Trump’s ‘Liberation Day’ tariffs (UPDATE)

This is a short comment as we have no details.   These few words act at placeholder for now – details now filling in!

In Trump’s view, the United States is being “ripped off” by countries with higher tariff rates on US-made products or countries with which the US runs a trade deficit – that is, nations from which America imports more than it exports and the US owes more.

Here we have to remember Michael Hudson’s warning on The Squeeze, the balance of payments squeeze.  A simplistic explanation would be that countries that the US owes more money to in terms of trade, is part of the US debt.  This is perhaps the most significant reason for these tariffs.

Today should be revealing.  While many individual countries have prepared, and we have seen China, South Korea, and Japan beginning to work together, news from the US is that they are simply not ready.  I repeat my extension of Michael Hudson’s well known maxim:  Debt that cannot be paid will not be paid.  Trade that is not productive will not be done.   We will watch Michael Hudson and Richard Wolf to explain the details.

What Trump ultimately decides to announce on tariffs will be “effective immediately,” White House press secretary Karoline Leavitt said Tuesday. That is logistically very dubious.  Other nations have vowed countermeasures and could respond by immediate retaliatory tariffs, or, they may have prepared to simply not trade.

Will we have a trading system after today, or will it break today or very soon in the future.  Tariffs and the destabilization of trade routes plus war is induces more chaos.  Something has to give.

Update:  As DD says, some Tariff advertising.  So Trump does not like dead people but dead babies are fine.

Tariff Speech:

Here are some specifics:

Vehicles and parts have a 25% tariff
A base of 10% is charged on any new business.
There is confirmation that China’s tariff rate would be on top of the current 20% already in place says CNBC correspondent. Javers says WH Press Sec confirms, meaning total rate on China will be 54%.

China: 34%
EU: 20%
Japan: 24%

UK: 10%

South Korea: 25%

Thailand: 36%

Switzerland: 31%
Taiwan: 32%

Malaysia: 24%

Here are the hardest hit nations:

Iraq 39%

Mauritius 40%

Syria 41%

Falkland Islands 41%

Vietnam: 46%

Madagascar 47%

Laos 48%

Cambodia 49%

Lesotho 50%

Saint Pierre & Miquelon 50%

We noticed that Mexico and Canada are not on the list as US will continue to exempt USMCA-compliant goods.

The Loonie and the Peso rallied on the news…

Initially markets heard Trump’s comments as ‘better than expected’ and futures spiked on the news, but then as he showed the chart of specific tariffs, futures plunged…

“If you want your tariff rate to be zero, then you build your product right here in America, because there is no tariff if you build your plant, your product in America,” Trump said, concluding:

“Likewise to all of the foreign presidents, prime ministers, kings, queens, ambassadors and everyone else who will soon be calling to ask for exemptions from these tariffs, I say terminate your own tariffs, drop your barriers, don’t manipulate your currencies.”

Xinhua news was the first out from China with a very short piece, presented like a game:

🎮 Players: U.S. politicians

👉 Input: Reciprocal tariffs

🔄 Processing …

⚠ Output: Bureaucratic nightmare, inflation spike, trade chaos …

Funnies appearing fast: Heard Island and McDonald Islands on Trump’s list at 10% tariffs, but there’s an issue: the islands are UNINHABITED. It is Australian external territory only home to research stations and there are no permanent residents.