Macroeconomics is the kryptonite of Trump's Reciprocal Tariff Plan. The proposal is laced with a disdain for facts, ignorance of history, and blames others for problems of America's own making.
“…the recently incarcerated Peter Navarro…”. Who is working for a recently convicted felon who has assembled a clown car or is it a prison cell of the bottom of the barrel scum. Most of these losers including Trump himself couldn’t get hired as a greeter at WalMart
If I had a penny for the number of analysts who continue to view tariffs from simply the perspective of trade, I'd be a rich man. Tariffs are more importantly about capital flows. You complain about low savings and correctly point out that the biggest driver is government deficits. We'll see how much Trump can cut but you should consider deregulation too and it's impact of domestic savings. Secondly, it's an incomplete analysis if you're not willing to consider tariffs as a tool of negotiation and view tariffs not simply from the perspective of the US but also from that of other countries. I have argued in my posts that reciprocal tariffs will result in globally lower tariffs, not higher. Finally, nothing ever works linearly and you should consider the impact of both the rising dollar and deficit positions of other countries to realize what the equilibrium solution might be. It may never be reached but at least you'll know where the information asymmetries lie.
Thanks for the feedback. With Trump, anything is possible. Hard to know what comes next. My strongest conviction is that he doesn’t know what comes next either. A stretch to look at tariff impacts as more about capital flows than trade.
I have said this for years, but you say it so much better than I. Getting the MAGA crowd to grasp the overwhelming, inescapable consequences of insufficient domestic savings (especially in the context of a full-employment economy) is a tall order. I am not optimistic. Thank you an excellent piece.
It is important to get this message to MAGA base on the channels and with the language they would understand.
1) never mention “tariffs “. Should always be “import taxes paid by US importers and passed onto consumers”.
2) People should be encouraged to go in WalMart, Target, CostCo and their own home and garage to understand how much they consume that is imported.
3) the purpose of these import taxes is to pay for corporate and rich people’s tax cuts. Extending the Trump tax cuts.
4) Tax cuts do not pay for themselves and only increase the deficit as Reagan, HW, W and Trump have proven. HW ran away from his infamous “Read My Lips…” pledge because Reagan had increased the deficit about 500%.
5) Also can point out that in January 2020, after Clinton had a budget surplus for three years, the non-partisan CBO forecast that the US would be “debt-free”, zero national debt inside of ten years. So what was “W” response? Cut taxes twice and massively increase the deficit.
7) We are rutting and hollowing out our critical government services including our Military just to rich people’s a tax cuts they don’t need. So MAGA populists are paying more so the oligarchs like Musk, Soros, et al can make even more money.
8) Elon is 53, his life expectancy (before counting his drug use) is about 88 so he has 35 years left or 22,775 days left in this life. To spend about 1/3 of his $300 billion wealth or $100 billion he has to spend $7.8 million every day for the next 35 years. Really? Seriously? This guy needs a tax cut? Certainly NOT!
9) Trump speaks to MAGA at a fourth grade level about equal to 9-10 year old.
So you / we have to bring economic principles down to that level in order to meet his supporters where they are and get through to them. Trump says he loves the uneducated, and it’s obvious why. He is the ultimate elitist who goes to UFC, NASCAR and football to meet his supporters where they are. To win this battle we need to explain these policies and the lies they represent in the language that MAGA understands.
10) There is a reason his administration has 20 or so on air personalities from Fox, because they know how to deliver a message to their audience.
Agree that communication is key. Yet surveys show that in a polarized nation, one side doesn't read or watch what the other side writes or says. Still, a challebge worth taking seriously.
Thanks for another excellent article. But I do have a beef.
President Trump’s « reciprocal » tariff policy makes no sense, but at least it is a proper use of the English language.
Namely , that policy of “reciprocity” consists in applying to each foreign country’s goods the same rate of duty as that country applies on its imports of equivalent American goods.
But, according to the sense in which President Trump uses the word “reciprocity”, it is not the focal point of the GATT and subsequent agreements, which instead record “mutual concessions”, that are not necessarily “reciprocal”.
The point is important because President Trump charges other countries with violations of “reciprocity” to make his trade war sound legal, when in actuality “reciprocity” is not even an obligation under the GATT.
Accepting President Trump’s vocabulary is already a major and prejudicial concession.
“…the recently incarcerated Peter Navarro…”. Who is working for a recently convicted felon who has assembled a clown car or is it a prison cell of the bottom of the barrel scum. Most of these losers including Trump himself couldn’t get hired as a greeter at WalMart
From your lips to MAGA’s ears…
If I had a penny for the number of analysts who continue to view tariffs from simply the perspective of trade, I'd be a rich man. Tariffs are more importantly about capital flows. You complain about low savings and correctly point out that the biggest driver is government deficits. We'll see how much Trump can cut but you should consider deregulation too and it's impact of domestic savings. Secondly, it's an incomplete analysis if you're not willing to consider tariffs as a tool of negotiation and view tariffs not simply from the perspective of the US but also from that of other countries. I have argued in my posts that reciprocal tariffs will result in globally lower tariffs, not higher. Finally, nothing ever works linearly and you should consider the impact of both the rising dollar and deficit positions of other countries to realize what the equilibrium solution might be. It may never be reached but at least you'll know where the information asymmetries lie.
Thanks for the feedback. With Trump, anything is possible. Hard to know what comes next. My strongest conviction is that he doesn’t know what comes next either. A stretch to look at tariff impacts as more about capital flows than trade.
Well your old friends in the street are drinking the kool aid are they not? Need more truth telling. Before it is too late.
I have said this for years, but you say it so much better than I. Getting the MAGA crowd to grasp the overwhelming, inescapable consequences of insufficient domestic savings (especially in the context of a full-employment economy) is a tall order. I am not optimistic. Thank you an excellent piece.
Steve -
It is important to get this message to MAGA base on the channels and with the language they would understand.
1) never mention “tariffs “. Should always be “import taxes paid by US importers and passed onto consumers”.
2) People should be encouraged to go in WalMart, Target, CostCo and their own home and garage to understand how much they consume that is imported.
3) the purpose of these import taxes is to pay for corporate and rich people’s tax cuts. Extending the Trump tax cuts.
4) Tax cuts do not pay for themselves and only increase the deficit as Reagan, HW, W and Trump have proven. HW ran away from his infamous “Read My Lips…” pledge because Reagan had increased the deficit about 500%.
5) Also can point out that in January 2020, after Clinton had a budget surplus for three years, the non-partisan CBO forecast that the US would be “debt-free”, zero national debt inside of ten years. So what was “W” response? Cut taxes twice and massively increase the deficit.
7) We are rutting and hollowing out our critical government services including our Military just to rich people’s a tax cuts they don’t need. So MAGA populists are paying more so the oligarchs like Musk, Soros, et al can make even more money.
8) Elon is 53, his life expectancy (before counting his drug use) is about 88 so he has 35 years left or 22,775 days left in this life. To spend about 1/3 of his $300 billion wealth or $100 billion he has to spend $7.8 million every day for the next 35 years. Really? Seriously? This guy needs a tax cut? Certainly NOT!
9) Trump speaks to MAGA at a fourth grade level about equal to 9-10 year old.
https://www.newsweek.com/trump-fire-and-fury-smart-genius-obama-774169
So you / we have to bring economic principles down to that level in order to meet his supporters where they are and get through to them. Trump says he loves the uneducated, and it’s obvious why. He is the ultimate elitist who goes to UFC, NASCAR and football to meet his supporters where they are. To win this battle we need to explain these policies and the lies they represent in the language that MAGA understands.
10) There is a reason his administration has 20 or so on air personalities from Fox, because they know how to deliver a message to their audience.
Agree that communication is key. Yet surveys show that in a polarized nation, one side doesn't read or watch what the other side writes or says. Still, a challebge worth taking seriously.
Thanks for another excellent article. But I do have a beef.
President Trump’s « reciprocal » tariff policy makes no sense, but at least it is a proper use of the English language.
Namely , that policy of “reciprocity” consists in applying to each foreign country’s goods the same rate of duty as that country applies on its imports of equivalent American goods.
But, according to the sense in which President Trump uses the word “reciprocity”, it is not the focal point of the GATT and subsequent agreements, which instead record “mutual concessions”, that are not necessarily “reciprocal”.
The point is important because President Trump charges other countries with violations of “reciprocity” to make his trade war sound legal, when in actuality “reciprocity” is not even an obligation under the GATT.
Accepting President Trump’s vocabulary is already a major and prejudicial concession.