bastiat, explained the fallacy way back in the nineteenth century with the help of a contemporary protectionist ...

ALLOW ME TO ASSESS THE validity of the rule according to which Monsieur Mauguin and all the protectionists calculate profits and losses. I shall do so by recounting two business transactions IN which I have had the occasion to engage.

I was at Bordeaux. I had a cask of wine which was worth 50 francs; I sent it to Liverpool, and the customhouse noted on its records an export of 50 francs.

At Liverpool the wine was sold for 70 francs. My representative converted the 70 francs into coal, which was found to be worth 90 francs on the market at Bordeaux. The customhouse hastened to record an import of 90 francs.

Balance of trade, or the excess of imports over exports: 40 francs.

These 40 francs, I have always believed, putting my trust in my books, I had gained. But Monsieur Mauguin tells me that I have lost them, and that France has lost them in my person.

And why does Monsieur Mauguin see a loss here? Because he supposes that any excess of imports over exports necessarily implies a balance that must be paid in cash. But where is there in the transaction that I speak of, which follows the pattern of all profitable commercial transactions, any balance to pay? Is it, then, so difficult to understand that a merchant compares the prices current in different markets and decides to trade only when he has the certainty, or at least the probability, of seeing the exported value return to him increased? Hence, what Monsieur Mauguin calls loss should be called profit.

A few days after my transaction I had the simplicity to experience regret; I was sorry I had not waited. In fact, the price of wine fell at Bordeaux and rose at Liverpool; so that if I had not been so hasty, I could have bought at 40 francs and sold at 100 francs. I truly believed that on such a basis my profit would have been greater. But I learn from Monsieur Mauguin that it is the loss that would have been more ruinous.

My second transaction had a very different result.

I had had some truffles shipped from Périgord which cost me 100 francs; they were destined for two distinguished English cabinet ministers for a very high price, which I proposed to turn into pounds sterling. Alas, I would have done better to eat them myself (I mean the truffles, not the English pounds or the Tories). All would not have been lost, as they were, for the ship that carried them off sank on its departure. The customs officer, who had noted on this occasion an export of 100 francs, never had any re-import to enter in this case.

Hence, Monsieur Mauguin would say, France gained 100 francs; for it was, in fact, by this sum that the export, thanks to the shipwreck, exceeded the import. If the affair had turned out otherwise, if I had received 200 or 300 francs’ worth of English pounds, then the balance of trade would have been unfavorable, and France would have been the loser.

From the point of view of science, it is sad to think that all the commercial transactions which end in loss according to the businessmen concerned show a profit according to that class of theorists who are always declaiming against theory.

But from the point of view of practical affairs, it is even sadder, for what is the result?

Suppose that Monsieur Mauguin had the power (and to a certain extent he has, by his votes) to substitute his calculations and desires for the calculations and desires of businessmen and to give, in his words, “a good commercial and industrial organisation to the country, a good impetus to domestic industry.” What would he do?

Monsieur Mauguin would suppress by law all transactions that consist in buying at a low domestic price in order to sell at a high price abroad and in converting the proceeds into commodities eagerly sought after at home; for it is precisely in these transactions that the imported value exceeds the exported value.

Conversely, he would tolerate, and, indeed, he would encourage, if necessary by subsidies (from taxes on the public), all enterprises based on the idea of buying dearly in France in order to sell cheaply abroad; in other words, exporting what is useful to us in order to import what is useless. Thus, he would leave us perfectly free, for example, to send off cheeses from Paris to Amsterdam, in order to bring back the latest fashions from Amsterdam to Paris; for in this traffic the balance of trade would always be in our favor.

Yet, it is sad and, I dare add, degrading that the legislator will not let the interested parties decide and act for themselves in these matters, at their peril and risk. At least then everyone bears the responsibility for his own acts; he who makes a mistake is punished and is set right. But when the legislator imposes and prohibits, should he make a monstrous error in judgment, that error must become the rule of conduct for the whole of a great nation. In France we love freedom very much, but we hardly understand it. Oh, let us try to understand it better! We shall not love it any the less.

Monsieur Mauguin has stated with imperturbable aplomb that there is not a statesman in England [in the nineteenth century at least] who does not accept the doctrine of the balance of trade. After having calculated the loss which, according to him, results from the excess of our imports, he cried out: “If a similar picture were to be presented to the English, they would shudder, and there is not a member in the House of Commons who would not feel that his seat was threatened.”

For my part, I affirm that if someone were to say to the House of Commons: “The total value of what is exported from the country exceeds the total value of what is imported,” it is then that they would feel threatened; and I doubt that a single speaker could be found who would dare to add: “The difference represents a profit.”

In England they are convinced that it is important for the nation to receive more than it gives. Moreover, they have observed that this is the attitude of all businessmen; and that is why they have taken the side of laissez faire and are committed to restoring free trade.

[Text by Frederic Bastiat from his masterpiece: Economic Sophisms; introduction excerpts by Marco den Ouden]

"Ripped-off" by the pizzaman

Sorry, no, we can't avoid talking about bloody tariffs and trade deficits again. 

XKCD explains it all very simply ...

[Hat tip Duncan B.]

"Tariffs Aren’t Liberating": Your Tuesday Tariffs Ramble [UPDATED]

UPDATE: Some more great links here curated by Don Boudreaux, to help you put this calamity on context.

Since it's the topic of the day a historic turning point in human affairs, the least I can do is offer readers a ramble around the topic of tariffs and the destruction of tariff wars — basically, around the many writers reciting the multiplicity of ways in which the Trump Administration has fucked us.

"“Liberation Day”: That is what US President Donald Trump has called Wednesday, April 2, the day he announced huge swaths of taxes on imports worldwide. Despite the label, it was far from a day of liberation. By making imports to the US more expensive, the government is actively increasing the cost of living for American consumers.
    "The Trump administration has fallen for one of the most common misconceptions about trade—that it only benefits a country when it is the exporter. This could not be further from the truth. One of the greatest benefits of free trade lies with the importing country, where consumers gain access to a huge range of goods, crucially, at lower prices.
    "Whether it’s clothes, food, medical supplies, or mobile phones, access to the global market reduces the cost of living and increases consumer choice, often alleviating poverty in the process.
    "It comes down to a very simple principle. No one person could produce everything he or she consumes. No family or household could do so either. No city, town, or province could produce absolutely everything they consume. Equally, no country can produce everything it consumes, nor should it. Attempts to achieve autarky are acts of economic self-harm. Freedom to exchange across borders is win-win: it allows consumers to access a plethora of goods and services, improving welfare overall."

Tariffs Aren’t Liberating - Reem Ibrahim, FOUNDATION FOR ECONOMIC EDUCATION

"Tariffs are irrational both morally and practically.
    "Morally, tariffs are rights violations - they restrain or prohibit individuals from trading freely and voluntarily in their own self-interest with whomever - no matter where they reside geographically. ...
    "Practically, tariffs punish the individuals in the country which implements them. Trump even acknowledges the pain. But he mystically thinks this pain will be good and lead us to prosperity.
    "Tariffs raise prices, cause shortages, and decrease productivity. They destroy wealth, businesses, income, and jobs. This is well known in theory and practice. See the Smoot-Hawley Act and its role in making the Great Depression even worse.
    "Trump’s foreign policy is morally and practically irrational.
    "What is the moral and practical foreign policy solution?
    "Free trade."

          ~ Andy Clarkson

"The essence of capitalism's foreign policy is free trade—i.e., the abolition of trade barriers, of protective tariffs, of special privileges—the opening of the world's trade routes to free international exchange and competition among the private citizens of all countries dealing directly with one another."

The Roots of War - Ayn Rand, ARI CAMPUS

"Fundamental to the argument for high tariffs has been the argument that trade deficits reflect America being "exploited" or "taken advantage of." In this article of mine on, "Why Trade Deficits Don't Matter -- Unless Caused by Government," I explain the misguided economic reasoning behind this claim, and why the far better policy is free trade."
Trade Deficits Don’t Matter – Unless Caused by Government - Richard Ebeling, FUTURE OF FREEEDOM FOUNDATION

"Donald Trump is fond of saying that trade wars are easy to win. Among the litany of patently false Trumpisms, this may well prove one of the most disastrous. ...
    "Protective tariffs risk triggering a cycle of escalation that ends well for no one."

No One Wins a Trade War - William Bernstein, THE ATLANTIC

"America can’t be outcompeted because America does not produce or trade anything.
     "Nations do not compete with nations. Individual firms compete with individual firms abroad. Ford competes with Toyota. America does not compete with Japan. Nations are trading partners, not competitors."

Why America can't be outcompeted - Harry Binswanger, HARRY'S SUBSTACK

"“We are seeing a combination of true-believing mercantilism, shocking ignorance about how the global economy works, and shocking incompetence in the planning and execution of economic policy,” says Michael Strain."
Trump's aggressive push to roll back globalisation -FINANCIAL TIMES (paywall0

"Like the post-1945 British Labour governments, he wants to shelter domestic manufacturing and the working class behind tariffs while reducing overseas commitments. But the net result will be both economically damaging and geopolitically weakening. Americans will come to miss globalism and policing the world. They will belatedly realise that there is no portal through which the United States can return to the 1950s, much less the 1900s. And the principal beneficiary of Project Minecraft will not be Russia, but China. Call it Project Manchuria. ... 

"The president stands as much chance of reindustrialising the U.S. as you do of getting your frozen laptop to work by smashing the motherboard with a Minecraft hammer."

Trump’s Tariffs and the End of American Empire - Niall Ferguson, THE FREE PRESS

"So think of it as a world wide Brexit like the U.S. leaving the global economy.
    "A trade lawyer at a global law firm here in London told me their clients see Trump’s tariffs as “worse than Brexit” as they’re dealing with rapidly changing trade rules on a massive scale. It’s not just the tariffs that Trump has imposed, but the retaliation it will provoke."

‘How Ugly Is This Going to Be?’ - Graham Lanktree, POLITICO

"You will go to work in a hot, noisy, dirty factory for low wages. And you will like it. 

The quality of life your grandfather had is more than good enough for you!"

"It sounds so sensible: why not use protection and industrial policy to preserve manufacturing capacity “just in case” of, say, a war or a pandemic? And, to be sure, this is a better argument for some limited government intervention on trade and investment flows than wanting to tax imported bananas or revive manufacturing.
    "But even then it’s not the slam dunk some people imagine. Below is my chapter on this issue from Economics In One Virus, published in 2021. It’s just as true and relevant today."

Flaws in the "Just In Case," Self-Sufficiency Case for Protectionism - Ryan Bourne, WAR ON PRICES

"The populist story of the death of U.S. manufacturing is nonsense. Mr. Vance and his cohort maintain that increased free trade with countries such as China in 2000 or Mexico in 1994 killed American jobs. It’s true that the number of manufacturing jobs is lower than it was in 1970. But that’s because we can make so much more with fewer people. Blame technology, not trade.
    "Real hourly output per manufacturing employee has been on an upward trend since 1959. Real U.S. manufacturing value-added—the sector’s contribution to gross domestic product—reached its highest recorded level in 2022. Manufacturing output was close to its all-time high in 2022, and the U.S. remained the global leader in manufacturing value-added per worker.
    "Steel is one example. In 1980, one steelworker could produce 0.083 tons of steel in one hour. By 2018, one steelworker could produce 1.67 tons in an hour. This is a good thing. Wage and income data in the U.S. show the rising tide is lifting all boats—especially the smallest.
    "Americans don’t want their children to have to work punishing jobs in a steel mill, and it’s evident they don’t have to. Manufacturing jobs, as a share of total employment, have been on a downward trend since 1943—falling from 39% to under 25% by the end of 1970 and hitting 20% in 1980. This decline started long before Ronald Reagan ran for office, before China received Most Favored Nation status for outsourcing manufacturing, before Bill Clinton signed the North American Free Trade Agreement and before the World Trade Organization was created. The trends even started five years before the U.S. joined the General Agreement on Tariffs and Trade."
Free Trade Didn’t Kill the Middle Class - Norbert J. Michel, WALL STREET JOURNAL

“The philosophy of protectionism is a philosophy of war.”
          ~ Ludwig von Mises

"“When it comes to steel, it’s fantastic for our industry,” said Jack Maskil [president of the United Steelworkers Local 2227 in Pittsburgh’s Mon Valley], “but what about everything else?” ...

    "On the one hand, they are thrilled that their industry will be a key beneficiary of the 25 percent tariff imposed on steel imports to the U.S. ...
    "But while the steelworkers are also hoping that tariffs will bring about a revival of manufacturing jobs, they also worry about their effect on the economy, and on their own purchasing power."

What Do American Steelworkers Think About Trump’s Tariffs? - Ethan Dodd, THE FREE PRESS

"President Trump’s ‘Liberation Day’ tariffs risk domino effect across the globe as Chinese goods look for new markets."

The Rest of the World Is Bracing for a Flood of Cheap Chinese Goods - WALL STREET JOURNAL

"The proponents of protectionism say, “Free trade is fine in theory but it must be reciprocal. We cannot open our markets to foreign products if foreigners close their markets to us.” China, they argue, to use their favorite whipping boy, “keeps her vast internal market for the private domain of Chinese industry but then pushes her products into the U.S. market and complains when we try to prevent this unfair tactic.”
    "The argument sounds reasonable. It is, in fact, utter nonsense. Exports are the cost of trade, imports the return from trade, not the other way around."

In 1970, Milton Friedman Advocating Moving Unilaterally Toward Free Trade Rather Than Retaliating. We Still Haven’t Learned That Simple Lesson -Mark Perry, AEI

"This idea that Donald Trump is just playing hardball to negotiate tariff rates down on US exports is absolutely ridiculous. The % of tariffs applied to US-produced goods has declined consistently since WW2 and was nearly nothing...
    "UNTIL! Donald's first term, and now his second.
    "And yet I keep seeing so many MAGA supporters saying: 'We're already seeing countries backing down from their tariffs!'
    "You're literally winning a battle and losing the war at the same time ..."

~  Landon Walsh

"Then there’s Trump’s fascination with tariffs. The damage Trump has caused Ukraine and Nato pales by comparison to what his tariffs will do to America’s economy and the entire international economic system. If Trump had acted on April 1 instead of 2, he could quickly have said it was all an April Fool’s Day joke, thereby saving the global economy trillions of dollars of damage when markets started heading south. Unfortunately however, Trump is totally serious, a fact evident long before “Liberation Day.”
    "Here too, “experts” and anxious businesspeople steadfastly ignored Trump labelling “tariff” the dictionary’s most beautiful word. Tariffs, they said, will be targeted, carefully calibrated, and he’ll do deals quickly. It’s all a bargaining tactic, Treasury Secretary Bessent said in October, 2024: “escalate to de-escalate”. Even as global stock markets drop like rocks, experts are still rationalising what his “strategy” is.
    "Wrong again. Trump is more likely to win the Nobel Prize for literature than for peace."

I worked for Donald Trump. This is the key to understanding him: It’s not about America, and there’s no connection to the real world - John Bolton, TELEGRAPH (UK)

"Reminder: This policy was spearheaded and implemented by a man who thinks nobody says the word “groceries” these days because “it’s an old-fashioned word” and he somehow brought it back into the limelight.
    "Donald Trump is a motherfucking moron. Those who knew this and voted for him anyway because he gave them explicit license to be assholes deserve every last bit of pain his policies will cause them."

          ~ Stephen T. Stone

"In times of upheaval, those closest to power often find ways to turn disruption into wealth. Trump’s erratic tariff wars, billed as economic nationalism, upended markets, collapsed sectors, and triggered retaliatory shocks. But while farmers went bankrupt and consumers paid more, the market opened space for those with foresight—or insider access—to buy low and consolidate.
    "Geographer David Harvey calls this accumulation by dispossession: crisis used not to correct the system, but to extract from it. Devalue public assets. Destabilise protections. Create just enough chaos to buy cheap what others are forced to abandon. It’s not just policy failure—it’s extraction dressed as populism.
    "The con isn’t just psychological. It’s material. It’s not just about being lied to—it’s about being looted.
    "And that’s what makes this moment different—and more dangerous. The scam isn’t happening outside the system. It’s running through it."

The Confidence Game: How Trump’s Con Threatens More Than the Truth - James Greenberg, JAMES'S SUBSTACK

"The latest rumor, when I started drafting this column, was that President Trump will suspend the tariffs for a 90-day period, with the exception of those on China. Markets started going back up again.
    "But “the very latest information” doesn’t stay current for long these days. The new report—but don’t count on it—is that the 90-day pause is not real after all. That revision came out before this draft was finished. And markets again whipsawed.
    "The Trump administration has created a new monster—one of unpredictability and erratic behavior. We simply cannot predict with any degree of accuracy what will happen next. By the time you are reading this article, there will probably be some newer report about the tariffs or threat of tariffs, and then another report after that.
    "Even if the White House winds up instituting a pause on the proposed tariffs—or ultimately adopts much better economic policies—this seesawing may plunge the American and perhaps also the global economy into recession."

A Contagion of Uncertainty - Tyler Cowen, THE FREE PRESS

[WATCH] Singapore must be clear-eyed about dangers ahead: Singapore's Prime Minister Wong on implications of US tariffs:

"Donald Trump has demonstrated his profound misunderstanding of the basic economic principles of international trade for several years now, and perhaps reached a pinnacle when he told the New York Daily News in an interview last August that “we’re getting hosed by the Chinese — and that we’ve done it with our eyes wide shut.” ...
    "[Trump adviser] Peter Navarro, in his Wall Street Journal opinion piece earlier this week (see related post here) demonstrated his fundamental misunderstanding of international trade when he opened his op-ed with the following question: “Do trade deficits matter?” Just to ask the question is to admit one’s ignorance of trade theory, which has been pretty settled on this topic since Adam Smith taught us in 1776 that “Nothing…can be more absurd than this whole doctrine of the balance of trade. ..."

Trade Deficits Don’t Matter; Understanding Deficits Do: Protectionists' idea of a trade balance is completely backward -Mark Perry, FOUNDATION FOR ECONOMIC EDUCATION

Tariffs are a suicide bomb":

Trump's team said they based their "reciprocal tariff" calculation for each country based on the tariffs and impediments put on American imports by those countries. But no. It's even more irrational: "[Trump's chart] features an estimate of 'Tariffs Charged to the USA' by other countries that nobody could figure out, until a financial journalist realised it was just how much we export to that country, minus how much we import, divided by how much we import."

"Under a system of perfectly free commerce, each country naturally devotes its capital and labour to such employments as are most beneficial to each. This pursuit of individual advantage is admirably connected with the universal good of the whole. By stimulating industry, by regarding ingenuity, and by using most efficaciously the peculiar powers bestowed by nature, it distributes labour most effectively and most economically: while, by increasing the general mass of productions, it diffuses general benefit, and binds together by one common tie of interest and intercourse, the universal society of nations throughout the civilised world."
        ~ David Ricardo (1817)

"Why is today’s Trump so different from the Trump of his first term? .. ". Turns out, the answer is very simple" Back then he had people, and a Congress who would say "No." But now the yes men are in power.

What happened to Trump? Why has be become so pro-Russian? - Roman Sheremata, UKRAINE TODAY

Trump's tariffs policy came from his economic advisor Peter Navarro, who invented a fake expert in his books to justify it. "Peter Navarro liked to quote a guy named Ron Vara in his books. Those books are largely what led to Navarro becoming a top adviser to President Trump and helping to shape U.S. policy on China. Here’s the thing about Ron Vara, though: He doesn’t exist. ...

"Ron Vara is an anagram of Navarro."

Trump's China Muse Has an Imaginary Friend - Tom Bartlett, CHRONICLE OF HIGHER EDUCATION

 

Second-term Trump is who Trump always was. This is Trump without many adults in the room stopping him getting his way. This is Trump surronded by Yes Men in a cult. This is Trump. A freedom-hating, dictator-loving, trade-despising child who wants the power of a tryant. Someone who has no regard for facts and who will utter any lie he wishes - no matter how ridicolous it is. And his believers are expected to believe it. Under fear of discommunication from the cult.
This is what you asked for when you voted for Trump. This is what you got. I hope you are happy....

          ~ Dwayne Davies

"An often forgotten truth is that it is not just military warfare that can cause injury to innocent bystanders, the same inescapably happens in economic warfare initiated by governments, as well. But in the latter case the human “collateral damage” is a targetted victim. ...
    "Tariffs and counter-tariffs are tools of economic warfare that are said to be targeting the “aggressor” country. But the very nature of how tariffs and counter-tariffs work, results in the main targets being innocent bystanders in the countries concerned.
    "Once we disaggregate “nations” into their, respective, individual buyers and sellers, producers and consumers, we see that the most damage falls on the economic “non-combatants,” of whatever the original “dispute” may be about ..."

Trump’s Economic Warfare Targets Innocent Bystanders - Richard Ebeling, FUTURE OF FREEDOM FOUNDATION

"TikTok is a major bargaining chip in a grave geopolitical struggle. Given the data users have always sent to Beijing, it’s been a bargaining chip ever since it arrived on America’s digital shores. For Trump, though, it’s not exactly his chip to bargain with: Congress already determined the American course of action. The mystery is why nobody seems to mind Trump delaying its execution — or at least, why nobody is complaining publicly....

    "Trump’s motives here are not difficult to parse, and the bill in question is legitimately problematic. He’s popular on TikTok, and close to one of the company’s major investors. ...
    "As fallout continued from his tariff bombshell — including the legitimacy of his emergency authority to implement the new rates — barely anyone batted an eye at TikTok getting another dubious bailout."

Why Trump keeps saving TikTok - Emily Jashinsky, UNHERD

"Since my last essay on the crisis of democracy, the assaults on democratic checks and balances have escalated. Without agreement from Congress, Trump’s DOGE shut down the U.S. Agency for International Development with stunning speed. Although a federal court blocked further implementation, ruling that the action “likely violated the Constitution,” by then the agency had already been gutted and largely dismantled along with many other agenices. Then, in an alarming politicisation of the military high command, Trump fired the Chairman of the Joint Chiefs of Staff, the Chief of Naval Operations, the Air Force Vice Chief of Staff, and the judge advocates general (the highest-ranking legal authorities) for the Army, Navy, and Air Force.
    "Pressing his claim to imperial power, Trump has moved to assert absolute control over all federal regulatory bodies, including the Securities and Exchange Commission, the Federal Trade Commission, and the Federal Communications Commission. This not only hobbles their capacity to act independently in the public interest but opens the door to massive corruption. As DOGE seizes control of more and more of the government’s most sensitive and highly centralised stores of data, the conflicts of interest proliferate for its chief 'overseer,' Elon Musk, who over the years has received 'at least $38 billion in government contracts, loans, subsidies and tax credits.' And Just Security has documented an 'alarming' pattern of 'politicisation and weaponisation of the Department of Justice since Trump has retaken office.
    "The United States now faces the grave and imminent danger of its democracy decaying into a 'competitive authoritarianism'.”

How to Undo Trump’s Growing Dictatorship and the Damage it Is Inflicting - Larry Diamond, THE UNPOPULIST

"We have to realise that Trump is not joking about any of this. He’s not joking about invading Greenland, and he’s not joking about running for a third term. He’s as serious about all of this as he was about the tariffs. The evidence indicates that he will do it all, whatever he can get away with. ...
"While we prepare a mass movement—and Donald Trump crashing the economy with the world’s stupidest tariffs will help us a great deal—we need to fight everything. What that will specifically mean is that we have to fight a lot of losing battles. ...
"There are five reasons to fight early and often, no matter the odds of winning any one fight.
    1. It lays down a marker. ....
    2. It mobilises others to fight. ....
    3. It delays and exhausts the strongman. ...
    4. Sometimes you win. ...
    5. You find out what works and who fights. ...."

How to Fight Back - Robert Tracinski, TRACINSKI LETTER

"The patriot .. "

 

“Before, the patriot, unless sufficiently advanced to feel the world his country, wished all countries weak, poor, and ill-governed but his own; he now sees in their wealth and progress a direct source of wealth and progress to his own country.” 

~ John Stuart Mill, from his speech 'England Under Free Trade: An Address Delivered to the Sheffield Junior Liberal Association, 8th November, 1881' (quoted in The Atlantic's article 'No One Wins a Trade War.' Hat tip Tony Morley)

"Trump's policy, unveiled yesterday afternoon, is called a 'reciprocal tariff plan,' which is a bit like calling a hammer a 'reciprocal pillow'."

"There’s a fundamental problem with Donald Trump’s new trade policy: it fails a test that actual 5th graders can pass. I know this because I tried explaining his 'Liberation Day' trade plan to one last night. Here’s how that conversation went:

“Imagine you want to buy a toy at a store which costs $50. You pay for the toy and walk away with it. The President looks at that transaction and says ‘wait, you paid the store $50 and the store paid you nothing, therefore the store is stealing from you. To 'fix' this, I’m going to tax the store $25. From now on that same toy costs $75.”

"The 5th grader looked at me like I was crazy. 'Whaaaaaaat? None of that makes sense. If I pay for something, it’s not stealing. And taxing the store seems stupid, and then everything is more expensive. Why would anyone do that? That can’t be how it works.'
    "This is the core problem with Trump’s 'Liberation Day' trade policy: it fundamentally misunderstands what trade deficits are. And if you think that’s bad, just wait until we get to the part where this policy declares economic war on penguins and our own military base. ...

"The policy, unveiled yesterday afternoon, is called a 'reciprocal tariff plan,' which is a bit like calling a hammer a 'reciprocal pillow.' The premise is that since other countries have high tariffs on us (they don’t), we should have high tariffs on them (we shouldn’t). But that’s not even the weird part.
    "At the heart of this policy is a chart. Not just any chart, but what might be the most creative work of economic fiction since, well, Donald Trump launched his memecoin. Trump proudly displayed these numbers at a White House event, explaining that they showed the tariffs other countries impose on the US. He emphasized repeatedly that the US was being more than 'fair' because our reciprocal tariffs would be less than what other countries were charging us.
    "There was just one small problem: none of the numbers were real tariff rates. Not even close.
    "At first, observers assumed the administration was simply inventing numbers, which would have been bad enough. But the reality turned out to be far more stupid. ...

"All of this glosses over the fact that 'reciprocal tariffs' are not reciprocal at all. Trump’s team is making up fake tariff numbers for foreign countries based not on anything having to do with tariffs, but on trade deficits, which is just an accounting of inflows vs. outflows between two countries. It’s only reciprocal because the Trump team faked the numbers.
    "On top of that, Trump can only impose tariffs (normally a power of Congress) based on the International Emergency Economic Powers Act and the National Emergencies Act. Both laws require there to be an actual 'emergency.' The only emergency here is that nobody in the administration understands what trade deficits are....

"So to sum up where we are:The administration invented an economic emergency

• To justify a policy based on made-up numbers
• Generated by an AI formula that came with explicit warnings not to use it
• Which they’re now using to launch trade wars 
• against: 

• Penguins
• Our own military
• And presumably Santa’s Workshop (someone check for a North Pole entry)

"And while the penguins and military base make for amusing examples of this policy’s incompetence, the real damage will come from applying this same backwards logic to basically all of our actual trading partners — countries whose goods and services make American lives better and whose economic relationships we’ve spent decades building. And who, historically, welcomed back American goods and services as well. All of that is now at risk because someone couldn’t be bothered to learn what a trade deficit actually is. And the American electorate deciding that’s who we wanted to govern the country.
     "When your trade policy is so fundamentally misguided that you’re declaring economic war on flightless birds and your own armed forces, perhaps it’s time to admit that the 5th grader from the beginning of this story wasn’t just smarter than the administration — they were dramatically overqualified for Trump’s Council of Economic Advisers."

~ Mike Masnick from his article 'Trump Declares A Trade War On Uninhabited Islands, US Military, And Economic Logic'