Let's Take a Trip to Stupidland

Let’s start with the stupid math used to calculate the “reciprocal” tariffs that Trump announced today. Take the amount that we import from a country, divide it by the amount we export to that country, and that is the “tariff” that the country charges us.

Yep, it’s that dumb. It has nothing to do with the actual tariffs, if any, charged by the country.

So, if a country sends $10 billion worth of goods to the US, and we send $5 billion back to them, the “tariff” is the trade deficit ($5 billion) divided by their exports ($5b/$10b) = 50%. But Trump is being nice, so it’s only 25% (the “discounted reciprocal tariff”). Here’s the full list of tariffs so you can see the rate at which your Falkland Islands purchases are going to be taxed (41%).

The exceptions are Canada and Mexico, which are going to get 25% tariffs on the non-US parts of their autos and probably some other goods, which I’m not going to bother to puzzle out. Stellantis already announced a two-week closure of its plant in Windsor, Ontario in response.

There’s some freaking out on BlueSky, and people are telling us to stock up on goods that will almost certainly get more expensive. But how do you stock up on avocados and strawberries? How do you stock up on a new car that you were planning to buy in a couple of months?

The Senate passed a bill to rescind the Canadian tariffs, with the votes of McConnell, Collins, Murkowski and Rand Paul. I’m guessing Paul and McConnell are thinking about Kentucky whiskey, which will be murdered by targeted tariffs from Canada (not to mention Mexico and the EU). The bill won’t go anywhere, because Pastor Mike won’t put it on the House floor, and even if he did, and even if it passed, Trump would veto it.

So here we are. Stock futures have shit the bed: the Dow is down 2.7%, S&P 500 3.9% and Nasdaq 4.7%. People are being unkind to the masters of the universe who run our efficient markets, because they should have seen this coming, but Trump has always chickened out when it comes down to it, so I really don’t blame them too much. Plus, they’re clearly signaling to Trump to cut it out.

Will he? I don’t know, but I’m not going to overreact to this or spend much more time caring about it until a few days go by. Trump generally doesn’t have the courage of his convictions when he does something that’s unpopular, so we’ll see if he really sticks to this nonsense. There’s immense political utility in these tariffs taking focus away from Signalgate, the ridiculous RFK Jr HHS cuts, further food inflation, and Musk’s gutting of Social Security’s administrative capabilities. Since there’s such a long list of tariffs, expect Trump to treat other countries the way he treats prestige law firms in the US — he’ll try to exact some form of concession from each of them.

I’m not stocking up on anything — I might regret it, but, given Trump’s track record, I doubt that I will.