It won’t be long now. We’re in the last week of the interregnum and this brave new experiment that the electorate decided to take is showing every single sign of blowing up not only massively but quickly. Donald Trump is mad with power and he’s revamping everything in government to suit his ego and his whim. He’ll start with an Inauguration rally on the 19th, a first. Nobody knows what the purpose of the rally is, but since the last rally he did in D.C. was the same day as the Capitol riot, maybe it’s along those lines, revving the cult to do something crazy. Or, maybe the rally is to pitch this latest economic fantasy and then who knows what his Inauguration speech will contain? Everybody is playing all of this by ear. Nobody knows what Trump is up to, probably because he’s playing it by ear.
Maybe, just maybe — putting our economy in the widdle hands of a six-time bankruptee (for the second time) wasn’t such a good fucking idea huh?
— Jo (@JoJoFromJerz) January 14, 2025
Between the lines:Â Customs and Border Protection currently collects tariffs at points of entry. It’s unclear if Trump intends to create a new government entity to replace CBP.
- The Trump transition team did not immediately return requests for comment.
The intrigue: Though Trump insists foreign countries pay when the U.S. levies tariffs, in fact importers pay the tariffs when they bring goods in.
- Economists fear massive, negative market reactions if Trump follows through with threats to impose broad, heavy tariffs on U.S. trading partners.
That’s the broad overview of this thing. And it gets significantly worse, like truly wreaking havoc on world markets. This is a no win scenario but Trump thinks he can spin it effectively.
The fine print:Â If Trump wants to move faster and more expansively, he might consider invoking the International Emergency Economic Powers Act of 1977.
- It gives the president wide-ranging powers in an emergency, but has not been used to implement tariffs before. So there is uncertainty as to whether invoking the act to apply across-the-board taxes on U.S. imports would hold up in court.
What to watch:Â Speedier tariffs could also mean speedier retaliation from major allies that might take a huge toll on domestic producers.
- If U.S. tariffs are broad-based, retaliation might follow suit. For instance, Canadian officials are already readying tariffs as high as 25% on nearly everything America sends to its neighbor to the north, Bloomberg reports.
- Similar across-the-board responses from other major economies would make the 2018 trade war look minuscule. Back then, countries hit back with tariffs that would hurt red-state economies, like soybeans or bourbon whiskey.
- “You could anticipate all kinds of secondary and tertiary effects as this unwinds and the U.S. trying to minimize the cost to our exporters,” says Ann Harrison, a University of California, Berkeley economic professor and former World Bank official.
Editor’s note: This story has been corrected to note that the International Emergency Economic Powers Act has not been used to implement tariffs before.
The volatility of this cannot be overstated. There have been “dueling press leaks suggesting both the emergency declaration option and more limited tactics are in play.” So clearly, Trump himself hasn’t figured out what he wants to do yet. The net effect, and the reason he’s doing this, is to line the pockets of his billionaire buddies and himself, while creating a smokescreen that something new and revolutionary is being done on behalf of the people. That’s the play for the next four years.
Follow the money, figure out how Trump and his pals can benefit, and then look to see how the lie to the American people is being packaged, and you’re there.
What they’re saying:Â “Markets would freak and I think the real world would freak,” said Scott Lincicome, a trade scholar at the Cato Institute. “You’re talking about substantial price increases that would show up quite quickly.”
- “It strikes me as politically fraught for a president who won because of inflation to suddenly be sitting on top of Trumpflation 30 days into his presidency,” he adds.
- “I can’t imagine the president tariffing guacamole right before the Super Bowl,” Lincicome said. (Most U.S. avocados are imported from Latin America.)
It’s trial balloon time. Trump has it up there to see who does what with it. The plan he’s outlining is batshit like all his other plans and he’s just testing the waters to see what the blow back is.
But expect this level of grandiose promise to be the norm. His dementia has progressed to a level where he needs ever increasing doses of dopamine and adulation to function and so you will routinely hear about global redefinition on a daily basis.
And of course the GOP will go on right-wing media and declare the brilliance of it all, as legitimate economists predict financial armaggedon. The rest of the world is watching this with their jaws dropped.
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Maybe one of DOGE’s first tasks at eliminating government waste will be to eliminate the External Revenue Service as redundant and unnecessary.
Stupid is as stupid does. Forrest Gump
we already collect tariffs and duties. From our citizens. If you have ever brought in a significant purchase from a foreign trip, you know who pays. This goddamn fool won’t let go of his fantasy that other countries are going to pay us somehow.