Trump Following His Gut In Trade Turmoil

So, here’s a question for you. Suppose you owned a company and interviewed two candidates for a vital leadership position that could determine the success or failure of your business. You ask both candidates the same question: how will you make strategic decisions to ensure the success of the company?

You would probably be looking for an answer like this: “I will assemble the best talent possible, task them with doing extensive research and making clear recommendations. Then I will employ thoughtful reasoning to come to a decision.”

You probably would not hire a candidate who answers like this: “I’ll put some people who are unquestioningly loyal to me in key positions and let them make recommendations or not, but basically, I’ll make decisions based on my intuition.”

His Gut Is A Really Big Influence

Easy choice, you say. Obviously, the second applicant is not qualified. We would never hire him. But, we did and gave him the job of being President of the United States. 

Donald Trump, never a slave to reading or research, declared last week that his global trade decisions will be made by his gut. Asked how he will make trade decisions, Trump told reporters:

“Instinctively, more than anything else. You almost can’t take a pencil to paper, it’s really more of an instinct than anything else.”

Punishing Penguins

Trump’s tariff designations were so thorough and well thought out that they even included places that have few or no human inhabitants. Take that, you penguins! (explanation coming)

The McDonald Islands and Heard Islands, on the fringe of Antarctica, were hit with 10% tariffs on April 2nd, like most countries. That in spite of having a combined human population of zero. However, there are an undetermined number of penguins on both islands. 

In the history of the world, there is no record of either island ever exporting anything to the United States for sale. In fact, there is no record of the inhabitants (penguins remember) ever manufacturing anything for foreign trade. Some say it is because Penguins do not have thumbs, making it difficult to hold tools. However, it could be a simple lack of ambition. 

Efforts to contact the penguins on both islands were unsuccessful. However, we understand that they are not talking anyway.

Conversely, some of the 2,188 humans on Norfolk Island, off the East coast of Australia, have been talking.

“Products from Norfolk Island are going to have a 29% tariff? Well, there is no product, so it’s not going to have an effect,” Tax consultant Gye Duncan told Reuters.

By the way, all three islands are protectorates of Australia – not sovereign nations.

Trade War Turmoil

Trump’s twisting and turning tariff actions are enough to make the most experienced roller coaster rider nauseous. Here is a refresher on the ride so far.

January

• 1/20 – Inauguration Day. Trump announces plans for 25% tariffs on Canada and Mexico by 2/1. He also says he will create an agency called the External Revenue Service. We are still waiting for that.

February

• 2/1 – Trump announces a 10% tariff on China and 25% on Canada and Mexico beginning 2/4.
• 2/3 – A 30-day pause on Canadian and Mexican tariffs is announced.
• 2/4 – 10% tariffs on China are implemented.
• 2/10 – New 25% steel tariffs are announced for 3/3.
• 2/25 and 3/1 – Trump directs the Commerce Department to consider exempting tariffs on copper and lumber.

March

• 3/4 – 25% tariffs go into effect for Canada and Mexico. However, the levy on Canadian energy has been dropped to 10%. The tariff on China has been doubled to 20%. All three countries threaten retaliation. China slaps a 15% tariff on U. S. farm exports.
• 3/5 – After a meeting with U. S. auto makers, Trump orders a 30-day exemption on automobiles and parts manufactured in Canada and Mexico.
• 3/6 – 30-day exemptions on various trade items from Mexico and Canada are announced.
• 3/12 – The U. S. imposes 25% tariffs on steel and aluminum. In response, the European Union (EU) implements new tariffs on U. S. goods. In addition, Canada announces more tariffs.
• 3/24 – A 25% U. S. tariff is announced on all imports from any country that buys oil or gas from Venezuela, effective April 2.
• 3/26 – Trump proposed a 25% tariff on automobile imports beginning 4/3. On 5/3, the tariff will be extended to foreign automobile parts.

April

• 4/2 – In what he dubs “Liberation Day”, Trump imposes 10% tariffs on all countries. Some are hit with higher tariffs, such as China, Vietnam, and of course, Norfolk Island.
• 4/4 – China announces a 34% tariff to counter Trump’s tariffs. In addition, it stops exporting rare earth minerals to the U. S. Those minerals are vital for use in America’s defense, automotive, and energy industries.
• 4/9 – The higher “Liberation Day” tariffs go into effect at midnight. However, hours later, the administration reverses course and announces a 90-day suspension of the highest tariffs. In contrast, tariffs are raised on China to a total of 125%. China, Canada, and the EU announce plans to hike tariffs on U. S. goods.
• 4/10 – The White House clarifies that the tariff on Chinese imports is 125%.
• 4/11 – Countering Trump’s tariff hike, China brings its tariff on U. S. imports to 125%.

Absolutely No Exceptions On Tariffs – Except Those Items That Are Excepted

Trump wavered on his tariff policy over the weekend. Friday, U. S. Customs and Border Protection announced a temporary halt to tariffs on many electronics, such as semiconductors, cell phones,  and computers. However, Trump clarified Sunday that tariffs on those goods were being reduced from 145% to 20%.

“There was no Tariff ‘exception’ announced Friday,” Trump posted online. “These products are subject to the existing 20%… Tariff, and they are just moving to a different Tariff ‘bucket’.”

These tariff reductions are significant for America’s tech sector because most of its products and components are manufactured in China. 

China’s Response

The Chinese government called Trump’s tariff reduction on electronics a “small step” and urged an elimination of all tariffs.

“We urge the U.S. to heed the rational voices of the international community and domestic parties, take a big stride in correcting its mistakes,” CNBC reported.  “Completely abolish the wrongful action of ‘reciprocal tariffs,’ and return to the correct path of resolving differences through equal dialogue based on mutual respect.”

Criticism of Trade Policy

China is not the only voice calling for an end to Trump’s tariff wars. Most economists, other countries, and a host of past government officials – including many from Trump’s first administration – have joined the chorus.

Perhaps one of the most conservative critics is former member of Congress Joe Walsh. With the reduction in tariffs of electronics made in China, Walsh took to X to post – “More exemptions, so the question remains: If tariffs are so great, why so many exemptions?“

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Max K. Erkiletian began writing for newspapers while still in high school. He went on to become an award-winning journalist and co-founder of the print magazine Free Bird. He has written for a wide range of regional and national publications as well as many on-line publications. That has afforded him the opportunity to interview a variety of prominent figures from former Chairman of the Federal Reserve Bank Paul Volker to Blues musicians Muddy Waters and B. B. King. Max lives in Springfield, MO with his wife Karen and their cat – Pudge. He spends as much time as possible with his kids, grandchildren, and great-grandchildren.