Barackface: 30: Trade War: Lost?

Thursday, October 30, 2025

30: Trade War: Lost?

How We Lost the Trade War Tariff uncertainty may be waning, but the damage will persist ............ A little over six months ago Donald Trump shocked the world by announcing a huge jump in tariffs, to levels not seen since the 1930s. Most of these tariffs were clearly illegal and have been so ruled by lower courts — but it’s anyone’s guess how an extremely submissive Supreme Court will rule. .............. With his plunging poll numbers at home ......... even within the Republican Party, his tariff policies are in trouble, with 52 Senators voting against the Brazil tariffs and farm-state Senators showing anxiety over China’s moratorium on American soybean purchases. .......... we may be reaching peak Trump tariffs. ............ Trump’s chaotic tariff policies inflicted three types of economic damage: higher prices for American producers and consumers, economic uncertainty, and the global loss of American credibility. Even if the worst in terms of prices and uncertainty is over, it’s clear that Trump’s tariffs have inflicted lasting damage on the US economy as well as the global economic order. ........ a significant bump in the prices of imported goods, especially compared with their declining trend BT (before Trump). In a new paper, the Pricing Lab analyzes its data and estimates that the Trump tariffs have raised overall consumer prices by 0.7 percent. ........ The Trump administration would like you to believe that foreigners are paying the tariffs. ........ foreigners have not, in fact, absorbed any significant share of the tariffs. ........... U.S. businesses are holding back on raising prices, absorbing the cost rather than passing it on to consumers. Since this can’t go on forever, that would suggest considerably more inflation in the pipeline. .......... the jump in tariffs has been much smaller in practice than on paper ......... Why have tariffs lagged in practice? Trump’s tariff scheme is wildly complex, with very different rates depending on which good is being imported from which country. This creates a lot of opportunities for importers to hold down what they pay by managing to get their products reclassified. ..........

Even under the Trump tariffs, most goods from Canada can enter duty-free if they’re “USMCA compliant”

— that is, they qualified for zero tariffs under the free-trade agreement formerly known as NAFTA, rebranded but barely changed in practice during Trump’s first term. ................ In 2024, only 38 percent of U.S. imports from Canada entered under the USMCA. ....... In June 2025, 81 percent of imports from Canada entered duty free. Not incidentally, this points to a hidden cost of the tariffs: Companies are incurring significant administrative costs to deal with a vastly more complex tariff system. ............. Goods from countries that are the subject of high tariffs may be laundered, transshipped via countries facing lower tariffs. Exporters may find ways to relabel what they sell, to qualify for lower rates. There’s surely some fraud involved — how could there not be, given the incentives? — but in any case the bottom line is that in practice tariffs haven’t gone up as much as you might have thought. And I don’t see any obvious reason to believe that tariff avoidance will go away. It will probably be a quasi-permanent feature of the system. ........... The Trump tariffs were supposed to bring about a revival of U.S. manufacturing. That’s obviously not happening so far: Manufacturing employment is down, partly because some of Trump’s tariffs, notably on steel and aluminum, have substantially raised producers’ costs .................... The most striking thing about the labor market, however, isn’t large-scale job loss. It is, instead, the way the market has frozen, with very low rates of hiring. .............. wage gains have slowed sharply across the board, with young workers seeing the slowest wage growth since 2011. Against the background of accelerating inflation, this is a serious blow to U.S. workers. ........... Trump’s Asia tour appears likely to yield some stability in the tariff picture, with America reducing some of the extremely high tariffs it has imposed or threatened to impose, while Asian nations make vague promises to invest in the United States and buy more U.S. products. .............. Soon, I expect,
Trump will be declaring victory after performing a climb-down on tariffs and touting make-believe investment numbers.
He will proclaim that he won the trade war. Well, he didn’t. ........... The main benefit from these deals (assuming they happen and last for a while), is that the United States will stop hitting itself in the face. U.S. consumers, producers and workers have been the main victims of Trump’s tariffs. We could have achieved victory by not hitting ourselves in the face in the first place. ............ ........ these deals cannot fix the more profound damage that six months of tariff madness has inflicted: the incalculable damage to U.S. credibility and, with it, to the global world economic order. ............. First, everything — everything — Trump has done on trade has, in addition to its illegality, been a violation of past U.S. agreements with other countries. So we emerge from the trade war as a nation that can no longer be trusted to honor its promises. ............ Second,
if we look at the confrontation with China in particular, the end result looks like a demonstration of U.S. weakness and Chinese strength.
China may offer some cosmetic concessions, promising to buy some soybeans or whatever. But the reality — which is obvious to everyone in the world except, possibly, some U.S. voters — is that Trump threatened extremely high tariffs on China but climbed down when China began curtailing exports of rare earths and other industrial inputs. China had the upper hand, and it played it. .................... China is now clearly winning its geopolitical conflict with the United States. America used to be able to count on support from its democratic allies. Now it has alienated them, and established a reputation for arbitrarily reneging on agreements. America used to have unmatched economic leverage. Now the world knows that China has more.

The Five Ingredients of Zohran’s Secret Sauce Anyone who wants to lead America out of the Trumpian darkness can do so with these ......... and have seen some who are slick, some who are clever, some who are witty, some who are stiff, but rarely have I come across someone with as much authenticity as Mamdani. ............. his focus is indisputable and his ideas are clear and understandable. .......... He doesn’t hesitate to say he’ll raise taxes on the wealthy to pay for what average working people need. You might think this would be standard fare for Democrats, but it’s not. ............. New York City’s nearly four-decade-old clean elections system that matches small-dollar donations with public money, Mamdani has had nearly $13 million of government funds to run a campaign against tens of millions of dollars that corporate and Wall Street Democrats — and plenty of Republicans — have spent to boost Democratic former governor Andrew Cuomo. We need such public financing across the nation. ............

At a time when so many of us are drenched in the daily darkness of Trump, Mamdani’s positivity feels like sunshine. It lifts one up. It makes politics almost joyful.

......... his remarkable cheerfulness. Watch his face during our discussion. He smiled or laughed much of the time. This wasn’t empty-headed euphoria or “morning in America” campaign rubbish. It’s directly connected to a thoughtfulness that’s rare in a politician, especially one nearing the end of a campaign — who’s had to answer the same questions hundreds if not thousands of times. He exudes a buoyancy and hope that’s infectious. It’s
the opposite of the scowling Trump.