“For years, hard-working American citizens were forced to sit on the sidelines as other nations got rich and powerful,” Donald Trump declared late Wednesday, struggling with a giant piece of poster board while unveiling the administration’s “reciprocal tariffs.”
For once, a Trump White House did a pretty good job keeping the specifics a secret right up until the big rollout. And it’s a good thing because the specifics are pretty damn stupid, even considering the source. Read on.
No one was sure about the details until Trump, sounding every bit like a child presenting a baking soda-vinegar volcano at a school science fair, talked a small crowd gathered in the Rose Garden through a five-foot visual aid supplied by Howard Lutnick.
Trump could’ve just posted the chart online and been done with it, but everything has to be a show. The poster, which he was keen to note would’ve been even larger were it not for the wind, featured a list of countries, a column labeled “Tariffs charged to the USA” and a column called “USA discounted reciprocal tariffs.”
The idea was to suggest America’s actually being generous by not matching the highest rates charged on American products globally. In the lead up to what he dubbed “Liberation Day,” Trump repeatedly said he planned to adopt a relatively lenient approach.
I doubt markets will view the actual (and in some cases extra) levies as forgiving, though. They’re quite high on some nations, including an incremental 34% duty on China and taxes approaching 50% on Vietnam, Cambodia, Sri Lanka and Laos, which I suppose count as nations that’ve grown “rich and powerful” on the back of impoverished Americans. The EU will face a 20% tariff, Japan 24%, India 26%, Taiwan 32%, South Korea 25% and on and on as shown below.
In order to calculate the figures, Trump first rolled up other nations’ tariffs with “currency manipulation,” non-tariff barriers and “other forms of cheating,” as he put it, to derive a country-by-country metric for the rate at which the rest of the world taxes American products. Then Trump took half that rate (for the “worst offenders”) and called it “reciprocal.”
Or at least that’s what the public was led to believe initially. As it turns out, all Trump did was calculate a given nation’s surplus with the US as a share of its goods exports, then divide that by two.
While hammering out this piece in the minutes around Trump’s Rose Garden event, I asked, rhetorically, why he didn’t simply match the rates he calculated for other nations, this being about reciprocity and such. His excuse was that Americans are “a very kind people,” hence the magnanimity on display in the halved rates. My answer was, “because the original calculations probably don’t make any sense.” Suffice to say my instincts were correct.
“Undoubtedly, there will be public relations backlash for the simplified manner in which these tariff rates were created since no actual tariff was used in the calculation,” JonesTrading’s Mike O’Rourke remarked, somewhat dryly, late Wednesday evening.
Once you stop chuckling at the sheer artlessness on display in this grade school math exercise, allow yourself a fatalistic sigh: Because this isn’t going to bring back American manufacturing jobs. And it’s a flagrantly transparent attempt to offset the cost of extending the Trump tax cuts.
The new levies come on the heels of auto tariffs announced last week, and amid all sorts of confusion as to how much Canada and Mexico will ultimately pay, and on what.
In the first version of this article (again penned as a quick reaction piece while Trump was still carrying on at the White House), I advised readers against “thinking too hard about” the new levies, “because I can promise you Trump hasn’t.” That too was hilariously spot-on. Now we know the math walked straight out of the fifth grade.
The tariffs announced on Wednesday will come atop existing tariffs, at least for some countries. China, Scott Bessent said, will now face a 54% tariff. If you don’t think that’s going to impact some consumer prices well… just you wait.
Asked what advice he has for nations staring at Trump’s new levies, Bessent said, “As long as you don’t retaliate, this is the high end.” I’m not sure how he can say that confidently, given that the numbers involved in this elementary calculation can and will change, and not necessarily in the direction Trump wants. Those “rates” (i.e., what Trump’s calling “tariffs charged to the USA”) could rise in the “normal” course of commerce. If they do, it’s not obvious why the rate Trump’s charging shouldn’t rise too.
So, that’s “Liberation Day,” everybody. And it turned out to be even dumber than anyone imagined. “Free at last, free at last, thank God Almighty, we are free at last.”
Narrator: “This isn’t the end.”
Next comes a wonderfully cleansing and invigorating reset recession…
Also quick note on this, Taiwan was listed as a country on the tariff bulletin, so we may be getting diplomatic incidents and tariffs out of the same press conference. At least you can’t fault them in their efficiency in shattering norms…
He literally just blew up his own presidency and it’s now going to become amazing to watch
Can you believe what Biden just did? It’s his fault when this all goes to hell right?
Freedom’s just another word for nothin’ left to lose
Nothin’, don’t mean nothin’, honey, if it ain’t free, no no
Yeah, feelin’ good was easy, Lord, when he sang the blues
You know feelin’ good was good enough for me
Good enough for me and my Donny Trumpee
Well said John. It’s all getting more bizarre.
A 47% tariff on Madagascar, 37% on Botswana, and 21% against Cote d’ Ivoire? Some of their main exports include (respectively): vanilla beans, diamonds, and gold, in addition to agricultural products and some textiles. Why bother? An import tax on these may raise some revenue–or simply depress sales–but they will not bring jobs back to the U.S. You could say the same about several others on that list.
Lasciate ogni speranza.
Glad I bought our made in china robot vacuum cleaners already. Had to replace our house cleaning company which has gone out of business because most of their staff has left the country. And can’t find any ‘mericans who want to clean toilets for $15 an hour.
I may have to find a robot lawn mower because I am pretty sure my gardener is not coming back this spring. Can’t find a teenager willing to commit to save my life.
I can’t wait for all of those jobs to come back to America…wait…we are close to 50 year lows in the unemployment rate. This is amazingly stupid.
I’m still stuck on how exactly the ‘rip off’ is occurring and how this ‘plan’ reverses that course..
The methodology for the country-specific tariffs is even more nonsensical than you think. Trump took the trade deficit we have w/ each country, divided that by how much that country exports to us, and that’s the rate he claims we are being charged. So for example, if we have a $17.9 billion trade deficit w/ Indonesia, and they export $28 billion worth of stuff to us…. 17.9/28 = .64. So they claim Indonesia is charging us a 64% tariff. It’s asinine.
Yeah, some interns doing fine work there.
To make this more confusing, if you find the EO it has an Annex II that lists all the stuff that seems to be subject to the baseline 10% tariffs on everything from anywhere, but maybe (I mean, nothing is clear) ecapes the higher “reciprocal” tariffs (also called “ad valorem” in the EO).
https://www.whitehouse.gov/presidential-actions/2025/04/regulating-imports-with-a-reciprocal-tariff-to-rectify-trade-practices-that-contribute-to-large-and-persistent-annual-united-states-goods-trade-deficits/
https://www.whitehouse.gov/wp-content/uploads/2025/04/Annex-II.pdf
I mean, until Trump changes his mind.
Dear God. I’ve updated this article with the requisite jokes.
This is so unbelievably stupid. Even for Trump. Did they really think no one was going to notice how little effort they put in? And did Scott Bessent not say, “Guys, we can’t go with this. We gotta come up with something more scientific.”?
I’m starting to get the feeling that either Bessent
i) is so laser focused on bringing the 10Y yield down that he doesn’t care why it gets there, or
ii) just wants to stay in T’s good graces long enough to collect his Fed chairmanship, or
iii) isn’t actually that influential in Tworld.
I mean, he’s just another tariff fiasco away from getting the 10Y to a three handle
So what if the yield curve is more and more inverted, that don’t mean nuthin’
Bessent stammering into reporter’s mic today:
“Reporter: April 9th, these tariffs come in place. Do you plan on having negotiations before that date?
Bessnet: I-I-again, I’m not part of the negotiations. So you know, w–we’ll see.
Reporter: Canada and Mexico, notably missing on that chart. Why is that?
Bessent: Um. I’m not sure.”
It’s particularly galling that these super-confident masters of the universe kakistocrats now feel quite comfortable claiming they were out of the loop, had nothing to do with it, and don’t know anything about it. Finally, Trump is leading by example.
I just did the math. I am in absolute shock. Not that i don’t trust you H, i just couldn’t believe it’s that stupid. All i can say is WOW.
What makes it even worse is he is even hitting countries where the US has a trade surplus (i.e. Australia) with 10 percent. He hit Israel with 17% and they just cut their tariffs.
We are charging the Heard Islands (which have no humans on them but plenty of penguins) 10%. We hit Svalbard for christs sake with a 10% tariff and there isn’t a single subscriber that knows where that even is.
It’s next after Greenland.
Are you kidding? I know all about Svalbard! As I’m fond of telling people, the less useful it is to know something, the more likely I am to know it. For instance, did you know Svalbardian law requires people to always be armed?
It’s in case you need to defend yourself from a polar bear.
I thought the Dems were a circular firing squad. Donny and the MAGA folks just said, “hold my beer.”
“Donny you’re out of your element!”
He has no frame of reference, like a child who wanders into the middle of a movie.
WSJ
“President Trump’s 34% reciprocal tariff on Chinese imports as part of his sweeping trade action will effectively increase the average U.S. tariffs on Chinese goods to more than 70% when levies that predate Trump’s second term are figured in.”
I guess that is Trump I + Biden tariff, plus Trump II 20% tariff, plus Trump II 34% tariff.
(Unless you’re operating in the de minimis loophole, for as long as that remains open).
Obviously Chinese suppliers to US companies etc can’t absorb that in their prices.
You aren’t the only smartypants looking at this. In tune with your musings, the last couple of paragraphs add little clarity.
https://www.marketwatch.com/articles/china-trump-reciprocal-tariffs-conflicting-rate-0ef39c12?mod=home_ln
Yeah. You know what will really be a “pointless aside”? Debating whether the coming flood of inflation is “transitory”.
Forget all the noise and analysis, 4200 SPX and 3.5% bond coming by October. Just look at the charts.
Agreed. Sadly. Or not. Maybe a market crash, stagflation, recession is the price to pay to get rid of Trump/MAGA hold on power and psyches. To quote Lutnick, or Bessent, I’m not sure which of those sages said it: “it will be worth it”.
He was so proud of his diner placemat chart. It will become an oversized bookmark of a reminder of just how unserious this Administration is. I expect he will sign it and make Lutnick and Navarro grovel-off for it. But with tariff riches about to roll in, it’s a good thing we still have whatever DOGE left of the Customs Department, since it seems like they forgot all about setting up on the External Revenue Service we were promised we needed.
This is going to stop a lot of ordering and shipping in its tracks and cause a giant mess at the ports and warehouses, not to mention in the courts, as the supply chain sets upon itself arguing over contract provisions and cost sharing. But chin up everybody — once the shortages and price-gouging start (the pain), we might finally be taken seriously by the world’s incumbent autocrats (the gain).
Imagine Jack Nicholson popping up behind Trump and saying, “What if this is as good as it gets?”
I don’t really thing the global supply lines have been brought back to normal after covid and the Suez canal shutdown when that ship parked itself sideways for those weeks.
Now this trumptariffnuttiness will keep things uncertain and confusing for some amount of time. I suppose Buffett will buy a few cheap companies, the rest of us will suffer, and someday it will pass. Hope so.
Surely this can’t be true ,
“As it turns out, all Trump did was calculate a given nation’s surplus with the US as a share of its goods exports, then divide that by two”
I mean no way it’s possible to be this stupid.
This is dumber than the inject with bleach Covid ‘ fiasco
Trump’s first term finished in a fiasco. You re-elected him. Now, it will be a worse fiasco. Or so must we hope as the worse it gets, the sooner it will end.
Time for bessent, lutznick, and consort to hang portraits of Pence and Giuliani in their bedroom.
Looking ahead; given the childish simplistic calculations used to come up with the new tariff rates, what math will be used to negotiate changes. The world trade order has taken many decades to create and is extremely complex at the granular level. With uncertainty off the charts what company is willing to start building a new aluminum smelter in Cleveland? This feels like the Foxconn fiasco in Wisconsin during Trump 1 on steroids squared.
Canada trade with the rest of the world could takeoff, at least with their Make America Go Away hats.