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.
Apparently, the US is not the MFN of any other country… if you believe the tariff rates on the chart that Trump displayed.
What is apparent is that several countries have already reduced their tariffs on imports of US goods and more will probably follow. This should be a good thing as the US then responds by reducing the new tariffs back to previous or even lower levels. That, of course, is one intended goal of all of this… greater volume of US exports. The beauty of it is the simplicity of the approach which is easy to understand and adapt to. Countries can choose to be protectionist with regard to US goods or they can choose to be free traders.
It’s doubtful that all tariffs suddenly go to zero (or 10%) and prices drop suddenly for consumers, but it is a new ball game.
• https://en.vietnamplus.vn/vietnam-cuts-import-taxes-on-key-goods-ahead-of-us-tariff-announcement-post312690.vnp
• https://www.msn.com/en-us/news/world/israel-canceling-all-tariffs-on-us-products/ar-AA1C5tzm
• https://www.reuters.com/markets/asia/thailand-may-see-hit-up-8-bln-us-tariffs-says-official-2025-04-02/
One should ask the basic question: why are tariffs so good for the rest of the world and so bad for the US? Free traders would argue tariffs are good for no nation, but then it appears that few if any nations are listening to free traders. So, Trump has established a baseline (minimum) 10% tariff on imports which a few countries also have for US goods.
https://seekingalpha.com/news/4428236-the-full-list-of-us-reciprocal-tariff-rates-and-the-countries-targeted
“If you want 0% tariffs,” make it in the U.S., Trump said. [that’s the real goal… investment and production in the US]
The U.S. will place a 34% tariff rate on goods from China, 46% rate on Vietnam, 49% on Cambodia, 25% on South Korea, 31% on Switzerland, 32% on Taiwan, 36% on Thailand, 20% on the European Union, 24% on Malaysia, 10% on the U.K. and Brazil and 24% for Japan.
“They do it to us, we do it to them,” he said, in explaining what reciprocal means. [simple and equitable … everyone likes equitable, right?]
https://seekingalpha.com/news/4428194-trump-announces-reciprocal-tariffs-25-auto-tariffs-start-at-midnight?feed_item_type=news
Is is unreasonable to expect a race to 10%?
“…if you believe the tariff rates on the chart that Trump displayed.”
Only an idiot would. A person would have to be completely ignorant of how trade operates in today’s world to believe the rates on that chart. A dope. Childish.
“Is is unreasonable to expect a race to 10%?”
Yes. Completely unreasonable.
“The beauty of it is the simplicity of the approach which is easy to understand and adapt to.”
Easy to adapt to? This is among the dumbest things ever written in comments here. Businesses will have to go through enormous stress and expense to adapt.
Brucie is simply saying the the felon-in-chief can do no wrong. It’s as if Brucie has joined a cult…because Brucie has, in fact, joined a cult.
As has been fully documented elsewhere, those numbers on Trump’s chart are not tariff rates. They are calculated by taking that country’s trade surplus in good only as a percentage of total trade. In other words, it’s a trade deficit, but a tariff rate.
So, no, no one should believe the tariff rates on that chart because they are made up.
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, do you have any idea what EU tariffs are right now?
I’ll have to go with what the White House published. I’m not going to independently research tariff rates by country. But according to this the EU tariff rates on US goods are not “tiny”. Perhaps there is a disconnect about what the meaning of “is” is.
https://seekingalpha.com/news/4428194-trump-announces-reciprocal-tariffs-25-auto-tariffs-start-at-midnight?feed_item_type=news
Don’t believe your own lying eyes.
You’ll “have to”? You’ll willfully ignore the facts, then come here and pretend to make statements about facts?
You’ve just admitted to being nothing more than a mouthpiece for the rapist-in-chief. A ditto-head. A hollow pipe. No ideas of your own. Good to see you being honest for once.
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?
Baffling, of course it is recognized as a tax… basically a consumption tax on imported goods. It is intended to be the lever that gets more goods produced here… either by other nations building production capacity here for US consumers or to lower the price of US goods for export to countries with high tariffs now.
Additionally, US companies are now beginning to commit to “reshoring”. That didn’t start with Trump, but it may accelerate under the new rules of the game.
“Baffling, of course it is recognized as a tax”
so bruce, you are ok with tax increases. noted. and it WILL increase costs. so you are ok with inflation as well. also noted. I will say, that is the exact opposite of what trump and maga ran on in the election. once again, bruce, trump has such contempt for fools like you that he EXPECTS you to run with these new goals of higher taxes and inflation, and defend them with your last breath. con men still exist today, because marks like bruce are still alive.
“It is intended to be the lever that gets more goods produced here”
bruce, alot of what you are tariffing is low quality goods imported from other nations because they have labor cheap enough to produce it. the reason it left the usa is because you cannot find enough low wage workers to produce much of this material (think clothing, toys). you cannot pay high wages for low quality products. and since you just kicked out many of the folks who will do this work (think agriculture workers), you will not reach your goals. supply shortages will occur for many materials, and prices will increase. inflation.
bruce, I am not against reshoring. in fact, that was what Biden was making progress on before trump gutted his programs out of spite. reshoring good paying jobs, not low paying jobs. but this tariff war is an exercise in futility. it is amateur in its execution, just like doge. and this morning, the markets are telling you exactly that by tanking. and probably will for multiple days. we have amateurs in the White House, bruce.
“…of course it is recognized as a tax…”
‘In an interview with Fox News Sunday, President Donald Trump’s senior counselor for trade and manufacturing said the president’s tariffs will amount to “the biggest tax cut in American history.”’
The passive construction – “is recognized” – is a tool for dishonesty. It leaves out the actor, the person doing the recognizing. Peter Navarro claimed tariffs to be a tax cut. Only after he was ridiculed for a couple of days did he switch to claiming tariffs are tax hikes AND tax cuts.
Brucie, it’s one thing for you to lie, but lying as obviously as you do – mere aping of ridiculous White House talking points – takes the challenge out of smacking you down.
Yes, this is a tax increase. The increase falls most heavily on those who spend most out of their income – the poor, those on fixed incomes. Next, we’ll here that this justifies tax cuts for the rich. Let’s see if Brucie tries to explain how great such tax cuts would be.
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.
Macroduck, I covered that in my other responses. But, yes, you go with reciprocity to “encourage” a reduction in tariff rates. You can beat each other with a stick or you can share the candy.
Yes, once we ridiculed your first comment, you tried to patch up your obvious error. In the process, you repeated a bunch of canned White House talking points which are complete nonsense. Just because you SAY the rest of the world will do what we demand and all will be dandy doesn’t mean it’s true. Far from it.
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/
Just a reminder of how things really work: the trade balance is driven by the savings balance. Here’s the picture:
https://fred.stlouisfed.org/graph/?g=1HctD
As the net savings balance falls, the trade balance turns increasingly negative. Each recession brings a temporary divergence, what with the influence of the rest on the world and of our marginal propensity to import being really high, but savings drives trade. Each tax cut has lowered national savings – Ricardo doesn’t live here any more. Easy access to credit for households has also probably lowered national savings. Perversely, the corporate sector, which in theory should be a net borrower, is the only net saving sector. But I digress.
If we want to reduce our trade deficit, the most straightforward policy is to reduce the federal deficit. To reduce the federal deficit without violating promises made to contributors to Social Security and Medicare, we need to stop spending nearly so much on the military and to raise taxes on those most able to pay them. Anyone with even passing familiarity with discretionary federal spending knows there isn’t enough meat there, let alone fat, to fix the budget deficit. Elon’s apes are a joke. DOGE is a joke. Tariffs are a joke. Net national savings is where all the action is. Period.
Oh, and S&P futures fell 3% in response to the felon-in-chief’s announcement. Apparently, the announcement turned out to be dumber than the central market expectation.
And just a point about “reciprocal” tariffs. Just because the felon says “reciprocal ” doesn’t mean that’s what he actually proposed. Reciprocal tariffs – the same tariff rate on every import from a certain country as that country imposes on a like good from the U.S. – is an administrative nightmare. It implies tens or hundreds of thousands of different tariff rates. What he actually described is a blanket, across-the-board(er) tariff, by country. So just like the Gulf of Mexico, the felon’s golf handicap and hand size, just because he says it doesn’t mean it’s true. Just the opposite.
Oh, this is hilarious. Everyone is baffled by Trump reciprocal tariff chart. Reciprocal tariffs are the rate on top of the baseline 10% tariff. For example, it shows the “Tariffs charged to the US” by the EU as 39%. This is crazy. Actual tariffs collected by the EU on US imports is about 1%.
Journalist James Surweicki seems to have cracked the code. The Trump geniuses have simply taken the trade deficit for each country and divided it by the total exports to the US from the same country and calls that the country’s tariff rate on the US.
For the EU, the trade deficit is $236 billion out of a total of $605 billion of exports to the US, divide and you get 39%. Divide that by 2 and you get a reciprocal tariff of 20%.
For example, trade deficit with China is $295 billion out of a total of $438 billion of exports to the US, divide and you get 67%. Divide that by 2 and you get a reciprocal tariff of 34%.
Yes, that is exactly how the reciprocal tariffs were calculated for each country — divide the excess exports to the US by total exports to the US and calling that the tariff charged by the offending country. And then they divide it by two for the reciprocal tariff, for some unknown reason.
Yes, this is absolutely crazy. I think I’m going take my total income and divide it by my social security number and this will be the income taxes I’ll pay. It makes the same sense.
Here is the reciprocal tariff chart where you can see the numbers from above.
https://www.cnbc.com/2025/04/02/trump-reciprocal-tariffs-countries-chart-imports-united-states.html
Competence matters – and the last thing you get when you hire people based on how deep and wet their Trump Ass kissing is would be competent professionals.
If you look way down on the tariff chart you see the Heard and McDonald Islands levied a reciprocal tax of 10%. These two tiny islands are over a thousand miles from anywhere in the Antarctic Ocean and have a population of exactly zero, except for a thousand or so penguins.
What does Trump have against penguins? Do they look better than he does in a tuxedo?
These people are nuts!
its simply more evidence the White House is run by a bunch of amateurs. you saw that with the doge experiment. you could have gotten any random economics undergraduate to run a better version of doge than the amateurs put out by the White House. but focus. this incompetence is not the trump brand. this is truly the republican brand. some will try to jump ship, but make sure every one of those fools is covered in the stench of this operation.
These idiots have slapped a tariff on Heard Island. Only one problem there are penguins but NO humans!!
yikes his chart says we impose a 10% tariff. We do not. We don’t have any. Are they saying our GST ( VAT) is a tariff?
They have also levied tariffs on norfolk island except that is part of our parlor so to speak
Smoot-hawley? isn’t that the approach that took an economic crisis and turned it into the great depression? this is the economic model that trump is mimicking? bruce, you do know how this ended the last time, don’t you? you think the economy will operate the exact opposite of what the EVIDENCE shows you happened last time we pulled this stunt? seriously, it is not a theoretical. it is empirical evidence. which you seem to be refuting. bruce, this is why trump is counting on idiots like you. you have a tremendous trait of ignoring reality. we already ran this experiment.