America enters the Find Out phase
Trump's global tariff plan is finally here, and it's loopier than anyone imagined
When governments are about to make a major policy announcement, they usually hold something called a technical briefing.
Media types are invited to the briefing, where the particulars are explained under a publication embargo, and various communications officials and policy eggheads are there to answer questions. These are tremendously helpful, and they allow the journalists to get a correct understanding of the policy so that their resulting coverage is accurate once the details are publicly announced. It works for everyone.
It will not surprise you to learn that the government of Donald Trump does not act like this. I watched with morbid fascination on Wednesday afternoon as Trump’s massive tariff plan was unveiled and the reporters covering the event struggled to explain what the shit was even happening. Even the basics of the policy were hard to figure out. There was Trump, holding large signs that listed countries around the world and their “tariff rates” on the United States and the “reciprocal” tariff rates that Trump is imposing, and reporters were taking photos and trying to zoom in on the bloody signs to find out the various rates.
It quickly became clear that the rates were absolute bloody nonsense. Instead of being based on actual tariff rates — say, Vietnam charges a 10% tariff on U.S. imports, so the U.S. is now charging 10% on Vietnamese imports in response — they appeared to be vastly higher in many cases, sometimes 10 or 20 times what a given country might impose on imports. Journalists, economists and other experts tried to figure out in real time how the Trump administration came up with these numbers. Were they based on anything? Completely made up? Keep in mind here that the whole point of “reciprocal” tariffs is that they are responding to something. Thus the name.
Soon, enough, some smart people cracked the code. One was, literally, a guy from Texas who was Googling trade data while sitting in a grocery-store parking lot. The formula: Take a country’s trade surplus with the United States in billions of dollars, divide it by the amount of stuff it exports to the U.S., and you get a number.
So, Vietnam again: It exported about $135-billion to the U.S. last year, and imports very little ($13-billion), so it has a trade surplus with the States of $122-billion. 122/135 is about 90%. This would be an insane tariff rate, so Trump’s people decided to take all of these numbers for each country and just divide them by half. For apparently no other reason than they would be less alarming. Vietnam, therefore, is now being tariffed at the still-insane rate of 45%.
Let us pause here for a minute. Why does Vietnam have a large trade surplus with the United States? Because the country is desperately poor, and they produce a lot of stuff with extremely cheap labour. Americans buy that stuff. This is not, to use Trump’s phrasing, Vietnam “ripping off” the United States. It’s Vietnam producing stuff at cut-rate prices so that Americans pay less for it in the end. Sorry to yell, but EVERYONE KNOWS THIS. Those of us in the Western world long ago made peace with the fact that some poor countries will make everything from t-shirts to smartphones for our benefit, and as long as you don’t think too hard about what the factory conditions are like in Bangkok, it works out for everyone. The alternative would be that Old Navy makes t-shirts for $30 a pop in Boise instead of $3 in Bangkok, and Americans would pay the difference in the end.
The point is, none of these tariff rates were developed with any thought toward whether the trade imbalance with any particular country was one that the United States should actually want to reduce. Here’s a hypothetical: let’s say that Canada tariffed the shit out of U.S. wine imports, specifically so that Canada could grow its own domestic wine industry. America might reasonably say: fuck those guys, big tariffs on all Canadian wine imports. It would be lose-lose, but at least there would be some logic to it. But America is doing none of that. It’s just slapping tariffs everywhere because Trump, as far as anyone can tell, seems to think that the United States should have the exact same amount of imports and exports with every other country in the world.
Which of course makes no goddamn sense. Some countries will sell America things like coffee and bananas that they have in abundance and — this part is key — not be able to buy an equivalent amount because American goods are too expensive for them. Trump is literally punishing countries for selling things to Americans. What is the long-term play here? Does he honestly think that the United States should produce every single thing it consumes, from crops to cars to clothes to avocados?
Which is, of course, the other problem: no one still, after months of tariff talk, has any idea what Trump actually wants to accomplish here. This is a paragraph from The New York Times on Wednesday:
That is, you will note, three separate possible reasons for the policy. Add in the bullshit about fentanyl and immigration as his justification for tariffs on Canada and Mexico, and that’s four reasons. A prelude to annexation? That’s five. All of which makes it impossible for anyone to figure out what to do in response.
Most importantly, the two most likely goals — to move manufacturing back to America and to raise money for internal spending — are mutually exclusive. If U.S. imports of foreign goods decline, less tariff revenue will be collected. This is just math.
But if the policy appeared half-assed at the time of Trump’s announcement, it turned out to be much less assed than that. The list of “countries” that were hit with tariffs includes an Antarctic island inhabited only by penguins, an island in the Indian Ocean that is home only to a U.S.-UK military base, and various protectorates and semi-nations. Someone in the Trump admin clearly just copy-and-pasted a list from something like the CIA World Factbook. Moreover, some of the internet sleuths who cracked the tariff code figured out that it was most likely developed by asking ChatGPT or some other AI tool to determine appropriate tariff rates for foreign countries. Great job, everyone.
And in the end, that’s why the Trump administration couldn’t host a technical briefing before the policy was announced: because if they had given anyone any time to look under the hood, these many problems would have been reported as Trump was making his ridiculous speech in the Rose Garden. “Trump announces reciprocal tariff plan based on nonsensical formula that has nothing to do with tariff rates,” something like that. Instead, everyone just has to report his blather and it takes some time to figure out what is actually happening.
It is a perfectly crazy way to run a country.