"Liberation Day" Arrives, And I Can Think Of Two Things Wrong With That Name
It's not liberating, it's not going to last a day, but on the plus side, "we're all dead"
Well, there’s only one story today. It always strikes me as odd that the one policy area that Donald Trump has been the most consistent about in his entire history — tariffs — has also been the area where anti-tariff Republicans have been the least willing to take him on directly. Perhaps this is just one of those Rand Paul and Thomas Massie playing their hit song “Alone In My Principles” moments, where Republican politicians are legitimately concerned they can’t afford to be with the president only ninety percent of the time. Perhaps this is one of those Lucille Bluth “how much could one banana cost, no one knows” moments where we realize that most Washington politicians ignored all those AEI and Cato white papers because they believe they were elected to lead, not to read. But whatever this moment is, it’s a terribly risky one for the GOP. As I told Stuart Varney this moment on Fox Business, accompanied by an image of a sea of red, the political ramifications of this gamble require it to be a short term problem. Elections begin in earnest after August, and if Republicans are caught flat-footed on defending what the president has done here, they could be in for a sea change in the House and failing even in a very generous Senate map.
For now, their attitude is not projecting confidence. Quoth John Kennedy: 'In the long run, we're all dead.'
“In the long run, we’re all dead,” Sen. John Kennedy (R-Louisiana) told CNN’s chief congressional correspondent Manu Raju for The Lead With Jake Tapper. “Short run matters too. Nobody knows what the impact of these tariffs is going to be on the economy.”
Raju also caught up with Sen. Thom Tillis (R-NC), who added: “Anyone who says there may be a little bit of pain before we get things right, they didn’t talk about farmers who are one crop away from bankruptcy.”
Kennedy repeated his “we’re all dead” sentiment to Newsmax’s Rob Schmitt later in the day, adding: “We’re in uncharted waters and we don’t know. And anybody who tries to tell you that they know what the short-term impact is going to be is just lying. Either that or they’re selling deep stupid.”
Cue Liz Lemon: “We can worry about that later. Maybe we'll be dead by then.” Pete Hornberger: “Yeah. Wouldn't that be great?” Good joke, not a good political strategy. Anyway, here’s a bunch of stuff about this story:
“My advice to every country right now is do not retaliate,” he told Fox News shortly after the announcement. “Sit back, take it in, let’s see how it goes. Because if you retaliate, there will be escalation.”
“If you don’t retaliate, this is the high-water mark,” Bessent added.
JD Vance Acknowledges Short-Term Pain:
Vice President JD Vance said Thursday he isn’t going to “shy away” from the short-term pain the Trump administration’s sweeping “Liberation Day” tariffs could potentially have on Americans — but insisted the US needed a “big change.”
“We cannot keep going down the Joe Biden globalist pathway where we have $2 trillion of peacetime debt and deficits. We have manufacturing disappearing,” Vance told Fox News’ “Fox & Friends.” “That is not working for Americans. We’ve got to take this country in a different direction.”
“Yes, this is a big change. I’m not going to shy away from it, but we needed a big change,” he added.
“We know people are struggling, we’re fighting as quickly as we can to fix what was left to us but it’s not going to happen immediately,” he said.
“We really do believe that if we pursue the right deregulation, we pursue those energy cost-reducing policies, yes, people are going to see it in their pocketbook. They’re also going to benefit from the fact that foreign countries can’t take advantage of us anymore. That means their jobs are going to be more secure.”
WSJ: Trump Auto Tariffs and Car Prices
That will be an additional burden on household budgets. One common but rough financial guideline is that the monthly payment on an auto loan should be no more than 10% of one’s take-home pay. But even the average used-car payment is right around that threshold for an average American, and a new-car payment is already beyond it. If tariffs raise car prices according to going estimates, a new-car payment might eat up 15% of a monthly budget.
The 25% tariffs, which start getting collected Thursday, apply to foreign-made vehicles. Trump also plans to extend the tariffs to cover car parts, which stands to drive up the cost of repairs and insurance as well.
“People are at the brink of affordability,” said Jessica Caldwell, an analyst at Edmunds, an online car-shopping guide.
Some car shoppers say the tariffs are complicating their decisions at the dealership. Atlanta resident Mike Petchenik, a 45-year-old media consultant, intensified his search for a midsize SUV under $50,000 after learning about potential tariffs.
Looking to replace his aging 2009 Hyundai Santa Fe, Petchenik and his wife spent recent weekends test-driving and negotiating with dealers.
One salesperson texted him the day after he left a dealership, writing “with the impending tariffs, we know prices will start to increase.”
Despite the pressure, the Petcheniks are holding off as they wait for more clarity on what is to come. Other shoppers, meanwhile, have gone ahead with purchases to try to get ahead of potential price increases.
“Are there going to be 25% tariffs forever? Are there going to be 25% tariffs for three more weeks?” said Bronson Argyle, a finance professor at Brigham Young University. “That kind of uncertainty makes it very difficult for households to move forward.”
The Spectator: Weird Logic Behind Donald Trump’s Tariffs
They would restore manufacturing, force trade barriers to be taken down and allow new industries to be created. There have been various different explanations for why President Trump’s new tariff regime made sense. And yet when they were finally revealed on Wednesday one point was clear. There was no logic. The tariffs were just weird.
The big reveal turned out to be a board that flapped around in the wind outside the White House. Donald Trump marked Liberation Day by holding up a placard with a list of countries – each one with a number next to it. The White House has worked out the tariffs it estimates American goods face in each market, and then come up with a retaliatory tariff that it will impose in response.
The trouble is, none of it makes sense. The 67 percent figure for China’s tariffs seems oddly precise, and so does the 39 percent for the EU. Sure, both of them are protectionist blocs, but not to that extent. Further down the list, Vietnam is estimated to impose 90 percent tariffs, and will be hit with 46 percent tariffs in retaliation, while the far more protectionist India will only face 26 percent. It doesn’t follow any consistent pattern.
A lot of effort has already gone into trying to figure out what Trump was trying to achieve. The task, however, is impossible. Is he trying to stand up to China? If so, why impose tariffs at such a high rate on countries like Vietnam, Thailand and South Korea that are allies of the US in Asia? Surely the US should be trying to keep to them in its orbit? Is he trying to help American manufacturing? Then why exempt Canada from more tariffs? Does he plan to use the tariffs to force down protectionist barriers elsewhere? Possibly, but then why impose 17 percent on Israel, one of the most dynamic economies in the world?
The list goes on and on. The alarming reality is this. The new American tariff regime is just bizarre. It doesn’t have any logic to it, not does it have any consistency, nor any theory of what it is trying to achieve. It is just a random series of numbers that seem to have been plucked out of nowhere. It is chaotic. That is what is scaring the global markets – and rightly so.
WSJ: Trump’s Tariffs Aim to Create a New World Economic Order
The U.S. is moving to blow up the global trading order it built, ushering in an uncertain new era.
President Trump’s highly anticipated announcement Wednesday represents a high-stakes gamble to transform a global economic relationship that Trump for decades has said ripped off the U.S.—even as the American economy had emerged from the pandemic as the envy of its rich-world peers.
The president’s moves raise the specter of a stagflationary shock that increases prices while putting more economies, including the U.S., at risk of recession.
Trump stunned markets by announcing a suite of tariff hikes on major trading partners, including 20% for the European Union and 34% on China. The tax on imported goods, which also includes at least a 10% across-the-board increase on all countries, will raise overall weighted-average tariffs to 23%—the highest in over 100 years—from 10% before the announcement and 2.5% last year, according to JPMorgan Chase.
Economists said Trump’s policy shift, if it isn’t rolled back, could rival President Richard Nixon’s 1971 decision to overturn arrangements created by the U.S. and its wartime allies during World War II, when Washington had agreed to exchange dollars for gold at a rate of $35 an ounce.
It would mark “probably the biggest attempt to fundamentally reshape the tax-trade structure in the U.S. since Nixon took us off the gold standard in the early 1970s,” said Michael Gapen, chief U.S. economist at Morgan Stanley.
Gapen said his bank had been advising clients that markets were too complacent about the risks of bigger and broader tariffs, but Wednesday’s announcement “was more expansive than even we thought.”
Related:
The Spectator: Winners and Losers from Donald Trump’s Tariffs
The Spectator: Donald Trump Defends Tariff Calculations on Liberation Day
The Spectator: Why Tariffs Make Sense in a World of Predatory Mercantilism
Telegraph: Trump Wants US Jobs, But Could Plunge World into Recession
Semafor: World Reels, Markets Plummet After Trump’s Tariffs Unveiled
The Telegraph: Carmakers Prepare to Slash Production, Trump Tariffs
Feature
Racket News: Bloomberg’s Pathetic Swipe at Substack
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National Interest: Rethinking American Grand Strategy with Ionut Popescu
Domestic
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Tech
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Ephemera
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The Telegraph: Prince Harry’s Former Charity Under Investigation
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THR: Michael B. Jordan Teases Thomas Crown Affair
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Quote
“Some foreign nations seem alarmed at our increases of duties on imports. Such alarm is not justified. On the whole, the increases are moderate and generally intended only to equalize the difference between foreign and domestic costs of production. It ought to be remembered that following all the recent increases in tariff rates have come large increases in imports. The only exception was due apparently to the Spanish War, but a year later large increases began. For over a generation each protective tariff has changed the basis but enlarged the market for imports. Of course, some lines may have been injured and others compelled to come in on a rate more fair to United States standards of wages and living. This is not saying the new tariffs promoted or retarded the increases. But the fact is higher rates did not decrease the former imports. The most reasonable explanation seems to be that protection encouraged business and a more prosperous people bought more goods abroad. Instead of being disturbed at the tariff foreign nations should know that our general imports will be large so long as our business is good.”
— Calvin Coolidge