Trump's biggest tariff, 50%, was on tiny landlocked poverty-stricken Lesotho inside South Africa, over a minuscule trade imbalance of $234.5 MILLION in 2024, which is under a treaty for godsakes

 

Lesotho's exports to the US in 2024 were valued at $237.3 MILLION lol. Trump now wants 50% of that.

King George III, who also was nuts, was a benevolent king to America compared to this guy.

 Trump's biggest tariff was on tiny Lesotho. Here's what to know about the African kingdom.

... Mr. Trump's so-called "Liberation Day" tariffs included a whopping 50% levy on the small, impoverished nation's imports, and the Lesotho government quickly said it would send a delegation to Washington. ...

Lesotho's annual gross domestic product of $2 billion is highly reliant on exports, mostly of textiles, including jeans. ...

The White House claims, by way of [its] formula, that Lesotho imposes 99% tariffs and other barriers on U.S. imports. ...

With an annual gross domestic product of just over $2 billion, Lesotho is largely dependent on South Africa — it biggest trading partner — from which it imports most of its food, selling water in return.

The economy has been heavily reliant on textile exports bound for the United States through the African Growth and Opportunity Act (AGOA) trade deal, which provides duty-free access to the U.S. market for some African products. The Trump administration's imposition of tariffs on African nations has raised questions over how likely the White House is to renew the AGOA pact when it expires in September. ...

Normally you institute protectionist policies like tariffs when you already have something to protect, not before

But our Orwellian Republicans put the cart before the horse.

You can't return to something which no longer exists. The net trade deficit for 2024 is nearly $1 trillion, instead of flat like during the post-war up until Reagan, who first ran in 1976 against Ford, when tariffs still had something to protect but we listened to the siren song of free-trade instead.

That is why the Trump administration has had to cast about for at least six different reasons for instituting tariffs at the present time, none of which are at all convincing otherwise there wouldn't be six of them, not to mention that the math used for them is preposterous, or that they are the farthest thing from reciprocal.

The real reason for them, however, is that the tariffs, like the executive orders which now number over 100, are the immediate strings available to our Puppet Master, which he can pull this way one day and that way another, your ever present reminder of who is in charge around here. Suck up to him and he'll make a deal.

Trump's White House laughably brags about these things.

New taxes, which is what these tariffs are, are liberating don't you see!

Our mad King Ludwig needs this constant adulation. The tyrant has desires which he can never fulfill, Plato warned us.

But of course all this can be undone by the next president, which is no way to run a country. It makes for deep institutional instability and distrust throughout the global economy, for which few can reasonably plan.

The message remains the same: Expect Kaos. 

 

Trump tariff math is about trade imbalances and is not about a reciprocal response to a rate, requiring a trading partner to buy more from the United States rather than just eliminating its tariff rate

In other words Trump's calculations of foreign countries' tariffs on the United States result in fictional rates.

From the story here:

... For instance, the U.S. claims that China charges a tariff of 67%. The U.S. ran a deficit of $295.4 billion with China in 2024, while imported goods were worth $438.9 billion, according to official data. When you divide $295.4 billion by $438.9 billion, the result is 67%! The same math checks out for Vietnam.

“The formula is about trade imbalances with the U.S. rather than reciprocal tariffs in the sense of tariff level or non-tariff level distortions. This makes it very difficult for Asian, particularly the poorer Asian countries, to meet US demand to reduce tariffs in the short-term as the benchmark is buying more American goods than they export to the U.S., ” according to Trinh Nguyen, senior economist of emerging Asia at Natixis.

The U.S. also appeared to have applied a 10% levy for regions where it is running a trade surplus. ...       

Futures at 7:00 AM EST:

 

Joel Kotkin: The capitalist elite undermines our economic security

 He means libertarians.

Here:

Free-market dogmatists have played a part in the deindustrialisation of the West as well. Consultants and investors pushed businesses to look offshore for virtually every critical production input. Between 2004 and 2017, the US share of world manufacturing shrank from 15 per cent to 10 per cent. Our reliance on Chinese inputs doubled. The trade deficit with China, according to the Economic Policy Institute, has cost as many as 3.7million American jobs since 2000. Overall, the US and the EU have seen their share of value-added manufacturing drop from 65 per cent in the 1960s to barely half that today.

The Trump administration doesn't get it that the Chinese trade system is a strategic threat

And neither does the Politico story excerpted below. China faces an unpredictable foe in Trump and his tariff threats, but China is playing the long game of imperial expansion and domination and only seeks a path navigating through what it knows is the temporary and incoherent threat Trump represents. Trump does not bring a fundamental rethinking of China. Once he is gone the US trade stance will return, unfortunately, to the status quo ante, continuing the hollowing out of the West by enriching a few who sell these communist liars and thieves the rope they'll use to hang the rest of us.

From the story here:

The administration in May said it wanted China to commit to reducing the trade deficit by $200 billion by 2020. It also asked China to stop subsidizing high-tech sectors like robotics and alternative energy vehicles identified in its China’s strategic economic plan, cut tariffs on “all products in non-critical sectors” to levels at or below U.S. duties and assure that it would not challenge U.S. actions taken in intellectual property disputes.

Robert Lighthizer, Trump’s chief [trade] negotiator, said at the time that it wasn’t his goal to “change the Chinese system,” despite his long list of criticisms of that system.

The libertarian free-traders in both parties have killed the American middle class: Reagan, the Bushes, Clinton, Obama

From Patrick J. Buchanan, here:

The average U.S. family has not seen a rise in real wages in 40 years. This is directly traceable to the loss of more than one-third of all U.S. manufacturing jobs. And that loss, that deindustrialization of America, is directly tied to the $10 trillion in trade deficits since Bush I. Writers who celebrate how U.S. imports have risen in this month or that year almost never mention the trade deficit for this month or that year. Perhaps that is because the United States has not run a trade surplus in four decades, whereas, in the first 70 years of the 20th century, we never ran a trade deficit. Trade surpluses add to GDP; trade deficits subtract from GDP.

And when in a company town the company closes the factory, the town often dies. And all the little satellite businesses—bars, diners, food stores, pharmacies—that rose around the factory, they die, too. The tombstones of countless dead towns across America should read: Killed by Free Trade. Tenured economists on college campuses call this “creative destruction.”

The stagnant wages of two generations of U.S. workers also help to explain the crisis of Social Security and Medicare. For, as workers’ wages fail to rise, or fall, so, too, do their contributions in payroll taxes. If, as Simpson-Bowles contends, our largest entitlement programs are heading for insolvency, free trade played a lead role in that American tragedy. And where is the liberal morality in passing laws to ensure U.S. workers a living wage and clean and safe conditions, and then, through fast track and free trade, signaling their bosses that they can evade these laws by shutting factories here, moving their plants to Asia, paying coolie wages, and subjecting Asian workers to conditions that would earn a U.S. industrialist a tour in Leavenworth?

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I've checked Buchanan's math and he's exaggerating a bit. The total is precisely $9.5 trillion . . . if you go back as far as 1982 under Reagan, but you get the point.

George Will falls in love with Bill Clinton's free-trade utopianism

George Will here:

'You who are reading this column probably have a chronic, indeed incurable trade deficit with your barber or hair dresser. You regularly buy what he or she sells, yet he or she never buys anything from you. But things somehow work out. As they do between nations, because as the late Robert Bartley, editor of the Wall Street Journal’s editorial page, once wrote, “International transactions are always in balance, by definition.”

'“Protectionism,” said Clinton during the NAFTA debate, “is just a fancy word for giving up; we want to compete and win.”'

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Do we really need to point out that if transactions are always in balance then there is no such thing as winning? Trade is an endless struggle between competing interests just as is politics. It is pure utopianism to dream otherwise. There is no finality in politics or trade, simply a pause before the next confrontation or negotiation, which usually ensues after a party to the transaction realizes it got shortchanged in some way, or will be.

Karl Marx was all for free-trade because it hastens the transition from capitalism to socialism by shifting political power to a growing, impoverished proletariat and the elites who run them. 

Its odd bedfellows today are Barack Obama and George Will, and too many members of the two political parties.

The Euro for Europeans but Germany, Raus!

Seen here:

German actions have not themselves been entirely pure. In 2002, Germany, along with France, began the process of easing the strict rules of the Maastricht Treaty when it was able to get an exemption from the cap on budget deficits at 3 percent of GDP, essentially scrapping the Stability and Growth Pact. German banks also had their eyes wide open in awarding loans to Greece and the other weaker European economies, throwing prudential caution aside. In fact, some major financial and corporate entities have allegedly facilitated deceptions by earlier Greek governments or to have been involved in outright corruption in connection with some loans. Then, there is also the inconvenient fact that outstanding German debt is itself well above the 60 percent cap in the euro zone ground rules. Another inconvenient fact is that just 11 percent of the facilities extended to Greece have been used to support the Greek state, as the facilities have ultimately been used to prop up the banking sector in the lending countries.

Although Germany was not responsible for the financial collapse of 2008 that set the stage for the long crisis in the euro zone, its neo-mercantilist economic and trade policies, which one Philippe Legrain dubbed Merkelism, has exacerbated the situation and impeded an effective response. Germans take justifiable pride in the excellent quality of their industrial products, which produced yet another record trade surplus of €215 billion in 2014, second only to China. Yet, large balance of trade surpluses in Germany mean that other European countries are running large balance of trade deficits, which exert downward pressure on those other economies. The counter that other countries should attempt to be more like German industry rings only partially true. Once again, Germany is itself not adhering to European rules in that a trade surplus of 7.4 percent of GDP well exceeds the target cap under the Macroeconomic Imbalance Procedure. Even worse, that cap was set abnormally high as, on the flip side, euro zone countries are not supposed to run trade deficits greater than 4 percent of GDP. The very rules build in and sanction a balance of trade advantage to Germany. This advantage is enabled not just by German industrial competitiveness but by the fact that the euro confers a much more favorable exchange rate than were Germany still operating under its own independent Deutsche Mark. This fact has led some commentators to brand Germany a stealth currency manipulator and even for the country itself to be removed from the euro zone.

Told ya: Exports decline 1.5% in September, imports at record levels, signaling GDP of 3.5% will be revised lower

And to think just five days ago our masters of deception had no idea this was coming. As usual, this was unexpected.

Reported here:

The U.S. trade deficit unexpectedly widened in September as exports hit a five-month low, suggesting slowing global demand could undercut economic growth in the final three months of the year. ...

September's shortfall in the overall trade balance is bigger than the $38.1 billion deficit that the government had assumed in its advance gross domestic product (GDP) estimate for the third quarter published last week. This suggests the 3.5 percent annual growth pace it estimated will probably be trimmed when the government publishes its revisions later this month. Trade was reported to have contributed 1.32 percentage points to GDP growth. Exports in September fell 1.5 percent to $195.59 billion, the lowest since April, a sign that weakening demand in key markets such as China and the euro zone was starting to weigh. ...

Apart from slowing global demand, export growth is seen crimped by a strong dollar, which has so far this year strengthened by about 4 percent against the currencies of the country's main trading partners. ...

Consumer goods imports, however, were the highest on record, as were non-petroleum imports. Imports from China also hit an all-time high, leaving the politically sensitive trade gap at $35.6 billion, the highest on record. Imports from Canada were the highest since July 2008.

The World Currently Owes Japan Approximately $3.23 Trillion

At an exchange rate of 77.87 yen to the dollar:

Japan’s current-account surplus has meant that it hasn’t needed to rely on foreign capital to finance its budget deficits, unlike the U.S.  Foreign buyers hold about less than 10 percent of the public debt, compared with almost half for the U.S. Yields on 10-year Japanese government bonds were at 1 percent, among the world’s lowest.

A legacy of years of trade surpluses has left Japan as largest net holder of external assets, a position it had for a 20th straight year in 2010, with a position of 251.5 trillion yen, according to the finance ministry. Figures for 2011 are due in May. China is second-largest, according to the ministry.

Japan has moved into trade deficit for the first time since 1980, according to the story at Bloomberg here.