Liberation Day

Donald Trump, who is by far the stupidest person to be president of the United States — an office once held by Warren Harding mind you — got it into his teeny tiny brain many years ago that the late 19th century was an economic golden age for America, and that the reason this was the case was because of tariffs and no federal income tax, the subsequent implementation of which caused the Great Depression. That’s the gist of the message he’s currently delivering to spellbound nation at this moment. He clearly has somehow gotten the idea lodged in his head that tariffs are taxes paid by other countries, that should replace the taxes paid by Americans.

These views are not shared by actual economists, but what do they know?

What a country.

. . . Krugman:

I guess it’s just possible that when we get details about the Trump tariffs they will be lower than what he just announced, but based on what he said, he’s gone full-on crazy. It’s not just that he appears to be imposing much higher tariffs than almost anyone expected. He’s also making false claims about our trading partners — not sure in this case whether they’re lies, because he may be truly ignorant — that will both enrage them and make it very hard to back down.

Basically, he’s claiming that the rest of the world is placing very high tariffs on U.S. products, and that he’s imposing “reciprocal” tariffs that are only half what they impose on us. Here’s the chart he showed:

The left column show the tariffs others are supposedly charging on US products — and it’s completely crazy. Focus on the European Union. The EU, like the United States, has generally low tariffs; the average tariff it charges on US goods is less than 3 percent.

So where does this 39 percent number come from? I have no idea. Many people speculated that Trump would count value-added taxes as tariffs, even though they aren’t — European producers selling to the EU market pay the same VAT as US producers, so it doesn’t discriminate and therefore isn’t protectionist. But even if you get that wrong, EU VAT rates are in the vicinity of 20 percent, so you still can’t get anywhere close to 39 percent.

You have to wonder whether Elon Musk’s Dunning-Kruger kids are now producing tariff numbers.

But you know that having once claimed that Europe charges tariffs more than 10 times as high as reality, Trump will never drop that claim. I don’t know how many people noticed, but he’s still claiming that we’re subsidizing Canada by $200 billion a year. Aside from the basic mistake of claiming that a Canadian trade surplus means that we’re somehow subsidizing Canada, he’s inflating the actual trade surplus by a factor of three. Many, many people have pointed out the error, but Trump is sticking with it, the same way Musk is sticking with the millions of dead Social Security beneficiaries thing.

If you had any hopes that Trump would step back from the brink, this announcement, between the very high tariff rates and the complete falsehoods about what other countries do, should kill them.

. . .

James Surowiecki: “Just figured out where these fake tariff rates come from. They didn’t actually calculate tariff rates + non-tariff barriers, as they say they did. Instead, for every country, they just took our trade deficit with that country and divided it by the country’s exports to us. So we have a $17.9 billion trade deficit with Indonesia. Its exports to us are $28 billion. $17.9/$28 = 64%, which Trump claims is the tariff rate Indonesia charges us. What extraordinary nonsense this is.”