The weighted average of the new U.S. tariffs will be 29% it seems.

Maybe they know the consequences, but to give you a idea... it was 1.5% before. The new ones will be equivalent to Brazilian tariffs in 1989 before opening the economy (31%, data from World Bank).

Now, Brazilian tariffs, which have one if the most closed economies, by weighted average, is 7%.

China, have 2.2%.

The United States will be an autarchy, similar to how LaTam was in the 70's, when tried this exact idea. The tariffs being as high instantly, will impact the economy, later, the country will probably grow, which is what they expect, but this is not a productive grow. Because your new factories now are not competing with external products, so your productivity go down, this means real income will also go down.

So yeah, some people at best (if is not a robot doing the job) will have a job in a factory, but on what he will be able to spend with his wage won't make it worth even for this person.

People are also getting way too caught up in the math and numbers. They think WH calculated the percentages through incompetence but the 25% tariffs weren't based on anything very real either. The entire goal is not carefully calculated trade equality, it's mafia style intimidation to get some easy concessions as quickly as possible from everybody... before the economy crashes too hard. Spamming tariffs to see what sticks. The math is just a plausible justification for something they would have done anyway.

It's bully tactics.

For ex see Canada's fentynal importation issue, which was something invented to justify a natsec emergency legally. The numbers don't have to be real, just plausibly deniable.

>They want to repudiate foreign held debt, or devalue it, by revaluation of the USD

Devaluing dollar does not reduce debt measured in dollars. It only makes US debt less valuable to forefingers.

Devaluing dollar can work well only if foreign investments into US stop or reverse. "foreign investors at the end of last year owned 18% of U.S. stocks, according to Goldman Sachs" The trend has already reversed https://www.reuters.com/markets/us/foreign-demand-us-assets-... Killing foreign demand for US assets more permanently is possible but it means financial market crash.

What WILL happen is recession. Atlanta Fed GDPNow dropped from -2.8 to -3.7 percent in a week. https://www.atlantafed.org/cqer/research/gdpnow?date=2025-04...

If that is the plan, it's terrible. The majority of US debt is domestic.

https://usafacts.org/articles/which-countries-own-the-most-u...

Given everything recent I’d say competence in the WH is a stretch

The prez is literally holding up placards where half the numbers on it are mislabelled and they rest of the numbers are that mislabelled/misunderstood number divided by half

That sounds like garden variety incompetence to me not 5D chess

The bring manufacturing back to the US never made sense to be numbers wise.

Thing A is currently manufactured in China | Vietnam | whatever lower cost country and sold for $x today. Slap on 50% tariffs so now it costs $1.5x. That provides an incentive to produce thing A locally sure.

But if you can already produce thing A locally for $x, you wouldn't have offshored the production in the first place. Maybe producing thing A locally will cost less than $1.5x, but it'll still be more than $x. So cost still end up increasing.

Am I missing something?

> I would think it unlikely they can secure an updraft from this to keep the house. What's the plan for that?

Clearly they will "secure the vote". Massive voter disenfranchisement is already taking place, it will go to the next level.

"Personally I think it's a mistake but hot takes "they have no idea what's coming" are I believe naive."

They slapped 10pct tariffs on the Heard and McDonald islands. Literally uninhabited islands in Antarctica.

Why don’t you look up how they came up with those tariff numbers and come back and tell us that this is some sophisticated economics at play here.

> they know what's going to happen, and they expect the coming storm because they seek what follows

If they do they’re lying. The mechanism by which tariffs restore production is by raising prices. That makes it more lucrative to invest in serving that market. If producers have to absorb the tariff, they won’t boost production and the tariff is just a corporate tax increase.

> to repudiate foreign held debt, or devalue it, by revaluation of the USD

That’s called inflation!

> What's the plan for that?

The answer to this is pretty simple, although American Exceptionalism makes it hard to see for many Americans. For every other country, most could see pretty clearly that they'll not plan on holding free elections going forward.

My personal opinion is less complicated: they're pulling the economic levers they have in a way that they can use to enrich the top 0.1% even more. The richest of the rich got very wealthy during COVID (economic fallout, buying up lots of stocks at a discount then the biggest stock market bull run we've ever seen) and they want to make it happen again.

I am amazed at how many people are still imputing intelligence to Donald Trump. Him winning the presidency again after everything is less about him being some deep mastermind and more an exposure of the issues with America that have been there building for decades now.

The difference between Trump 1 and Trump 2 is that all the "establishment" R politicians who were "corrupt" or "deep state" but willing to work with him could at least steer the ship in the first term. Those people are gone and all who remain are ideologues and yes-men. Trying to find logic in the madness strikes me as someone going through the stages of grief near death, trying to find sense in a senseless, uncaring world. Take occam's razor, no one is steering the ship at the white house right now.

> hot takes "they have no idea what's coming" are I believe naive. They know. They just don't care

I think they know, they care and decided that it is a reasonable way forward given very limited (trade and budget deficit) options. Otherwise I think you are spot on.

To spitball some ideas on your midterm comment (again, agree to it). One possibility is they see it as an unavoidable loss, plan on using veto to maintain course set during the first 2 years (which is why they rush) and hope to be in the updraft phase by the November 2028 elections. Maybe.

I don't think its about devaluing the currency to pay back debt at all. I believe it's about a fundamental vision of an autark USA, decoupled from any international obligations, whether its NATO, WHO or WTO and focused purely on producing and selling domestically whilst having a "beautiful ocean on each side".

I believe that's an unrealistic vision, not least since America's debt means it cannot afford significant shrinkage of its global market or a loss of its status as reserve currency, but I believe autarkie is the goal none the less.

> a lot of people assume the economic consequences like these have not been understood by the WH

I think you're making the same mistake a lot of observers are making: you're looking at this from an economic perspective, and think those decisions were taken on an economic basis. But that is likely not the case.

The Trumpist movement is entirely focused on political aims: re-establishing old hierarchies of power inside the country, and entrenching them for good. The important work is the slashing and burning of welfare and safeguards for lower and middle classes, putting minorities "back in their place", and entrenching the wealthy into positions of absolute dominance. Everything else is a distraction, to keep newspeople busy and the population focused on recreating an idealized, "Happy Days" 1950 society. Enemies will be created to make you hate, this or that policy will be picked up or dropped just to keep you arguing, and meanwhile the important work is made irreversible. Once you destroy what was built over a century, it will take decades to rebuild them, and meanwhile the New Normal will take root and become impossibly hard to remove.

Fascism and nazism did not move from economic principles - they picked up what they needed as they went, opportunistically, because their main aims were fundamentally political. The Trump II administration works in the same way: the priority is political dominance to achieve political aims at societal level, everything else is tangential and opportunistic.

> they know what's going to happen, and they expect the coming storm because they seek what follows.

I agree that that's their understanding. I'd argue that in reality they don't, they can't. International relations are a very complex system. And there is no precedent of an empire wilfully dismantling its periphery.

I really don't enjoy the whole "may you live in interesting times" thingy

> and they expect the coming storm because they seek what follows.

Well, a lot of economists, including one Nobel Prize winner (Paul Krugman) have commented on this being a bad idea for the economy...

On the off chance that those people who are supposed to know what they are talking about are all wrong and haven't thought about it being some genius diversion tactics -- it's generally still a pretty bad idea for a government to effectively ask everyone to "tough it out" and "just trust me bro".

It's really disappointing that people are actually trying to theorize this as some kind of genius plan. It doesn't take a genius to figure out the amount of irreparable damage they have already done to regular folks is unacceptable (uh... I'm sure some nutters out there think that DOGE is keeping track of all the damages they have done and will pay everyone once their genius plans have worked out).

That kind of logic really amazes me.

> They want to repudiate foreign held debt, or devalue it, by revaluation of the USD

Given how dependent usa is on foreign debt, that sounds crazy to me.

If they accomplish that sort of thing, they wont be able to borrow at favourable rates anymore. That seems incredibly bad for usa. Am i missing something on how severe that would be?

Of course there are people who know. But not the decision maker. I notice the use of collective pronouns, but there is only one person driving this. Everyone else is riding the tiger.

Not sure why, despite long and consistent experience, that people keep thinking he’s anyone but exactly who he appears to be. There’s no grand plan, calculated risk, or 4D-chess. The clown is just putting on a performance, based on his immediate feelings, and the immediate reaction of the crowd. There’s nothing else there.

> What amazes me is the timing

If it didn't hit midterms it would hit the next presidential race. You gotta pick your poison. I guess they decided it's better to just get it over with.

> They want to repudiate foreign held debt, or devalue it, by revaluation of the USD

I don't understand, who's holding that "foreign held debt"? foreign countries I suppose, so which countries do you have in mind?

For one, it's not China, which holds a large amount of US treasury bonds (so basically, China is a lender of USD). So the revaluation of USD would work great for China: one, the value of the China-held USD bonds increases, and second, the price of Chinese exports decreases in USD terms.

So help me understand, what's the plan with the revaluation of USD?

Foreign held debt is less than 30% of outstanding, and less than that is sovereign-owned, so I don't think devaluing or attempting to restructure foreign debt via "century bonds" will have much effect on US debt obligations.

I seriously doubt this administration understands any of this. I agree that they don't care, but I don't think they know what's going to happen. No one does.

That runs against basic financial reality. The treasuries are the basis of all U.S. liquidity. Owning commercial papers or stocks doesn't help as companies own treasuries. Putting deposits in banks won't help either because banks hold treasuries.

In my opinion you are giving the US government far too much credit. Trump has through his usage of social media created a weapon that he can strike at anyone that stands in his way. With all branches under Republican control there's simply no one left who can stand up to him without having his political career destroyed. We've seen this story unfold so many times in countries around the world - Turkey would be one recent example where the misguided policies of Erdogan have left the country with record inflation rates for years.

> I would think it unlikely they can secure an updraft from this to keep the house. What's the plan for that?

They tried to steal an election already - it's pretty easy to understand why they are making decisions as if they don't have to worry about elections anymore

Trump told you, I don't know why you still wonder what's the plan: https://www.reuters.com/world/us/trump-tells-christians-they...

I think this is what's going on:

https://youtu.be/cmTeg0B9tH8?si=yhIAg45FCBUW40mI

> Rust belt sewing shops and Walmart grade cheap goods production lines?

Are we really going to see this happening in 2 years? I'm not sure about this. The cost of Mexican/South Asian factories are still a lot lower than US.

This was a macro argument assuming a benevolent intention. However if we look purely at self interests the main thrust is to increase revenue on paper to cut taxes. At the same time raise debt ceiling. And when the tarifs proof unsustainable then well, we are in happy deficit spending land with no fault on the drivers side.

As a professional armchair economist, I would call it a power off rather than a reset.

It took over a hundred years for countries to once again have economic trust with France again when they went hard on tariffs in the 1600s causing war.

Who in their right mind would negotiate with a man known to rip up existing agreements on a whim?!

I have a feeling that this will knock the United States down a peg economically to the point where we look back on Liberation Day as America’s Brexit

> "they have no idea what's coming" are I believe naive.

There could be someone who understands this. But this someone never shows their face in public, or provides any rationale for the policies beyond the nonsense like "reciprocal tariffs" or similar nonsense. I mean the literal board with tariff percentages that was held up had numbers that made NO sense, to anyone! Yet there are no critical questions?

It's beginning to feel like a conspiracy theory. That behind the obvious idiots who are the faces of the policies, are some other, less inept people who are pulling the strings. But who would this be?

> they expect the coming storm because they seek what follows.

If there are elections in 2026 and 2030 then what follows is a blue wave in the midterms and millions of disappointed voters who had their 401k's gutted, saw prices of most goods increase 10%+ in 2 years, saw little to no tax cuts, lost their jobs if they worked for the government, and lost their social security.

> What's the plan for that?

Trump ran on a campaign that voting is a pain and you won't have to do it again if he wins. Since then he's maintained that third term is the plan. Doesn't really matter how upset the voting population is if you're going to ignore their votes.

> the midterms will hit

The plan may be that there are no more elections, or that the only people who are allowed to vote are identified MAGA supporters. Does this seem impossible? Everything Trump has done would have been considered impossible only a couple of months ago.

What Trump reveals is the utter apathy of Americans. They're sheep in lions' clothing, not the other way around.

> Maybe by 2027?

Why on earth would you spend millions and billions of dollars on investing into a ROI-10-year factory, when a cheeseburger overdose or, heaven forbid, the Dems winning another election will take that investment and turn it straight into the toilet?

Not to mention that you'll be locked out of the world's markets, thanks to reciprocal tariffs.

Foreign debt is held in US treasuries, surely they know that? Trump can decide that treasuries can no longer be redeemed, but foreigners only hold 20% of them, so…he would have to somehow make them selectively redeemable, and anyways, there would go the USA’s credit, unless you mean other countries can bribe Trump with treasuries to bring down their tariff? They could also depreciate the USD reducing its debt in real terms but that will most definitely cause hyper inflation along with tariffs.

They have no plan, not even a concept of a plan. Trump is just hoping that he can get lucky with a good outcome, but that is really improbable. This is a huge opportunity for China though if they make deals with everyone else to the exclusion of the USA.

Even the idea of moving production back the USA is misguided, we are already at low unemployment, and haven’t made enough investments in automation like the Chinese are doing ATM. I doubt China will let us import that tech to setup our own factories quickly without worrying about who will work them.

They might be smart about it like you said, but they might also just be stupid. And the theory that they are smart about it is based on a whole bunch more assumptions...

This sounds like typical NYT sane-washing. After the Signal fiasco I've lost all confidence this administration is secretly super competent but just refuses to let any of us see it. There is no big plan here. This is just an old man surrounded by too many yes-men.

This is, as they say, “sanewashing”. Trump is doing this out of a mix of spite and a view of trade as a zero sum game. He may be advised into a path to try to pivot this into a “win” by large scale debt restructuring, but that is not the overarching motive.

I had hoped that this kind of "Trump is actually playing 4d chess, you just don't understand" argument would be dismissed after seeing him through the first term, but apparently not.

This is a good take, but I think I can answer your question about the midterms. This is timed specifically for them. The drop we're seeing in markets right now isn't a pricing in of the tariffs, per se (at least, not yet), it's a pricing in of policy uncertainty that is going to lead to a near-term drop in investment.

However, because they are doing it so early, they will have time to recalibrate and bake in exemptions until the market / inflation is happy. Up to and including backing off of the policy entirely, if that ends up being necessary. As a political strategy, it is perfectly timed to allow Trump to "save the economy" from his own policies. This is true imo independently of what you may think about the policy as policy.

When it comes to the policy as such, recipirocal tariffs, conceptually, are designed to incentivize the overall global reduction in tariffs. So, as a headline, implementing "reciprocal tariffs" is actually favorable to free trade. However, there are some important details that they have fucked up, such as identifying tariffs with trade deficits in general, and in particular identifying them with trade deficits in goods only. That is really the component of the policy that doesn't make sense, and it is important.

Most likely, they will recalibrate and/or provide a lot of exemptions, particularly as the midterms approach. As a political tactic, I think it will work out fairly well, if they respond to the feedback appropriately - that's the big question though, and that uncertainty is the most significant reason for the market drop.

> the midterms will hit while the bottom is still chugging along. I would think it unlikely they can secure an updraft from this to keep the house. What's the plan for that?

There won't be any elections. We will stick with Trumpism. We will be our own best friends, Morty. The outside world will be our enemy. We will do great things Morty, we will do the greatest things. A Trump administration for a 100 years. A Trump administration forever. Over and over. Running around, the Trump administration forever.

You have seen nothing yet. Next he will want a mineral deal with each country to pay back the money they stole from the USA in the past. "Primate Behavior Reference 21": https://youtu.be/GhxqIITtTtU

they understand first order effects, but second or higher orders are seldom predictable in this matters. So the risk is huge. This massive shock will reveal hidden frailties.

Always keep in mind that Blackrock manages the retirement/social insurance funds of a lot of countries. If the USD crashes, they will, too.

The aftermath will probably be complete isolation of the US, because no country will want to trade with them. And the administration is fine with that, because they're not interested in keeping the status quo of democracy alive.

More influence for them, less influence from outside. That's how oligarchs think and act.

That all sounds fine except that the admin have no intention of keeping these tariffs, rendering your point kind of moot. Trump will enact/retract these tariffs multiple times over just the next month, and few to none of them will still be this high in three months. Since we are just speculating here - what is probably going on is that Trump has some very bad ideas and no one is allowed to contradict him. I'm sure there are people around him that know better, but he really is this simple minded. To your point about midterms, I'm sure his Project 2025 handlers are beside themselves that he's doing this, but there is little they can do to stop him.

If they hold the midterms...