John Lowell (20:26)
All right, that is it for what the left and the right are saying. Which brings us to my take. So I have a theory about American journalists. That's me. And American news consumers. That's you. That applies in moments like this. We're all goldfish. I mean, no offense, but you, me, the whole lot of us, our mental hard drives are just at capacity from constantly consuming so much news that I think we genuinely struggle to remember the full picture, even for stories that started just a few weeks ago. But actually remembering recent events, it can be illuminating. Imagine that. So as I was thinking about how to make my point today, to illustrate that regardless of your opinions on tariffs as an economic tool, this rollout has been disorienting and unpredictable. It occurred to me. Would making a timeline help? I think it would help. The Peterson Institute for International Economics and the New York Times had put together a bunch of useful dates I pulled from both of their timelines of the trade war and what's been happening. And I tried to summarize them in a way that is maybe cohesive and a little bit engaging. And I want to give it a shot now on the podcast, if you'll bear with me, to just step back and remember what has happened over the last few months. So, On Inauguration Day, January 20, President Trump announced that he would levy 25% tariffs on Canada and Mexico that would take effect on February 1st. A few days later, Trump threatened tariffs on Colombia, whose president briefly said he would respond in kind before backing down, which drew cheers from the people, confident Trump could force our trading partners into submission across the globe. Trump, perhaps feeling emboldened, cited emergency presidential powers and then signed the 25% executive order on February 1, adding a 10% tariff on China. All three countries, China, Mexico, and Canada, retaliated with tariffs of their own. And the trade war was on, but then off. Two days later, Trump put a 30 day pause on his tariffs on Mexico and Canada. Four days after that, on February 7, Trump for the first time promised reciprocal tariffs on every country, an expression that would soon be fully in the public's lexicon, but did not reveal details of the plan. Plan On February 10, Trump announced a 25% tariff on all foreign steel and aluminum, resurrecting a policy from his first term. Over the next couple of weeks, Trump continued to threaten reciprocal tariffs and promised that his tariffs on China, Mexico and Canada would go into effect on March 4th. Then March 4th came and the tariffs went into effect. Canada responded with a 25% tariff on an estimated $155 billion of American imports. And the next day, the carve outs began. Trump, the day after a phone call with the heads of major US Automakers announced a one month exemption on car imports compliant with the United States Mexico, Canada trade agreement. On March 6, Trump paused most of the tariffs placed on Canada and Mexico again until Liberation Day on April 2, denied he was reacting to the market sell off, and promised again to impose 25% tariffs on imports of steel and aluminum. Then between March 6 and March 12, Canada and China retaliated. China imposed tariffs targeting US farm products, and Ontario Premier Doug Ford announced tariffs on electricity imported to the province from Michigan, Minnesota and New York. Trump called Canada's actions an abusive threat and then issued a threat of his own. He would double tariffs on Canada steel and aluminum. Both sides seemed to puff their chests out, yell a lot, and then blink and back down. The next day, the European Union slapped billions of dollars worth of retaliatory tariffs on U.S. goods, but said they would not enact them until April 1. Hoping to give the U.S. a chance to change course, Trump responded on March 13 by threatening a 200% charge on all alcoholic products like wine and champagne from the European Union. And now I was getting upset. He then threatened tariffs on Venezuelan oil on March 24, and then a blanket 25% tax on all cars and car parts shipped into the US including including from American brands that assemble their vehicles overseas on March 26th. And then we had a week of rumors, innuendo and signaling about what Trump was going to do if he'd really follow through on his Liberation Day promise. Finally, Liberation Day arrived. Freedom economic promise. On April 2, Trump put a 10% tariff on all remaining nations importing goods into the US that had not yet been tariffed. And using the emergency powers he'd leaned on throughout his series of pronunciations, he unveiled additional reciprocal tariffs that varied by nation. We covered Liberation Day in a previous podcast. It was pure chaos. Some of Trump's biggest boosters started criticizing him for the first time. Elon Musk went to war with Peter Navarro, Trump's trade advisor. Bills were introduced in Congress to try to stop him. The markets tanked. Bond yields fell. Questions started flying about how the administration even calculated the reciprocal tariffs and and the administration offered mixed and often mutually exclusive explanations for why it was doing what it was doing. Over the following week, some countries, like Vietnam and Bangladesh asked for pauses. China escalated, slapping more retaliatory tariffs on us. On April 9, Liberation Day, tariffs started to go into effect. The real Liberation Day was finally here. The European Union and China implemented more tariffs. The market went absolutely haywire again. In a surprising and perhaps frightening turn, bond yields did not drop, but instead continued to go up, the opposite of what the White House said it wanted and expected to happen. The entire global economy was knocked off its axis by the weight of the U.S. tariffs. And then Trump backed down. On April 9, in an abrupt, surprising reversal, the president announced a 90 day pause on all the bespoke reciprocal tariffs, bringing them down to the global baseline of 10% level that would remain in effect at this point. I have lost count of how many times tariffs have been turned on and off or paused and restarted, but it's a lot. Trump said People were getting yippee. His fans heralded the art of the deal, though no deals had been struck. A week later, the Wall Street Journal would report that Trump made his decision after his Treasury Secretary and Commerce Secretary got him a loan without pro tariff trade advisor Peter Navarro in the room. That reporting seems detailed and believable to me, but you can be the judge by go reading it for yourself. Anyway, China was not included in the pause. No. Instead, they got hit harder. The White house announced an 84% tariff on China that it then raised to 125%, which it clarified was on top of an existing 20% tariff, culminating in a 145% effective tariff on all Chinese imports. How high can we go? It's anyone's guess. Then on April 11, one day after clarifying we have 145% tariffs on China, we created a massive list of tariff exemptions for Chinese imports, including products like smartphones, computers and semiconductors. The White House denied this was a list of exceptions, despite having literally announced the order in a memorandum titled Clarifications of Exceptions. The European Union, in response to Trump backing down, then suspended all of its countermeasures on U.S. goods until July. The White House on April 13 then said that the exceptions on China are temporary and new tariffs on computer chips are coming. So I figured trade war back on, which gets us to about last week, which was quiet, too quiet. The trade war stopped warring. I had a vision of trade advisors from all across the globe in some scene straight out of an old Western after a massive gunfight, looking around bullet ridden saloons with broken glasses and bodies strewn across the floor, nudging various arms and legs with their boots to see who's still alive and quietly listening for a creak in the floorboard or another shot to ring out. But instead we just got the now typical market volatility paired with bond yields continuing to rise and threats to the US dollar. On Monday, April 21, some big time executives from major retailers like Walmart and Target and Home Depot, apparently worried about the tariffs, decided to bend the President's ear. The executives insisted that prices were about to spike as the tariffs began to have a deep impact on our supply chain. That apparently did the trick. The next day, the Treasury Secretary said that the China tariffs will ease very soon at a closed door investor summit. The markets, defying expectations, then rallied on Tuesday morning, which you know, might reasonably raise more questions about insider trading. Finally, Tuesday afternoon, now April 22, Trump and his economic policy team all began signaling trade talks with China are imminent, potentially explaining the previously inexplicable market rally. End scene for now. Until, well, yesterday when Secretary Bessen said a deal with China could be years away, sending the market back into a sell off. So what can one make of all of this when laid out end to end? I'm not really sure. I mean, it seems not great, disorganized, spurious without a plan. Personally, I do not see the art of the deal, and neither do manufacturers or most ordinary Americans whom this was supposed to help. Trump is now experiencing his worst polling on the economy ever. Peter Navarro, who a few weeks ago insisted the administration could use the 90 day pause to make a trade deal a day, has not announced a single trade deal. Even Art Laffer, one of the economists who has most staunchly backed Trump, seems worried. I've stated this theory before, but I think it bears repeating again. Trump is almost always most compelled by the last argument that he's heard. And if true, that theory would explain a lot about US Policy. So maybe that's just it. Trump loves tariffs, his team has mixed feelings on how to use them, and our economic policies are the manifestations of all that infighting my optimism, my desire to wait six months to a year and see how this all turns out. It's waning. After compiling all of the above, I'm more convinced that we're not in a good place. I'm less hopeful than ever that things will work out fine and dandy. And I don't think things are going to plan, if there even is one. All right, that is it for my take. I'm going to send it back to John for the rest of the pod and I'll see you guys tomorrow. Have a good one. Peace. We'll be right back after this quick break.