Tag: howard lutnick
President Donald Trump

Tariffs? Now You See 'Em, Now You Don't

The Trump tariff story keeps getting crazier. It may seem like ancient history now, but it was just over three weeks ago that Donald Trump gave us “Liberation Day,” a set of massive tariffs on imports from almost every country in the world, including the uninhabited Heard and McDonald islands off the coast of Antarctica.

The tariffs were billed as “reciprocal” even though they bore no relationship to any tariffs or other trade barriers these countries impose on U.S. exports. Incredibly, Commerce Secretary Howard Lutnick, actually defended the Heard and McDonald Islands’ tariff, insisting that it was not a mistake but rather to prevent transshipment from other countries attempting to evade tariffs.

Lutnick’s explanation was obviously absurd. First, they left many other uninhabited islands without tariffs, apparently leaving the door open for transshipment through them. More importantly, if our customs staff really can’t catch items coming in from uninhabited islands, then they will be completely useless dealing with a complex system of tariffs charging vastly different rates between countries and on different products from the same country. The bottom line is that we yet again see how the Trump administration finds itself unable to admit a mistake.

But back to the timeline, as the markets were crashing Trump backed away on April 9th, eliminating his so-called reciprocal tariffs and said that he would lower his tariff on most countries to 10 percent. Note that this is still a very large tariff. When we negotiated trade deals with Mexico, Canada, and other countries their average tariffs were already well below 10 percent. In the context of “reciprocal” tariffs that were as high as 40 or 50 percent, Trump’s fallback tariff seemed low, but not by pre-Trump real world standards.

Trump boasted that a reason for the rollback was that 75 countries around the world had called to negotiate with him, although he refused to give the list of countries. Trump also went ahead and imposed 25 percent taxes on imports of steel and aluminum, which went into effect in March. He imposed 25 percent taxes on imports of cars and car parts which went into effect at the start of this month.

The big tariff that Trump did not delay on April 9 was the 104 percent tax on imports from China. He actually raised this to 124 percent in response to China’s retaliation. He raised his tax further to 154 percent a few days later and some items are even subject to higher taxes. In addition to its retaliatory tariffs, China also announced that it was suspending exports of rare earth minerals which are essential for many manufacturing processes in the United States. It also is boycotting U.S. soybeans, which means U.S. soybean farmers are losing their largest customer.

But then Trump decided to exempt Smartphones and a number of other electronic devices from his massive taxes on China’s imports. Whether this was due to a special relationship with Tim Cook, Apple’s CEO, or concern about outraged consumers looking at $2,000 iPhones is anyone’s guess.

The tariff game is still far from over. On Wednesday, Treasury Secretary Scott Bessent said the tariff levels between the U.S. and China were not sustainable and Trump hinted they would likely come down soon, even though there was no evidence of high level negotiations. These comments got a great reaction from financial markets, leading to big stock rallies, but left open the question as to the purpose of the tariffs.

Just to remind everyone, if we go back to “Liberation Day,” Trump’s tariffs were supposed to be about bringing manufacturing back to the United States and ending our trade deficits. Many of us pointed out that this was unlikely to work even in the best case scenario. But if the tariffs were just a negotiating ploy, or a way for Trump to extort favors, they are certainly not going to have much impact on manufacturing. They may make Trump even richer, but no one will invest in the United States based on a tariff that can disappear in a year or even a week.

I wrote before on how Trump seems to have brought Biden’s factory construction boom to an end. His now you see them, now you don’t tariffs clearly will not help this picture.

Reprinted with permission from Dean Baker Substack.

Why Lutnick Displaced Musk As 'Most Loathed' Trump Adviser

Why Lutnick Displaced Musk As 'Most Loathed' Trump Adviser

Commerce Secretary Howard Lutnick, who passionately defended the administration's controversial tariff policy despite the resulting market chaos, is said to be the "most loathed" member of President Donald Trump's Cabinet.

According to a report by The New Republic, Lutnick has displaced tech billionaire Elon Musk as "the most loathed member of Trump's inner circle" for two reasons.

"The first is that he defeated efforts by Treasury Secretary Scott Bessent and National Economic Council Chair Kevin Hassett to limit the size and scope of Trump’s tariffs, which, if we’re lucky, will tip the United States economy into a recession. (If we’re unlucky, the tariffs will tip the global economy into a depression.)," the report said.

"The second reason Trump officials hate Lutnick is that nobody thinks he actually believes the hooey he spouts in furtherance of a maximalist tariff policy. In an administration overflowing with sycophants, no nose is burrowed more deeply inside Trump’s gluteus maximus than Lutnick’s," it added.

The report further notes that until last week, no one was more reviled within the Trump White House than "special government employee" Elon Musk. However, after Musk faced a significant setback with his $25 million investment in the Wisconsin Supreme Court election, which shattered his image of invulnerability, that disdain shifted to Lutnick.

Last moth, Politico quoted a source close to the administration as saying that the commerce secretary “is constantly auditioning for Trump’s approval."

“He’s trying to be a mini-Trump," the individual added.

Politico reported at the time that White House and administration officials were “growing increasingly frustrated with Lutnick." His “abrasive personality” and comments on the media displayed “a lack of understanding of even the basics about how tariffs and the economy work," the officials reportedly thought of Lutnick.

Meanwhile, Lutnick made an appearance on CBS News's Face the Nation on Sunday to advocate for the tariffs.

He said, “We’ve got to start to protect ourselves,” adding, “and we’ve got to stop having all the countries of the world ripping us off. We have a $1.2 trillion trade deficit, and the rest of the world has a surplus with us. They’re earning our money. They’re taking our money, and Donald Trump has seen this, and he’s going to stop it.”

Reprinted with permission from Alternet.

In Trump's Hands, Absolute Power Brings Inevitable Catastrophe

In Trump's Hands, Absolute Power Brings Inevitable Catastrophe

Everyone should have known what was about to happen when Donald Trump announced huge global tariffs under the slogan "Make America Wealthy Again." Like "Make America Healthy Again," which accompanied the return of deadly measles, the cheery tagline for Trump's trade war foretold ruin — which has arrived at warp speed.

Within hours, the global markets wiped out trillions of dollars in wealth from the balance sheets of retirement accounts and pension plans as well as banks and corporations. What looms ahead is not the "boom" that Trump has predicted but rather a shrinking economy with both stagnating employment and rising prices. Which is precisely the opposite of what he promised voters last year.

Over the weekend, as markets continued to plunge both here and abroad, the president told reporters that tariffs are "a very beautiful thing" while observing that "sometimes you have to take medicine." Or inject a fatal dose of bleach into your veins.

To anyone who has observed Trump closely over the course of his career, this catastrophe was predictable as soon as he gained the unchecked sway he now wields in Washington. He is not a "stable genius" with superior genetic endowment, but a spoiled scion of middling intelligence at best. He is not a brilliant negotiator who can conclude the Ukraine war in a single day or bring the Chinese government to heel, but a failed businessman who wrecked his father's real estate company with bad deals and excessive debt.

Having escaped any accountability for the national destruction incurred during his first presidential term — from the mismanaged pandemic that cost a million lives to the violent coup attempt of January 6, 2021 — he has returned to the White House with even greater arrogance, courtesy of the Supreme Court. Secure in power, he is delivering an extremely painful lesson in the consequences of ignorance and incompetence run amok.

Those dismal qualities were instantly on display in every aspect of the tariff rollout, as neither the president nor his phalanx of flunkies could offer any plausible rationale of his actions beyond sloganeering.

Why is the United States seeking to punish its traditional allies in Europe? Why are we penalizing our best trading partners in Canada and Mexico? Why are we imposing trade barriers on tiny countries like Lesotho and remote islands uninhabited by human beings? (We may yet see how brilliantly Trump negotiates with penguins.) And how did Trump formulate the cardboard list of nations and tariffs he brandished as a prop at his "Liberation Day" announcement?

The White House could offer no coherent response to these puzzling questions, which drew contradictory answers from everyone around Trump, as well as the president himself, or no answers at all. That list resembles something composed on ChatGPT, like a cheating high schooler's homework.

The true purpose of tariffs, according to one of the president's blustering sons, is to assert a muscular dealmaking stance against every nation that supposedly bullied us in the past.

"I wouldn't want to be the last country that tries to negotiate a trade deal with @realDonaldTrump," wrote Eric Trump on X. "The first to negotiate will win — the last will absolutely lose. I have seen this movie my entire life..."

What Eric actually has seen over his entire life is Daddy negotiating ignominious bankruptcy deals with bankers, but never mind. At roughly the same moment that he and others uttered those tough reassurances, the White House press secretary declared that "this is not a negotiation" because the tariffs "are part of a national emergency response" to nations that have harmed American workers for decades. Trump himself shows no sign of preparing to negotiate anything.

The "national emergency" lie is what undergirds Trump's legal authority, for he would otherwise need Congress to approve the tariff program. But before rubberstamping this madness, congressional leaders might insist that he explain its ultimate purpose, which only raises another set of baffling contradictions.

You see, sometimes Trump suggests that his aim is to collect trillions of dollars in revenue from imports, supposedly enough money to replace the income tax. Simple math proves that to be impossible — and unlike the income tax, whose impact is progressive, tariffs impose a far greater burden on middle-class and poor families.

At other times, he claims his objective is to rapidly expand domestic production by replacing goods from abroad. That too is futile, because many important crops can't be grown in sufficient quantity in the United States because our industries rely on global supply chains, and because factories take years to build. If we somehow could substitute U.S. products for all our imports, the tariffs wouldn't raise any revenue at all.

Meanwhile, Trump is torching another of his favorite slogans. As investor Steve Rattner explained on MSNBC's Morning Joe, the current projections show our markets plunging faster and our gross domestic product shrinking more than in other developed countries.

So much for "America First."

Joe Conason is founder and editor-in-chief of The National Memo. He is also editor-at-large of Type Investigations, a nonprofit investigative reporting organization formerly known as The Investigative Fund. He is the author of several books, including The Raw Deal: How The Bush Republicans Plan To Destroy Social Security and the Legacy of the New Deal. His latest book is The Longest Con: How Grifters, Swindlers and Frauds Hijacked American Conservatism.

Reprinted with permission from Creators Syndicate.

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