Dem
47
GOP
53
It is August 1; any nation (or island full of penguins) that has not reached an updated trade deal with the Donald Trump administration by today is supposed to be subject to increased tariff rates, of at least 15%.
To that end, Trump signed a series of executive orders imposing tariffs ranging from 15% all the way up to 41%. It is hard to know exactly where the administration gets its numbers from—maybe AI—but the list of countries that will get hit the hardest is an eclectic one, and includes Syria, Myanmar, Laos, Iraq, Switzerland and Canada.
There are a number of caveats here, however:
In addition, Trump announced that the Philippines, Vietnam, Indonesia and South Korea have all agreed to "trade frameworks." The first three nations on that list will be subject to 19%-20% duties, while the Koreans will be subject to 15% duties. South Korea also agreed to invest $350 billion in the United States, allegedly in whatever manner Trump instructs, and also to purchase $100 billion in American liquefied natural gas. We assume that $450 billion in investments is about as solid as the $500 billion promised by Japan, or the $1.35 trillion promised by the E.U.
So, Trump didn't chicken out, exactly, but he also didn't NOT chicken out. We'll have to wait until next Thursday to see if another last-second reprieve is forthcoming. If not, then we'll get to watch what the stock and bond markets do over the next week or two, to see if Trump actually stays the course.
The various trade-related announcements were accompanied by two different forms of braggadocio from the Trump administration, particularly White House Press Secretary Karoline Leavitt. Knowing well that Trump loves to be seen as a figure of towering importance, Leavitt boasted that the administration is collecting tariff revenue at a record-breaking rate, with over $150 billion in receipts so far.
Now, think about that for a moment. Can you imagine any president, of any party, bragging that, for example, "The IRS has collected more income taxes from middle-class Americans this year than ever before, with over $150 billion since the start of the year!" Of course not, because taxation is pretty much the least popular governmental function, and nobody likes to think they are paying more than years (or generations) past.
It could not be more obvious that the Democrats will need to do a bit of civics education, and to get the (absolutely true) message out there that tariffs are a tax on American consumers, and NOT on foreign nations. This will be made rather easier if the impact of the tariffs is visible at the gas pump, the grocery store, the local Walmart, etc. "The Trump administration is taking money out of YOUR pocket at a record pace," a Democratic candidate for Congress might say. "And not only are they doing it, they bragged about how effectively they are doing it!"
Meanwhile, the other braggadocio came in the form of renewed calls for Trump to be awarded at least one, and ideally two, Nobel prizes. Leavitt first decreed that because Trump has "brokered, on average, about one peace deal or ceasefire per month during his six months in office," the time has come for him to receive a Nobel Peace Prize. She even listed them: Thailand and Cambodia, Israel and Iran, Rwanda and the Democratic Republic of the Congo, India and Pakistan, Serbia and Kosovo, and Egypt and Ethiopia. To get to six requires adopting a VERY loose definition of "peace deal." It also means giving Trump credit for some agreements, like the one between India and Pakistan, where the participating nations insist the President had nothing to do with the process. Meanwhile, Trump has not lived up to his promise to end the wars in Ukraine and Gaza, which have actually gotten worse during his time in office. So, he probably should not be waiting for a phone call from Oslo anytime soon.
The other Nobel that Trump is apparently entitled to is the... Nobel Memorial Prize for Economics. Leading the charge here is U.S. Trade Representative Peter Navarro, who decreed: "I'm thinking that, since he's basically taught the world trade economics, he might be up for the Nobel in economics." One can only hope that a guy who has a lot of influence over trade policy was just kissing up, and doesn't actually think this. First, Trump has not taught the world anything about trade economics, except maybe what not to do. Second, the Nobel for Economics is not the Nobel Peace Prize but for money-related stuff. It's a research award, much more in line with the Nobels for chemistry, physics and physiology.
Note that we give this much attention to the braggadocio because it's just more evidence that all this trade war stuff is not about economics, it's about PR, and "winning" news cycles. And we can very clearly see the plan for winning today's news cycle, and maybe tomorrow's, and maybe even next Thursday's. We still haven't figured out how Trump can possibly believe that harsher-than-Smoot-Hawley tariff rates can work out for him, long-term. Unless, of course, he's going to grant another postponement. And another. And another.
There is one other bit of news on the tariff front. Yesterday, the case that argues that Trump has no authority to impose these tariffs was heard by an en banc panel of the entire Federal Circuit Court of Appeals. And it was pretty clear that all the judges (eight Democratic appointees, three Republican appointees, and zero Trump appointees) are skeptical that Trump is acting within his lawful authority here. He is going to lose, and it might well be 11-0.
At that point, there will be an appeal to the Supreme Court. When that happens, there are really three questions. First, will SCOTUS take the case? Second, if they do, how will they rule? Third, if and when they rule, what ruling does Trump actually want? If SCOTUS declines the case, or if it takes the case and says he's overstepped his bounds, that might actually be his "out." He could rant and rave about the evil judges, and how they won't let him put "America First" via tariffs, and so give the base lots and lots of red meat... without actually bearing the costs of the tariffs.
We admit that we do not think it likely that Trump is actually hoping for the courts to bail him out. But we at least consider the possibility, because we're having such a hard time accepting that he, even with his less-than-keen grasp of macroeconomics and international trade, can't see the enormous risk he's taking with this trade war, and, along with that, the high likelihood of devastating downsides for him and his party. (Z)