Is Trump Playing the Hokey Pokey or "Let's Make a Deal" with his Tariff Policy?
You put your right foot in,
You put your right foot out,
You put your right foot in,
And you shake it all about.
You put your auto industry in peril …
You take your farmers’ livelihoods out,
You put your steel industry in jeopardy…
And your world alliance in doubt…
Aerospace? Arms sales? The rules-based international order and century-long carefully constructed world alliance? All your friends have backed out.
You do the hokey-pokey,
And turn your economy inside out.
Getting Trump’s gargantuan ego fed in the news every day
Is what it’s all about.
“‘Tariff’ is the most beautiful word in the dictionary. If I'm going to be president of this country, I'm going to put a 100, 200, 2,000% tariff.” -- Trump Speaking at the Economic Club of Chicago
It didn’t take long for Donald Trump to make good on his promise to gamble two and a half centuries of US financial and geopolitical hegemony on his high-risk, low-chance tariff stratagem, wagering not his money but the equity of 250 years of savvy economic management and the savings and finances of 341 million Americans on a …. what? We can’t call it a “plan.” We can barely even call it a “concept of a plan.” —every serious Economist says has no chance of working.
In Case of Fake Emergency, Pull Glass
Tariffs, of course, are constitutionally the responsibility of the American Congress, not the President. Knowing that he would never have been able to get Congress to pass bills that attacked not only America’s closest neighbours but also its own farmers, industry and tourism industry, Trump just illegally went around Congress.
Because that’s what authoritarians do.
Hitler's rise to dictatorial power was significantly aided by the declaration of emergency powers following the Reichstag fire on February 27, 1933. The day after the fire, President Hindenburg signed the Emergency Decree for the Protection of the German People, which suspended several civil liberties and allowed the government to take preventive measures against perceived threats to public safety and order.
This decree was a pivotal step in Hitler's consolidation of power. On February 28, Hindenburg also signed a decree giving Hitler emergency powers, which effectively allowed the Nazi government to rule by decree. The Enabling Act of March 23 granted Hitler the authority to enact laws without the involvement of the Reichstag or President Hindenburg, essentially transforming the Weimar Republic into a totalitarian dictatorship.
Fast forward to 2025.
Today, President Donald J. Trump declared that foreign trade and economic practices have created a national emergency, and his order imposes responsive tariffs to strengthen the international economic position of the United States and protect American workers.
Large and persistent annual U.S. goods trade deficits have led to the hollowing out of our manufacturing base; resulted in a lack of incentive to increase advanced domestic manufacturing capacity; undermined critical supply chains; and rendered our defense-industrial base dependent on foreign adversaries.
President Trump is invoking his authority under the International Emergency Economic Powers Act of 1977 (IEEPA) to address the national emergency posed by the large and persistent trade deficit that is driven by the absence of reciprocity in our trade relationships and other harmful policies like currency manipulation and exorbitant value-added taxes (VAT) perpetuated by other countries.
Using his IEEPA authority, President Trump will impose a 10% tariff on all countries. This will take effect April 5, 2025 at 12:01 a.m. EDT.
President Trump will impose an individualized reciprocal higher tariff on the countries with which the United States has the largest trade deficits. All other countries will continue to be subject to the original 10% tariff baseline.
— www.whitehouse.gov , April 2, 2025
To What End?
Trump’s goal, he says, is to bring the US back to a mythical “Gilded Age” that last existed two centuries ago.
“We were at our richest from 1870 to 1913. That's when we were a tariff country,” -- Donald Trump
In Trump’s idealized framing, the United States was at its zenith in the 1890s, when top hats and shirtwaists were fashionable and typhoid fever often killed more soldiers than combat. It was the Gilded Age, a time of rapid population growth and transformation from an agricultural economy toward a sprawling industrial system, when poverty was widespread while barons of phenomenal wealth, like John D. Rockefeller and J.P. Morgan, held tremendous sway over politicians who often helped boost their financial empires. — The Public Broadcasting Service
Surely, all this would demand a well-planned out and considered plan, something an “enlightened dictator,” a “master negotiator,” someone fully in command of “the art of the deal,” has thoroughly planned and gamed out, providing the certainty and guidance needed for business and economic leaders to react to this fundamental change that would take decades for companies to adjust to and build factories before it could come to fruition.
Nope. It’s just all seat-of-the-pants, ever-changing, no end-game, spitball “deals” that seemingly depend on what Trump’s golf scores were that day.
Let’s Make a Deal!
In order for tariffs to work, they’d need to be clear, consistent and permanent.
Trump’s tariffs are the opposite of that. His inclusions, exclusions and rates bounce around like a rigged golf ball on one of his golf courses. Not even his own administration can explain them, much less industry, which is somehow expected to make trillion-dollar decisions based on edicts that may be invalid tomorrow.
Jan 20, 2025: President Trump issues a memorandum titled "America First Trade Policy," outlining immediate trade priorities for his administration.
Jan 27: Trump announces intent for new tariffs on semiconductors and pharmaceuticals.
Feb 1: Signs executive orders imposing 25% tariffs on all goods from Mexico and Canada based on border security and fentanyl concerns. He imposes a 10% tariff on all imports from China.
“ Much has been said over the last three months about Mexico and Canada. But we have very large deficits with both of them. But even more importantly, they have allowed fentanyl to come into our country at levels never seen before, killing hundreds of thousands of our citizens and many very young, beautiful people, destroying families. Nobody’s ever seen anything like it. The fentanyl coming through Canada is massive.” — Trump
FACT CHECK: In fiscal 2024, 43 pounds of fentanyl were seized at the northern border, according to Customs and Border Protection data. More than 21,000 pounds were seized at the Mexican border during the same time period.
"We don’t need energy from Canada. We don’t need lumber from Canada. We don’t need anything from Canada. I believe this will be the golden age of America. We have our own lumber and energy. We don’t need energy from Canada. We don’t need lumber from Canada. We don’t need anything from Canada." — Trump, on Air Force One
[Someone tells Trump that 60% of all US gasoline comes from refined Canadian heavy crude and that US can’t refine any other kind.]
(Oops! Did I say 25%? I meant only 10% on Canadian oil and energy exports, which we don’t need at all).
[someone tells Trump US farmers can’t fertilise their crops without Canadian potash]
[Potash! Dope-smoking Canucks! What do we need their cannabis ash for? Oh, it’s fertiliser? And we don’t have any? Things won’t grow without it? Okay … only 10% on that, too, because we don’t need it at all.]
Feb 4: Tariffs on Mexican and Canadian goods take effect.
[Oh crap! I forgot steel and aluminum. Even though we don’t need those either. I must have been using my carbon-fibre and titanium clubs that day. Oh, hell. Let’s just tariff the entire world on this one. Kid Rock is waiting for me in the clubhouse.]
Feb 10: Announces a 25% tariff on all steel and aluminum imports, affecting all trading partners without exceptions.
Feb 13: President Trump signs a memorandum directing a plan for "reciprocal tariffs" in response to other countries' trade practices, with recommendations due April 1.
Feb 14: Trump announces planned auto tariffs to begin April 2 (25% rate indicated).
Feb 18: Announces rates for semiconductors and pharmaceuticals (“25% and higher”).
Feb 26: Announces plans to impose a 25% tariff on goods imported from the European Union (EU).
Feb27: Announces an additional 10% increase in tariffs on China, set to take effect on March 4.
March 4: The initial US tariffs on Canada and Mexico take effect after a 30-day delay. The additional 10% tariff increase on China by the US takes effect, bringing the total tariff on all Chinese imports to 20%.
[CRAP! The stock market is circling the drain, all my rich friends tell me they’re going to lose a shitload of money, and my Congress members are getting their ears burnt off in town hall meetings. Run away! Run away]
March 6: The US delays tariffs indefinitely on goods compliant with the The United States-Mexico-Canada Agreement (USMCA) from Canada and Mexico.
"President Donald J. Trump is the greatest hostage negotiator that I know of in the history of the United States." — then-Special Presidential Envoy Robert O'Brien
March 12: The US imposes 25% tariffs on all imports of steel and aluminum, renewing and increasing tariffs from 2018, now including Canada and Mexico despite USMCA. The EU announces retaliatory measures.
March 13: Canada announces retaliatory tariffs.
Mid-March: The EU threatens additional tariff measures.
Late March: In response, the US threatens upcoming "secondary tariffs" on countries.
[Shit! Cars! Who could have imagined that I would forget about cars? Really, it’s understandable when the only thing I know how to drive is a golf cart.]
March 26: The US announces a 25% tariff on all automobile imports, worldwide.
[now we’re cooking! I really showed those Canadians, Germans and Asians, didn’t I? We don’t need their stinking cars.]
With 25% tariffs, most North American-assembled models could increase by $4,000 to $10,000 per vehicle. Prices for fully electric vehicles, which rely heavily on imported batteries and electronics, could increase up to $12,200. An additional $250 to $2,500 per vehicle from 25% tariffs on steel and aluminum could affect nearly all models. — Anderson Economic Group
"No one creates leverage for himself like President Trump." Senior Trump Advisor Stephen Miller.
April 2: Declares "Liberation Day," announcing a "reciprocal tariffs" under IEEPA, imposing a baseline 10% tariff on goods from all countries starting April 5, with higher rates (11% to 50%) for 57 specific countries starting April 9.
Except it wasn’t even tariffs that were being measured. It was trade deficits.
President Trump described the tariffs as reciprocal, equal to half of the rate of tariffs and non-tariff trade barriers imposed by other countries. However, they are nothing of the sort. The tariff the United States is placing on other countries is equal to the US trade deficit divided by US imports from a given country, divided by two, or 10 percent, whichever rate is higher. So even if the United States has no trade deficit (or a trade surplus) with a country, they still receive a minimum tariff of 10 percent. Our view is that the formula the administration relied on has no foundation in either economic theory or trade law — American Enterprise Institute
Even without the error, the formula was dubious, conservative think tank says. “The formula does not make economic sense. The trade deficit with a given country is not determined only by tariffs and nontariff trade barriers, but also by international capital flows, supply chains, comparative advantage, geography, etc.”
The “formula” resulted in such absurdities as 10% tariffs being imposed on Antarctic islands inhabited only by penguins.
Given that the Trump administration’s tariffs were billed as reciprocal tariffs, analysts and investors had expected they would be based on a careful examination of a country’s trade and non-trade barriers with respect to American-made goods. Instead they were based on the formula, which the Washington Post reports President Donald Trump personally insisted on using.
Kentucky Republican Senator Rand Paul mocked President Donald Trump’s unusual perspectives on international trade, deficits and tariffs, calling them “backwards and upside down.” “It’s “based on a fallacy," Paul said in a CNBC interview from the Capitol. The fallacy is this: that somehow in a trade, someone must lose, that somehow when you trade with someone, there's a loser and someone's taking advantage of you, and China's ripping you off or Japan's ripping you off. It’s not a ripoff, it’s a purchase, and the U.S. has been powerful and wealthy enough to be able to purchase just about anything it wants from any country it wants, and that’s not a bad thing. Every trade that occurs in the marketplace is mutually beneficial. If we’re in a free society and you want to sell me your coat and I give your $200 for it, we both agree to it and we’re both happy with the trade. You could artificially do this accounting between countries and say, oh, trade deficit. Look at this trade deficit. But I have a trade deficit with my grocery store.”
If trade deficits were by definition negative, the answer to stopping them would be simple. No one is forcing you to buy another country’s goods. You don’t have to put tariffs on them. You can just stop buying them.
Nor do trade deficits numbers include a vital part of actual trade — services — for which the US regularly runs surpluses.
April 3: 25% tariff on auto imports takes effect. Details emerge suggesting higher reciprocal tariffs for specific countries based on trade deficits, with China facing a potential 34% reciprocal tariff on top of existing tariffs.
April 3: Stock markets crash in response. The Nasdaq Composite drops 5.97%, marking its worst sell-off since the COVID-19 pandemic. The S&P 500 falls 6.65%, nearly triggering a trading halt. The Dow Jones Industrial Average drops 3.98%.
April 4: The Dow plunges another 5.5%; the S&P 500, 5.97%; the Nasdaq 5.8%, entering bear market territory.
“When a country (USA) is losing many billions of dollars on trade with virtually every country it does business with, trade wars are good, and easy to win … we win big. It’s easy!” -- Donald Trump
Over two days, the U.S. stock market loses nearly $5 trillion in value, marking the largest two-day loss in history.
"The master negotiator strikes again." — Republican Majority Whip Tom Emmer
April 5: The 10% universal baseline tariff on imports from most countries take effect.
April 7: Additional 50% tariff on China (effective April 9) announced. Stocks plunge further, with three-day losses the worst since Black Monday.
Goldman Sachs increases its estimate of the likelihood of a U.S. recession within the next 12 months to 45%, up from 35% the previous month. The firm cites tightening financial conditions and heightened policy uncertainty stemming from the new tariffs as primary factors contributing to the increased risk.
Torsten Sløk, Chief Economist at Apollo Global Management, states that there is a 90% chance of a "Voluntary Trade Reset Recession" if the tariffs remain in place
[must do something about financial markets; no one outside of brainwashed Republicans believe in my genius.]
April 9: Higher tariffs on 57 countries scheduled to take effect. 90-day pause on reciprocal tariffs for all except China; higher tariffs for 57 countries scheduled but suspended.
[the US bond market crashed! Who could have predicted that? Distraction … I need a distraction … I know … blame the Chinese … it worked during Covid , didn’t it? Or I can just kick the can down the road and everyone will forget about it]
April 9: Tariffs on Chinese goods are increased to a total of 145%, including a 20% "fentanyl tariff."
[watch this! I’m Master of the Deal. They’ll come running in from the rice paddies with their funny conical straw hats in hand]
April 10: China responds by imposing a 125% tariff on US goods coming into China. The EU's reciprocal tariffs are delayed until July 9.
Commerce Secretary Howard Lutnick makes comments on CBS's Face the Nation suggesting that iPhones would be manufactured in the U.S., with Americans screwing in screws to make them, but he later clarified that these tasks would be automated, with Americans maintaining the machines instead.
[US-made iPhones will cost $3000? Shit! Run away! Run away!]
April 11: Trump exempts certain electronics from reciprocal tariffs.
President Donald Trump acknowledges that his tariffs could result in fewer and costlier products in the United States, saying American kids might “have two dolls instead of 30 dolls,” but he insists China will suffer more from his trade war.
[Ninety deals in ninety days. That’s the ticket. I’ll tell everyone that that’s the plan and the world is lining up to make deals.]
Former President Donald Trump claims in an April 2025 interview with Time magazine that he has negotiated "200 deals" on tariffs, asserting that these agreements would be finalized within three to four weeks. He also stated that he had received a call from Chinese President Xi Jinping regarding trade discussions. "He's called. And I don't think that's a sign of weakness on his behalf," Trump said.
Chinese officials deny any discussions with Trump, and U.S. administration sources indicate that no such agreements have been concluded. Critics note that the number of claimed deals exceeds the total number of countries in the world.
[China is so desperate they don’t even know they’re already working on a deal.]
“Let me make it clear one more time that China and the U.S. are not engaged in any consultation or negotiation on tariffs, let alone reached an agreement.” ” — Chinese Foreign Ministry spokesman Guo Jiakun
"Any claims about the progress of China-U.S. trade negotiations are groundless as trying to catch the wind and have no factual basis," — Ministry of Commerce spokesman He Yadong
"If war is what the U.S. wants, be it a tariff war, a trade war or any other type of war, we’re ready to fight till the end," Ministry spokesperson Lin Jian he statement.
May 3: 25% tariff on auto parts take effect. Car plants begin to shut down and lay off workers.
"Tariffs are actually, we've had a lot of experience with 'em. It may not draw blood immediately but make no mistake—it's an act of aggression that invites retaliation. They're an act of war." — Warren Buffet, the Oracle of Omaha, CBS News interview.
[Someone reminds Trump it took three years to agree for just Canada and Mexico to negotiate “his” USMCA deal (the “greatest in history”) which is now, according to him, the dumbest in history. Trump goes golfing.]
Problems. Problems. Let Us Count the Ways
America Alone
The Trump tariffs are not going to make America “first,” they’re going to make America “alone.” Outside of the States, MAGA is increasingly coming to mean “Make America Go Away.”
In a world where the US makes up only 4% of the population and US trade comprises only 11% of the global total, this is a problem.
Canadian Prime Minister Mark Carney declared that the traditional, post-World War II relationship of economic integration between Canada and the United States was "over." “President Trump is trying to break us, so that America can own us. That will never, that will never, ever happen. Our world has fundamentally changed. Canada’s old relationship with the United States, its longtime ally and trading partner, is ‘over.’ We are over the shock of the American betrayal, but we should never forget the lessons. We have to look out for ourselves.”
After US Vice-President JD Vance delivered a speech at the Munich Security Conference in Europe, commentators called it a watershed moment, the beginning of the end for the transatlantic alliance, and that going forward, the EU and the US were no longer friends and allies but necessary partners only.
“This is not the act of a friend.” — Australian Prime Minister Anthony Albanese
Neither Fish Nor Fowl
The biggest problem with the Trump tariff strategy is that their stated goals directly contradict each other.
Tariffs can’t both create permanent domestic jobs and be a temporary negotiating tool.
The two stated goals of tariffs as a permanent policy versus a short-term negotiating tactic have completely opposite aims. Trump has repeatedly said that tariffs are a long-term strategy intended to re-shore American manufacturing from places like China, Vietnam, South Korea, and Mexico.
And yet, somehow, as soon as Trump abandoned or delayed some of his tariffs when the stock and bond markets crashed, his press secretary described the move as “The Art of the Deal,” implying that they were always intended to be nothing more than a short-term negotiating tactic to force other nations to the bargaining table.
Her argument might have been more persuasive if any of those partners had actually offered any trade concessions before Trump caved. Trump had unleashed a global economic meltdown and won nothing in return.
More importantly, Trump’s constant “hokey-pokeying” of tariffs — on this day, off the next, at this rate initially, then soon another — forego any hope of any industry investing in new factories in America.
No business is going to invest hundreds of millions of dollars and spend five years building a factory that will need to operate for 50 years in order to make it profitable if the underlying trade economics change every time Trump has a bad golf score.
Tariff, tax and regulatory policies may be helpful or hurtful, but they at least must be predictable.
Tariffs can’t both protect domestic industries and generate trillions of dollars in revenue.
Even more contradictory is Trump’s promises that tariffs can build a trade wall around America while also raising trillions of dollars in tax revenues to replace the income tax. Tariffs can either lock out imports or collect revenues from them, but they cannot do both.
Shippers, manufacturers and retailers are already loudly warning that shipping volumes are way down.
“According to our own port optimizer, which measures the loadings in Asia, we’ll be down just a little bit over 35% next week compared to last year. And it’s a precipitous drop in volume with a number of major American retailers stopping all shipments from China based on the tariffs. It’s a precipitous drop in volume with a number of major American retailers stopping all shipments from China based on the tariffs.” — Gene Seroka, executive director of the Port of Los Angeles
“Like back during Covid where we had shortages of toilet paper, we are going to start seeing that in more and more goods. Starting in a couple of weeks, we are just going to start running out of stuff, and if the administration waits to resolve the problem until we have shortages and hoarding, that is just too late.” — Sean Stein, president of the U.S.-China Business Council.
A tariff cannot raise revenues from imports if those goods are no longer being imported.
Add in the necessary “bail out” packages for export-hammered industries like agriculture and it makes even less economic sense.
No One Trusts Trump Not to Break Even His Own Deals Anyway
Trump breaks his own deals. That’s a given.
He made a huge deal of the United States-Mexico-Canada Agreement (USMCA) trade deal when he himself negotiated it.
“The USMCA is the fairest, most balanced, and beneficial trade agreement we have ever signed into law. It’s the best agreement we’ve ever made. This landmark agreement will send cash and jobs pouring into the United States. ” — Donald Trump, 2020
Fast forward to 2025, when he imposed multiple levels of tariffs (which are illegal under the deal) on Mexico and Canada. Suddenly, the very deal he negotiated and praised is “unfair.”
"I mean, who can blame them if they made these great deals with the United States, took advantage of the United States on manufacturing? I look at some of these agreements, I’d read them at night, and I’d say, ‘Who would ever sign a thing like this?’" — Donald Trump, White House press conference, February 2025
Who would sign such a deal indeed? Well, you did, Donald.
You can bet no one is going to trust you’ll honour any of your own deals anymore, too.
Let’s Make a Deal! Zonk!
Trump’s tariffs as they are presented are more a version of the "Let's Make a Deal" audience-participation game show than they are a consistent, well-thought-out economic policy.
The show centered around audience members making deals with the host, Monty Hall, for unknown prizes, often hidden behind curtains or in boxes. Hall would approach audience members and offer them “a deal.” This usually involved trading a personal item they already had for the chance to win something much better, like a car or an expensive vacation. The flip side was that the trade could result in you getting something utterly ridiculous and of no value instead, called a "zonk," like a year's supply of canned prunes or a live donkey.
The show typically involved multiple rounds of deals, with the stakes often increasing as the show progressed. A “zonk” meant losing everything gained up to that point.
Sound familiar?
Is Trump Playing Hokey Pokey or Let’s Make a Deal?
So, is Trump Playing Hokey Pokey or Let’s Make a Deal?
The problem is even Trump doesn’t know.
The problem is he that he’s lousy at both.
The problem is he’s gambling your safety, security and financial future without having any of his own skin in the game.
The problem is that a man who bankrupted three casinos can’t win even when the house always wins.
King Can’t Do
Enlightened dictatorships have often been said to be the best form of governance.
But what happens when the dictator isn’t enlightened?
Like a fat man trying to tuck in his shirt at the Saturday dance, Trump can’t hide the mess he is making of what was considered not only the strongest economy in the world when he came into power, but perhaps the strongest in world history.
Two Cautionary Tales of Unchecked Power: Phaethon and King Canute
Phaethon
The most famous story of someone who thought he was omnipotent comes from Greek mythology, featuring Phaethon. Phaethon was the son of the sun god Helios. To prove his godhood, he demanded his father to let him drive the chariot of the sun across the sky for a single day.
However, Phaethon was too weak and inexperienced to control the powerful, fiery horses that pulled the chariot. He lost control, veering wildly across the heavens. At times, he flew too close to the Earth, scorching it and turning vast regions into deserts. At other times, he flew too high, causing the Earth to grow cold.
To prevent further catastrophe, Zeus, the king of the gods, struck Phaethon down with a thunderbolt, and he fell to his death into the river Eridanus.
King Canute
King Canute was a powerful 11th century North Sea ruler famous for allegedly claiming he was so powerful that he could control the tides.
The truth is exactly the opposite of that. The truth is that what he really did was take the courtiers claiming his omnipotency down to the coast, where he proceeded to prove the exact opposite, that he couldn’t. He showed his wisdom by recognising the limits of his power, something an enlightened dictator would naturally do.
Enlightened Dictatorship (Not)
So, enlightened dictatorship is the best form of governance.
But what happens when your dictator isn’t enlightened? What happens when he’s just a genius? A “stable genius?” What happens when you get the dictator without the enlightenment?
You get this pile of stinking … whatever it is that comes from stables.
Like all dictators, Trump desperately needs a real shooting war to distract from the shit show he’s created at home. Iran anyone?
(By the way, the man running the “Let’s Make a Deal” show, Monty Hall, was Canadian.)
(Zonk! )