Trump Tariffs Collide with Economy

The threat of tariffs for un-tariff-related shit has already fucked with the global economy

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A cargo ship leaves Miami, FL, in circumstances that obviously have nothing to do with this story, but ya gotta have a thumbnail image so here ya go. (Photo by Ines Hegedus-Garcia / Creative Commons.)

In the big picture, it almost doesn’t matter whether former former Pres. Donald Trump rescinds or narrows some or all of the tariffs he threatened to impose today. Just filing a tariff flight plan through major commercial corridors has already disrupted global traffic and business in ways that will ripple for years.

As always with Trump, the real question is how long will it take for his supporters and voters on the sidelines to recognize what he’s done. And the answer to that, politically and popularly, appears to be now-ier than usual.

And, yes, he might back down yet again. And pretend he didn’t. He could order the tariffs but then withdraw them before they actually take effect. There’s some breathing room here.

His supporters no matter what will celebrate his genius negotiating skills, the subtle artistry of a father telling his kid to shut up or get a rap in the mouth.

But this time Trump said he doesn’t want anything in return. “We’re not looking for a concession,” he said Friday. Hell, Canada and Mexico aren’t even clear on wtf Trump wants. Which means there’s no way for him to be appeased. Nothing for him to actually win. Let’s review.

• Canada and Mexico. Trump said yesterday that he’s going to impose 25% tariffs on incoming goods from them today.

• China. Trump said yesterday that he’s going to impose 10% tariffs on incoming goods from China today.

Did he calculate any of those numbers? Based on trade flow or average factory/farm wages in those countries? My delicate Newsfuckers, he did not.

The roundness of Trump’s numbers advertises his willingness to eschew thinking.

The Possible Impact

New economic data on Friday suggested that inflation is already proving more stubborn than expected. Trump has less wiggle room to add tariffs to the stack of inflationary pressures.

Here’s former Trump advisor and Fox host Larry Kudlow: “You might see some one-off price increases for things, okay? But that’s all. They’re temporary.”

Kudlow’s explanation for how prices will come down? Because the Trump’s “entire” program is counter-inflationary. So until that kicks in, people can eat kudlow.

Trump has a different argument: His Trump1.0 tariffs didn’t drive inflation so these won’t either.

First of all, says who? Here’s Axios summarizing a study on Trump’s China tariffs — largely preserved by Pres. Joe Biden: “The Tax Foundation previously found that both Trump's and Biden's tariffs raised prices, reduced output, lowered employment and produced a ‘net negative impact on the U.S. economy.’”

Here’s the Wall Street Journal flying a Black Hawk full of facts into Trump’s attempt at reasoning:

“Trump’s four tranches of tariffs on Chinese goods in 2018-19 covered imports valued at roughly $360 billion at the time. New tariffs on Canada and Mexico plus additional tariffs on China would—if all items are subject to the action—cover imports valued at more than $1.3 trillion in 2023.”

And that’s not counting possible tariffs on all other places, such as Europe, Japan, Narnia, and Pellucidar.

In reality-land, Mexico is America’s biggest trading partner. That’s partly because U.S. manufacturers moved their plants there from China…because of Trump1.0’s tariffs.

An estimated $800 billion in goods crossed the border last year. And that’s just legal goods.

Mexican productivity actually benefits the U.S.: The Dallas Federal Reserve calculated that every 10% productivity increase in a Ciudad Juárez factory boosted employment in El Paso, TX, by 2.8%.

It’s not just that Mexico builds things and America buys them. The Canada, Mexico, U.S. supply chains are now so intertwined that, by one estimate, a single part may cross those borders six times before it ends up in its finished product. Tariffs and counter-tariffs could now, in theory, apply six times to that component by the time it ends up in whatever useless crappy piece of doomed plastic enshittified shit it’s destined for.

If Trump implements just some of the tariffs he’s promised at even a fraction of the levels he’s mentioned, he’ll have completed one end of the hose he’s building to funnel money from the least wealthy of us to the soon-to-be-more-most wealthy of us.

The less money you have, the more tariffs intersect your flight path. Everyone buys food, but the less money you have, the bigger a percentage of your total is spent on food. Which means raising the price of food takes a bigger share of your money than it does from rich people.

Where does that tariff money go? To the U.S. government. Which, if Republicans get their way, will then give it away to … rich people. The tax cuts Republicans enacted in Trump’s first term are the other blip on the radar here.

Those tax cuts were a massive giveaway to the rich. The less money you have, the less you pay in taxes, so the less you benefited from the cuts to those taxes. If you have massive amounts of money, however, even a low rate could mean you have to pay millions in taxes … which means renewing the Trump tax cuts will save the rich more millions.

As George Carlin said, it’s a club and you ain’t in it. In this case it’s a hose and you’re the sucker end of it. Tariffs are the tool sucking up your money.

And Republicans know this. Check out their quotes a little lower. They know full well what’s happening and they want to do it only as much as they can without you getting wise.

It’s not as if now American manufacturers will suddenly thrive because consumers will flock to their lower-priced goods. The point of tariffs is to create space for American manufacturers to raise their prices, stopping just short of losing their competitive advantage, but not a penny cheaper. That’s the whole point of tariffs.

And let’s talk about immigration. This week, Trump’s trade guy, Peter Navarro, told the New York Times that trade in corn fed fueled drove immigration. When NAFTA opened up Mexico to imported corn from the U.S., that meant corn-production layoffs in Mexico. And those jobless Mexican corn workers came here.

So what does MAGA think is gonna happen when Mexican factories start shutting down? (Assuming China doesn’t just swoop in, securing a beachhead from which to run its new deal operating the Panama Canal.)

But maybe we’re getting ahead of ourselves. Let’s look at prices. The nonpartisan Tax Foundation just released a new estimate that Trump’s tariffs will cost the average household $830 this year. On what, you ask?

The U.S. imports 700,000 barrels of crude oil from Mexico. Every day. Tariffing all that oil will jack up oil prices, especially diesel.

Mexican Economy Minister Marcelo Ebrard predicted price hikes on:

• Cars

• Computers

• Fruit

• Meat

• Beer

• Refrigerators

• TVs

• Vegetables

New cars could go up by about $3,000, on average, the Wall Street Journal reports.

And, sure, obviously some of this won’t matter. No one really eats vegetables¹. But some of those items Americans consume in mass quantities. So how are they gonna feel when their Dos Equis suddenly gets bumped up to Tres Equis?

And who’s this gonna hurt most? Mostly not blue states. Here’s Ebrard: “This impact will be greater in border states and cities that are big consumers of Mexican goods, like California, Texas, Florida and Arizona.”

Other products in the tariff crosshairs:

• Avocados

• Chocolate

• Sneakers

• Tee-shirts

• Toys

That’s right. Toys.

The Already Impact

Trump this week said the Washington midair crashes happened instantly. As opposed, one assumes, to the slow-motion crashes he’s apparently witnessed.

Well, in the current case of piloting his ego into the flight path of the U.S. and global economies, it’s already too late to turn aside. It’s already too late, as he put it in his sophisticated collision-avoidance advice for helicopters, to “go up or down.”

The shock wave has already hit. The simple fact that a president is willing to use tariffs as a tool outside of their intended use (to manage trade) has already forced thousands of businesses spending trillions of dollars to plan as if tariffs could be coming. Because maybe they are!

In the past, businesses could look at a trade issue, see an imbalance, anticipate corrective tariffs, and plan accordingly.

No mas.

Because now Trump has signaled that he’s capable of slapping tariffs on a country for utterly unrelated snubs and failures to curtsy. You won’t accept flights of deportees in degrading conditions? Tariff. You won’t compliment Trump’s oversized 1980s men’s wear? Tariff.

And so, because it could be anything, now literally every international transaction is wearing a big, fat, Trump-shaped hat of uncertainty. And that changes plans.

Meet Linda Hasenfratz, CEO of Canada’s Linamar, manufacturer of high-precision auto components, and a big critic of these hasenfratzin’ tariffs. She said that “if a significant tariff is imposed it’ll bring the industry to its knees.” That would be the U.S. auto industry.

So what’s she doing? She’s expanding to the tune of a $1 billion investment. In Canada.

Hell, Wall Street’s doing shit I don’t even understand to hedge against Trump’s tariffs shit. Traders are literally flying tons of gold and silver around the globe in unprecedented bets and/or hedging thereof on just how badly Trump has fucked us. Here’s a Bloomberg chart I know at least some of you crazy brainiac Newsfuckers will actually understand:

The Politics

The stock market tanked yesterday because of Trump’s tariffs.

It was up on the day and then White House Press Secretary Karoline Leavitt said Trump “will implement his tariffs tomorrow.” And then Wall Street bros made unexpected poo-poo.

Here’s my Google search for Trump and tariffs:

Another possible Trump loss here: Courts. It’s not even clear whether Trump has the legal authority to impose these tariffs without violating laws and/or treaties. Which means he could find himself losing yet again in court and spurring another flurry of headlines reading “Trump Loses in Court.”

Corporate America is lobbying feverishly against these tariffs. And, yes, that makes the edgelords tremble with ecstasy. But corporate America is who bankrolls both them and Trump.

If corporate execs lose more on Trump’s tariffs than they gain from his tax cuts, they’ll turn on him. Which, sure, the edgelords and Bannons say good riddance. Except that means the real MAGA money dries up.

And even if corporate execs lose less from his tariffs than they gain from his tax cuts they’ll turn on Trump anyway because the whole reason they’re rich is that they’re that greedy. Tax cuts can’t be enough to offset tariff losses because nothing is ever enough and no loss can be offset.

Unions, too, have been lobbying Trump not to murder them. United Steelworkers — the guys in hard hats we’ve been told all love Trump — are begging him not to fuck them the way he fucks women: To their detriment and against their will. Some 30,000 United Steelworkers members work at refineries that process Canadian oil.

The New York Times spoke to Iowa hog and corn farmer Bob Hemesath about the tariffs. The biggest customer for U.S. corn and hogs is Mexico, which is threatening retaliatory tariffs because duh. (Last year, Mexico bought $30 billion worth of U.S. agricultural exports².)

Tariffs, Hemesath says, “put an added cost on a product that doesn’t need to be there, and it’ll drive those countries to go look somewhere else.” I mean, South America is right there waiting, folks.

Does Hemesath see the connection between Trump and the imminent pain?

“It puts me as a farmer at an economic disadvantage … Although I understand wanting to use tariffs as a negotiating tool, what harm do you do?”

When I first read that, I thought it was safe to assume any Iowa farmer was Republican. But, what the hell, can’t hurt to check. Also, I wanted to see who he donated to. Because I’m an asshole like that.

Hemesath donated $3,250 to Rep. Ashley Hinson (R-IA), who said, “I believe tariffs should be a last resort,” but also said, “President Trump needs to have every tool in the toolbox” and also voted against the Prevent Tariff Abuse Act which would, well, that.

Hemesath donated $2,000 to Sen. Joni Ernst (R-IA), who says Trump is working to stop the flow of fentanyl.

My guess is Hemesath will feel the pain before Ernst and Hinson. But they’ll be close behind.

And what’s Trump going to say when Mexico’s retaliatory tariffs render U.S. cars unaffordable there? Because already a third of the cars bought in Mexico come from China.

The Reality

It will take some time for tariffs and the threat thereof to ripple through the economy. Many MAGA voters won’t see it coming in the producer price index or whatever. Some might not even see it the first month it hits their grocery bill. But they might eventually.

In the meantime, we have stuff like Sen. Cynthia Lummis (R-WY) telling Semafor that her state trusts Trump to do whatever it takes. They “kind of trust [Trump] about matters of trade, of tariffs and policies that are trying to get a handle on the size of government.”

And they understand, she suggested, that disruption brings pain. “Wyoming people want to see some eggs broken back here,” she said. Thing is, Wisconsin farmers produced 207 million eggs in November 2024. That was up from the previous November.

And not every GOP senator is hankering for omelets.

• Here’s Sen. Chuck Grassley (R-IA): “[T]he tactic is questionable … I hope he's successful.”

• Here’s Senate Majority Leader John Thune (R-SD): “across-the-board tariffs is not something I have been for in the past."

• Here’s Sen. John Wicker (R-MS): "[N]ot convinced that's the best approach."

• Here’s Sen. Jerry Moran (R-KS): “there are damning consequences to some sectors of the economy, particularly agriculture.”

• Here’s Sen. John Cornyn (R-TX): "[P]oblematic."

Some, like Sen. Mike Rounds (R-SD) tried to nudge Trump toward moderating, time-limiting, and/or surgically narrowing his tariffs — but signaled it’ll be a fuckup if he doesn’t:

“I know the president doesn’t want to drive up the price for fuel … That would be a serious problem if we just all of a sudden stopped heavy crude from coming into refiners in the United States. So I think they’ll be reasonable [as opposed to the other thing].”

Sen. Ron Johnson (R-WI), about as dependable a MAGA parrot as you can find, called tariffs “double-edged”:

“As much as Trump thinks it’s the most beautiful word in the world, he’s actually asked people to study it first. I hope he’s pretty thoughtful [despite him never having been that].”

Hell, Speaker Mike Johnson (R-LA) basically called Trump a fucking liar. Asked about the tariffs on entire countries that Trump has explicitly repeatedly vowed, Johnson said “I [know Trump’s a fucking liar so I] don't believe [anything that comes out of that fucking liar’s fucking lie pipe, including that] that will happen."

As is so often the case, Trump’s solutions are not merely inappropriate. They’re not just unlikely to fix things. He’s also entirely misunderstood the basic problem.

Tariffs are for addressing imbalances in specific types of trade. Your factory cuts environment corners producing cheap furniture, we slap a tariff on it to erase your economic advantage.

Trump is using tariffs to fight drugs. This isn’t out of the box, this is shitting in the box.

But also, Canada is the source of one (1) percent of the fentanyl that comes into America, and its border the site of one (1) percent of America’s illegal border crossings. On the Canadian border last year, Customs and Border Protection (CBP) seized 43 pounds of fentanyl.

Must be Mexico, then, right? Um, kinda? But no?

On the southwest border last year, CBP seized 21,148 pounds of fentanyl, “most from U.S. citizens coming through legal ports of entry,” the Wall Street Journal reported.

Trump’s slapping tariffs on Mexico…to prevent U.S. citizens from returning home?

Bottom Line

Free trade could’ve been a universal good.

Americans got cheaper products. Other countries got more money, building their middle classes, ramping up development and quality of life.

What went wrong is the same thing we’re doing wrong with automation and AI. We’re letting rich people hoard the benefits.

The steel mills and auto factories and textile whatevers that shut down could’ve been replaced by … let’s shoot for the fucking moon here … cool shit. With all the profits reaped from free trade, and from other corporate steroid shots, we could’ve retooled entire cities into anything we wanted. We could have provided enough jobs — that could only be done there, because that’s where we’re building our utopii — to provide good, honest labor for everyone who used to provide that to factories.

But also, we could’ve provided good, honest leisure. Maybe the hollowed-out cities could’ve got so much of that filthy awesome lucre that they implemented three-day workweeks. Why the fuck not?

I don’t wanna hear a single fucking self-styled patriot lecture me on why America is incapable of doing good things for its people.

All we had to do was return to 1950s tax rates and marry them with New Deal style work programs. If we could transform the country during The Great Fucking Depression do not tell me we couldn’t have done so during boom times.

Free trade isn’t the threat. Automation isn’t. AI isn’t. The myths and narratives that drive our choices are the threat.

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1. Just kidding, veggie eaters. Your secret is safe with me.

2. Or, y’know, imports…from the Mexican point of view. Which we’re still allowed to understand because it hasn’t been banned yet.