It’s not fashionable to say it, but tariffs aren’t always a bad thing because it’s actually possible to apply tariffs on imported goods in a logical manner if there’s some kind of defined objective (to prevent cheap low-quality imports damaging an important national industry for example) and a coherent methodology in the implementation.
Donald Trump’s new tariff regime does neither of these things, in fact, it’s arguably the most stunning display of economic illiteracy in living memory.
The methodology for calculating the tariff rates they’ve applied on almost every country in the world is so absurd that economists and trade experts have slammed it as "reckless", "careless", "stupid", "bizarre", "insane", “outlandish", "misleading" and "just plain dumb".
The formula they came up with to determine what they claimed as other countries’ "tariffs charged to the USA" has absolutely zero relation to actual tariff rates, because what they actually did was take the United States trade deficit with that country and divide it by that country’s total exports to the US to come up with a percentage, which was then falsely claimed as that country’s tariff rate on US goods.
It’s such a bonkers formula for calculating claimed tariff rates that it’s like trying to estimate the top speed of a vehicle by measuring how much fuel there is in the tank.
The methodology is so absurd that it would have churned out a load of negative tariff rates for countries like the UK that have a trade deficit with the US, so they applied an arbitrary 10% tariff rate on all of the countries where their bonkers calculations wouldn’t even work.
One of the consequences of such stupidity is that the US has announced huge tariff rates on many of the poorest countries in the world, because they’re operating large trade surpluses with the US. Essentially they’re exporting loads of basic commodities like food, timber, and minerals to the US, but they’re too poor to buy a load of expensive high tech products from the US.
The insane formula they’ve used to come up with their tariff rates has ended up placing a massive tax burden on the extractive economic imperialism that the US has thrived on over the last century, not by design, but through an astounding display of economic ineptitude.
It’s hardly surprising that such insanity has triggered the biggest US stock market collapse since covid, because anyone with a smattering of economic understanding can see how ludicrous and damaging it all is.
Trump’s economically insane tariffs haven’t just caused problems within the United States either, with global stock markets also taking massive hits; downwards revisions in growth forecasts across the world; and world leaders left wondering what on earth to do in response.
How is it possible to come up with a sane reaction to such an astounding display of economically illiterate insanity from the leaders of the world’s biggest economy?
If countries respond by mirroring Trump’s tariffs on imports from the United States, they’d be spreading the insanity even further by basing their response on Trump’s utterly insane calculations.
Doing nothing is an equally poor option, because the Trump administration can’t be allowed to just get away with such reckless and damaging economic insanity, because it obviously won’t stop if they suffer no consequences.
Then there’s the problem of calling it the stupidity that it so obviously is. Everyone knows that Trump is a narcissistic man-baby who would likely seek retribution against any world leaders who dare to point out the unprecedented economic idiocy of what he’s done.
It’s incredibly tough to imagine a sane course of action in the face of such wanton stupidity, and it’s understandable that world leaders are struggling to think of coherent responses in the face of the most unhinged display of economic illiteracy that any of them will ever have seen.
The EU, China, and Canada have all spoken about imposing "countermeasures", and one of the most strongly worded condemnations came from the Australian PM Anthony Albanese who said that the Trump tariffs "have no basis in logic and they go against the basis of our two nations' partnership. This is not the act of a friend".
One of the most sensible responses came from the Japanese Prime Minister Shigeru Ishiba who pointed out that Trump’s tariffs are inconsistent with the WTO Agreement and the Japan-US Trade Agreement, although it seems unlikely the Trump administration are going to care that they’re in defiance of WTO rules and the free trade agreements they’ve signed with other economies across the world.
If they’re willing to present such a slapdash display of economic illiteracy to the entire world, why would they be bothered about the complicated details of WTO trade rules and free trade agreements?
Keir Starmer’s response is one of the worst because he’s still somehow blethering on about signing a UK-US trade deal, despite the fact he’s just watched the Trump administration rip up its trade deals with dozens of other economies to impose their absurdly calculated tariff regime, meaning a UK-US trade deal obviously wouldn’t be worth the paper it’s written on.
Trump’s malicious stupidity is a threat to global stability, but I don’t envy world leaders at all in coming up with logical and coherent responses to such damaging and unprecedented economic insanity.The last working-class hero in England.
Clio the cat, ? July 1997 - 1 May 2016 Kira the cat, ? ? 2010 - 3 August 2018 Jasper the Ruffian cat ? ? ? - 4 November 2021
on April 4, 2025, 9:34 pm