From Bloomberg:
“This is going to be much bigger than Smoot-Hawley,” says Douglas Irwin, an economic historian at Dartmouth College, who points to both the expected leap in tariff rates and the amount of trade covered as likely to eclipse what happened in 1930. “Imports are a much greater share of GDP now than they were back in the early 1930s by a long shot.” Imports of goods and services are 14% of US gross domestic product — about triple the share they accounted for in 1930.
A picture of effective tariff rates, now and prospective, from the same article.
Off topic – elections have consequences:
https://thehill.com/homenews/house/5226248-house-cancels-votes-gop-rebellion/
So much attention has been given to the largely anti-democratic and unconstitutional actions of the felon-in-chief that the weakness of the Republican Congressional majority has been neglected in the press.
Today, one bit of misogyny on the part if House leadership resulted in a tail-between-the-legs cancelation of House votes for the rest of this week. House leaders efforts to torpedo a bipartisan procedural change allowing new parents to vote by proxy in the House failed, and now they are running scared. At the same time, two other partisan GOP power grabs were also derailed:
“The vote also blocked planned votes on GOP priorities to limit the power of federal judges and to require proof of citizenship to vote.”
Republicans have only the thinnest of margins in either Congressional chamber. It is a disgusting bit of arrogance for such a thin majority to ignore the wishes of si large a share of the voting oublic. Today’s defeat brings into question much of the GOP leadership agenda, including a budget which will increase the deficit enormously. Tee hee.
Here is an example of “reciprocal tariffs” that does not raise prices for consumers.
https://x.com/StealthMedical1/status/1907171126754873567
Would the Europeans agree to this?
Bruce Hall: You apparently have no idea about what MFN status means, as well as well as what FTAs do and don’t do. For pete’s sake, please read a textbook.
Bruce, do you have any idea what EU tariffs are right now? They are quite tiny. There are lots of ways to measure tariff rates but the simplest is just total imports divided by total tariff revenue. EU tariffs on the US are about 1% of the total imports and US tariffs on the EU are about 1% of the total imports. So what you are proposing is pretty much already the case. Trump just likes to make stuff up about his grievances and people like you just gobble it up.
There are some exceptions within the total, primarily vehicles and agricultural products, but on the whole they don’t amount to much.
For example the EU has a 10% tariff on US imported cars. But the US has a 25% tariff on imported EU pickup trucks and SUVs, which also happens to be the biggest portion of US vehicle sales. So where is the unfairness in that? Seems that the EU is being taken advantage of, not the other way around that Trump whines about.
Bruce, it appears that trump and navarro really do think of supporters like you as idiots. They plan on raising $6 trillion dollars in tariffs over the next decade, and believe that idiots like you will not believe that is a tax raise, but actually a tax cut. I simply cannot fathom how much contempt triump and his people have for folks like you, bruce. To believe you are stooopid enough to honestly believe these tariffs are not taxes? They are counting on your stooopidity. Bruce, you wont let trump down, will you?
Your link is to a mix of history, boosterism and ynsupported assertion. Naturally.
I assume you know that your link isn’t anything but propaganda, but maybe you don’t. Maybe you’ve bathed in partisanship for so long that propaganda seems like honest discourse. Either way, you got a mess on your hands with this one.
Oh, and what you meant to write was that reciprocal tariff REDUCTION lowers consumer costs. It’s the reduction that does the lowering, not the tariff nor the reciprocity.
The actual article describes how cutting tariffs improved trade.
Steve
UCLA’s Anderson School has issued a recession warning, reportedly the first time it has done so in the 85-year history of its forecasts:
https://www.anderson.ucla.edu/about/centers/ucla-anderson-forecast/recession-watch-2025
Goldman just raised its recession odds guess to 35%:
https://www.reuters.com/markets/us/goldman-sachs-expects-us-fed-deliver-three-rate-cuts-2025-2025-03-31/
JPM says the risk of recession is at 40%:
https://www.yahoo.com/news/j-p-morgan-economist-sees-072220872.html
Yardeni says 35%:
https://www.marketwatch.com/story/why-trump-turmoil-has-made-a-u-s-recession-much-more-likely-45be3d1a
Zandi at Moody’s says odds of a recession are at 40%. Summers says 50%.
The U.S. is in recession roughly 15% of the time, so all these estimates put the odds of recession at twice to over thrice the average risk of recession. Nearly all of them have raised their odds substantially, all in response to the felon-in-chief’s policies.
This isn’t a bunch of partisan whiners cheering for recession, as Brucie would like you to believe. These are professionals with a strong motive to avoid political bias.
I feel compelled to repeat Bill McBride observation that recession forecasting is a mug’s game. That’s likely why the Anderson School has never issued a recession warning… until now.
Has there every been a turnaround in U.S. economy that is comparable to this? It is entirely due to irresponsible and dingbat Trump policies – idiotic and harmful tariffs, constant policy uncertainty, cuts in Federal workforce (the senseless cuts at HHS will be the most harmful long-term), racist deportation of workers. Usually Republicans take several years before they cause a recession – this time – they did it in the first quarter.
Off topic, but still trade – Mexico’s interoceanic rail line just hauled its first cargo:
https://mexiconewsdaily.com/politics/mexico-alternative-panama-canal-monday-mananera-recap/
A great deal of the “reporting” about this event is aimed at stirring the pot on the Panama Canal and geopolitical rivalries and all that Oh, so exciting stuff, misses what Mexico is actually doing. This week’s shipment is the first fruits of a $7.5 billion infrastructure project in one of the poorest parts of Mexico. Not an effort to “disrupt the Panama Canal” or a snub to China or a snub to the felon-in-chief.
Anyhow, Mexico has big further plans for the corridor around the rail line, including more rail lines. Goods production and trade at the far end of the country from the northern industrial corridor. Oil is the big product in the region, so it would not be a big surprise to see refining and chemical plants developed here.
Mexico’s oil sector has always been problematic, but even a problematic oil sector can support value-added industry.
Markets are tanking tonight because of economic policy. But lets not just blame trump. Trade and tariffs actually are under the control of congress, who has delegated that authority to trump inspite of the constitution. These are republican tariffs tanking the economy, not just trump tariffs. Congress could stop trump if they wanted to. It is their constitutional right. They have chosen to destroy the us economy instead.
The felon-in-chief has spoken. Among the details is a baseline of at least 10% tariffs on (nearly) all imports. In Q4, the annualized pace of imports was $4.1 trillion. Assuming no decline in imports, and ignoring higher tariffs for China and Europe, exemptions for NAFTA goods and the treatment of metals and the like, that would amount to a $410 billion/year tax increase. That’s about 1.4% of GDP, which would be the fourth largest tax hike in U.S. history. The felon-in-chief claims tariffs will raise $600 billion per year, which would amount to 2% of GDP, the third largest and the largest ever outside of wartime.
Of course, nothing that large will happen. There will be a decline in imports, due to the income effect of the tax hike, if nothing else. The decline in imports will reduce the size of the tax increase. Should this tax hike induce a recession, imports would be further reduced, so further reducing the size of the tax hike.
Of course, that $410 billion to $600 billion increase in revenue would come in handy if the $500 billion reduction in revenue anticipated by the IRS due to its inability to pursue tax cheats comes to pass.
Here’s the White House fact sheet, for what it’s worth:
https://www.whitehouse.gov/fact-sheets/2025/04/fact-sheet-president-donald-j-trump-declares-national-emergency-to-increase-our-competitive-edge-protect-our-sovereignty-and-strengthen-our-national-and-economic-security/