Trump’s Tariffs: Is He Trying to Bankrupt America, Too?
Yesterday was apparently “Liberation Day,” though it’s not clear what we were being liberated from. A strong economy, perhaps?
Trump stood in the Rose Garden (which he’s contemplated having paved over to match his Mar-a-Lago aesthetic) yesterday afternoon and proceeded to lay waste to an almost century-long world trade regime. It’s worth noting Trump waited until after the markets closed to make his big speech.
Trump announced 10% tariffs across the board, naming 185 countries, and an additional “reciprocal” tariff on about 60 countries he identified as the “worst offenders.” Four of the U.S.’s biggest trading partners made the list of “worst offenders”—China will face a 54% tariff, the E.U. 20%, Japan 24%, and South Korea 25%. The 10% baseline will go into effect on Friday, and the “worst offender” higher levels will hit starting April 9th.
As these tariffs go into effect, Americans will learn the truth about the man so many of them mistakenly believe to be a savvy businessman and brilliant dealmaker. When a man has declared bankruptcy on a dozen different businesses, it should be no surprise that, when left unchecked, his actions will tank our economy the same way he tanked so many of his private ventures. Despite the genre’s name, just because a man plays a role on a reality TV show doesn’t make it so.
As FDR’s Secretary of State Cordell Hull once put it, “A prohibitive protective tariff is a gun that recoils upon ourselves.” And Trump just opened fire on nearly every country in the world. He even levied tariffs on penguins. Yup, 10% tariffs will be imposed on the Heard and McDonald Islands, which are both home to large populations of penguins, and no known humans. But guess who he left off of his list? Russia, Cuba, Belarus, and North Korea, who are all led by the kind of dictator Trump idolizes. Apparently, in Trump’s world, penguins equal bad, and dictators equal good.
The Faulty Reasoning and Sketchy Math
Let’s start with Trump’s faulty reasoning for destroying world trade and laying siege to America’s economy. He claims America’s been on the losing end of world trade for decades because of our trade deficit. But trade deficits aren’t inherently bad, nor are trade surpluses good. Even the extremely conservative Cato Institute recognizes that trade deficits aren’t a measure of economic success or fairness, and that even if they were, tariffs don’t shrink them.
Yet, Trump used trade deficits to calculate the alleged “reciprocal” tariffs he’s forcing our “worst offenders” to pay. When asked how the tariff percentages were determined, the Trump administration claimed the calculations were based on the “offending” country’s tariff rates on the U.S. and the impact of its other nontariff barriers to trade. But it turns out that was all a lie (shocking, I know)—they just took a country’s trade deficit with the U.S. and divided it by double its exports to us. So, not only did they not bother to do any real math—they are punishing countries based on a measure (trade deficits) that in no way reflects fairness.
In addition to his obsession with the trade deficit, Trump claims world trade has cost millions of American workers their manufacturing jobs, and he’s the one who’s going to get them back. While, once upon a time, world trade did indeed lead to many corporations moving production of goods that require low-skilled labor abroad, the main culprit behind the decline in manufacturing jobs is automation, not trade. In a study conducted by Ball State University, 85% of manufacturing job loss between 2000 and 2010 was caused by technological advancements, and only 13% was due to world trade.
Even the low-skilled labor being performed overseas is nothing more than a “waystation on the road to automation.” The poor workers being exploited in third world countries are quickly being replaced by robots. The jobs Trump believes he can bring back—the jobs that couldn’t pay American workers a livable wage—will soon be obsolete, if they aren’t already. While a certain amount of manufacturing still takes place within U.S. borders, it’s the sort of work that requires training and therefore cannot be replaced by robots—training that a large part of the American workforce doesn’t have.
Irrational trade wars are not the solution to the disappearance of low-skilled manufacturing work and American income inequality; affordable education and STEM programs that train our citizens for the modern economy are. Some experts predict that the U.S. will have as many as 1.4 million unfilled jobs in the STEM field by 2030 due to a lack of available skilled workers. The president is not helping his constituents by slashing American education and scientific research while waging a useless economic war against our allies.
The Reality
Trump keeps falsely claiming that tariffs are a foreign source of revenue. Yesterday, he said that these new tariffs will force “foreign countries to pay for the privilege of access to our market.” But that’s not how tariffs work. It’s the company that imports the good that must pay the tariff; that is, the American company buying a good from a foreign country has to pay Trump’s penalty. And that American company will need to offset the added cost—by passing it on to the consumer.
And that’s the real story of tariffs: They are a tax on consumers.
In addition, tariffs increase inflation and slow economic growth. Not only will prices on everyday consumer goods increase, but so will the cost of raw materials and parts required to manufacture goods here in the U.S., which will lead to lower production, reduced wages for workers, and layoffs. Already, less than 24 hours after Trump’s announcement, the car manufacturer Stellantis announced it is laying off almost 1,000 of its U.S.-based workforce.
Economist Dr. Benn Steil, a senior fellow and director of international economics at the Council on Foreign Relations, explains the danger of Trump’s flawed understanding of tariffs succinctly: “The idea that protectionism is the road to riches is logically and historically monstrous.”
Early Impact
Barely 24 hours since Trump’s announcement, we’re already seeing the fallout. The stock market had its worst day since 2020, losing $3.1 trillion in value. Every major index fell, with blue chip stocks like HP, Nike, and Target posting double digit losses. At closing, the Dow Jones was down by 4%, the Nasdaq by 6%, and the S&P 500 by 5%. The tariffs haven’t even gone into effect yet.
On top of the markets tanking, enemies and allies alike are already planning how to retaliate. Unsurprisingly, China, the second largest economy in the world behind the U.S., vowed to enact countermeasures. But the same was true for our allies. European Commission President Ursula von der Leyen announced that the E.U., the world’s largest single market, was “prepared to respond,” but lamented that, “the consequences will be dire for millions of people around the globe.” Spain announced a €14.1 billion aid package to help its citizens weather the trade war. German lawmakers are calling for a tough response, and French President Macron called on fellow European countries to suspend investment in the United States.
When new Canadian Prime Minister Mark Carney reluctantly announced retaliatory measures on U.S.-manufactured vehicles, he declared, “The global economy is fundamentally different today than it was yesterday.”
And if we the People don’t stand up and speak out, tomorrow will be worse.
Sources
https://www.pbs.org/newshour/economy/column-trumps-trade-policy-recipe-recession-history-says
https://www.cfr.org/backgrounder/us-trade-deficit-how-much-does-it-matter
https://www.foreignaffairs.com/articles/united-states/2017-04-17/false-promise-protectionism
https://www.theatlantic.com/ideas/archive/2025/03/trump-tariff-retaliation-harms/681884/
https://www.politico.com/news/2025/04/02/trump-levies-tariffs-00267650
https://www.usatoday.com/pages/interactives/trump-lawsuits/
https://www.latimes.com/business/story/2022-05-18/trump-business-partners-outline-his-failed-deals
https://www.politico.com/news/2025/04/02/trump-tariff-trade-partners-liberation-day-00267350
https://www.foreignaffairs.com/united-states/new-world-order
https://www.foreignaffairs.com/world/truth-about-trade
https://www.cato.org/publications/trade-balance-winning-trade
https://www.reuters.com/world/trump-stokes-trade-war-world-reels-tariff-shock-2025-04-03/
https://www.politico.com/news/2025/04/02/us-tariffs-around-the-world-030348
https://www.politico.eu/article/donald-trump-us-trade-tariff-math-is-crazy-wisdom-of-crowds-author/
https://www.bbc.com/news/articles/cm257z1y2q9o
https://www.shrm.org/topics-tools/news/hr-magazine/u-s-needs-to-prepare-workers-stem-jobs
https://www.cnbc.com/2025/04/02/stock-market-today-live-updates-trump-tariffs.html
https://www.wsj.com/livecoverage/trump-tariffs-trade-war-stock-market-04-03-2025
https://www.politico.eu/article/eu-vows-to-retaliate-against-trumps-20-percent-tariffs/
https://www.reuters.com/markets/china-urges-us-cancel-reciprocal-tariffs-2025-04-03/
https://www.reuters.com/world/world-leaders-react-trumps-global-tariffs-2025-04-02/
I think it's possible that given the fact that he has turned down mutual 0% deals from several countries, Trump statement that "these new tariffs will force 'foreign countries to pay for the privilege of access to our market'" may not indicate just a lack of understanding but may actually be the admission of what is either an entirely insane plan to actually insist that countries not only allow free trade but actually do pay the US, with cash or other commodities, to offset any trade imbalance (never happening), OR more likely, it's and admission that the tariffs are actually a gigantic grift where he hopes to make either individual businesses or even entire countries pay HIM (if not with cash then with investments or business advantages for his or his cronies' companies) for exemptions. I figured his stupid meme coin was just another scam to fleece his unwary supporters but it's looking more like it might have been set up as a method of laundering outright bribes.
Great article, Breah! Clear-eyed, well researched and delivered with the perfect mix of wit and outrage. Keep ‘em coming!