Trump's Going To Destroy America's Prosperity— What A Weird Decision!
- Howie Klein
- Apr 3
- 4 min read
I don’t think there’s a more subservient MAGAt in the Senate than Tommy Tuberville (R-AL). Yesterday, on the verge of Trump’s Liberation Day nonsense, he went on Fox & Friends to urge his skeptical colleagues to “give it a shot and see what happens.” One of those colleagues, Rand Paul, warned that “it’s a fallacy to think that it’ll help the country. Tariffs are a tax, and if you tax trade or if you tax anything, you’ll get less of it. We know by looking at the history of the last— at least 70 years or so in this country, that as international trade has increased, so has the prosperity of our country.” Later in the day, Paul joined the Democrats and 3 other Republicans to disallow Trump's "emergency" to justify his trade war against Canada.
Former Treasury Secretary Lawrence Summers painted a more detailed picture of where Trump’s tariff plans would lead the country. Yesterday, Chris Anstey warned we are looking at the imposition of “an oil crisis-like shock to the economy that shrinks its productive capacity— boosting both prices and unemployment. ‘This is the kind of thing you discuss in the way we would usually discuss an oil-price spike or earthquake or a drought, as a supply shock,’ Summers said on Bloomberg Television’s Wall Street Week with David Westin. The question is mostly how much damage is going to be done.’”
Summers spoke hours before Trump is scheduled to unveil so-called reciprocal tariffs against US trading partners. Those will add to the list of levies he’s already announced, including 25% duties on steel and aluminum imports, a cumulative 20% surtax on Chinese goods and up to 25% tariffs on a range of Canadian and Mexican products.
“These are very consequential economic policies,” with implications for foreign relations and national security as well, said Summers, a Harvard University professor and paid contributor to Bloomberg TV.
The “proximate” effect will be to boost prices, with effects then rippling out to include less employment and reduced investment, he said. “This is a classic supply shock” that puts the Federal Reserve “in a very difficult position.”
Summers cited past analysis of tariff increases in the first Trump administration that showed nearly a “dollar for dollar” impact on prices faced by US consumers.
The former Treasury chief, who served in a Clinton administration that struck trade deals with China and other countries and for a time threatened tariff hikes on Japan, also criticized Trump’s particular form of protectionism.
By imposing increased duties on steel and aluminum, the administration is raising the prices of vital inputs for industries that use those commodities, Summers noted. “You’re reducing the competitiveness of the producers” in that process.
“It’s not even good mercantalism,” Summers said of the Trump approach.
Trump’s crackpot new tariffs— higher than expected by economists— are 10% for around 100 countries. But some counties— mostly countries with developing economies in the Third World— are getting hit much, much harder. These are the ones Trump appears to be trying to cripple:
Cambodia- 49%
Vietnam- 46%
Sri Lanka- 44%
Bangladesh- 37%
Thailand- 36%
China- 34%
Taiwan- 32%
Indonesia- 32%
Switzerland- 31%
South Africa- 30%
Pakistan- 29%
India- 26%
South Korea- 25%
Japan- 24%
Malaysia- 24%
EU- 20%
Israel- 17%
Philippines- 17%
Scott Lincicome and Colin Grabow, trade experts at the Cato Institute, which promotes free markets, offered some historical perspective, noting that the justifications for them are flimsy and conflicting: “With today’s announcement, U.S. tariffs will approach levels not seen since the Smoot-Hawley Tariff Act of 1930, which incited a global trade war and deepened the Great Depression.”
After Trump’s Rose Garden speech, Paul Krugman wrote that “based on what he said, he’s gone full-on crazy. It’s not just that he appears to be imposing much higher tariffs than almost anyone expected. He’s also making false claims about our trading partners— not sure in this case whether they’re lies, because he may be truly ignorant— that will both enrage them and make it very hard to back down. Basically, he’s claiming that the rest of the world is placing very high tariffs on U.S. products, and that he’s imposing ‘reciprocal’ tariffs that are only half what they impose on us.” Trump is lying about the numbers— just pulled ‘em right out of hid ass.
“If you had any hopes that Trump would step back from the brink, this announcement, between the very high tariff rates and the complete falsehoods about what other countries do, should kill them.” The S&P 500 futures tumbled by 3%.
Yesterday a resolution passed in the Senate, 51-48, “terminating the national emergency declared to impose duties on articles imported from Canada.” 4 Republicans— Susan Collins, Lisa Murkowski, Mitch McConnell and Rand Paul— joined all the Democrats to pass it. The rest of the GOP is still in total ass-kissing mode. Still, Señor Trumpanzyy is flipping out... So is the stock market.
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