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Andrew Tobias
Andrew Tobias

Money and Other Subjects

Trade Wars And Real War

April 3, 2025

Nobel-prize winning economist Paul Krugman:


Trump Goes Crazy on Trade

The EU, like the United States, has generally low tariffs; the average tariff it charges on US goods is less than 3 percent.

So where does [Trump’s] 39 percent number come from? I have no idea. Many people speculated that Trump would count value-added taxes as tariffs, even though they aren’t — European producers selling to the EU market pay the same VAT as US producers, so it doesn’t discriminate and therefore isn’t protectionist. But even if you get that wrong, EU VAT rates are in the vicinity of 20 percent, so you still can’t get anywhere close to 39 percent.

. . . [H]aving once claimed that Europe charges tariffs more than 10 times as high as reality, Trump will never drop that claim. I don’t know how many people noticed, but he’s still claiming that we’re subsidizing Canada by $200 billion a year. Aside from the basic mistake of claiming that a Canadian trade surplus means that we’re somehow subsidizing Canada, he’s inflating the actual trade surplus by a factor of three. Many, many people have pointed out the error, but Trump is sticking with it, the same way Musk is sticking with the millions of dead Social Security beneficiaries thing.

If you had any hopes that Trump would step back from the brink, this announcement, between the very high tariff rates and the complete falsehoods about what other countries do, should kill them.


It’s one thing to want to bring critical semiconductor manufacturing back to America (especially now that we have no allies) — that was called Biden’s bi-partisan CHIPs Act.

It’s quite another to start a global trade war that makes everybody hate us and could set off a global recession or worse.

(And are there really 100 million Americans looking for work making t-shirts, sneakers, and all the other low-wage stuff we import?  Aren’t we in the midst of deporting the few who might?)




And then there’s Iran — and Greenland.

Malcolm Nance thinks we’re going to war.


If you thought things were bad in the American national security sphere in the last 48 hours, be prepared for another dramatic shift in US policy that will affect every one of you reading this. Apparently, the Trump regime is preparing for two major blows to US foreign policy. They are making it clear they intend to invade and seize Greenland and they are also silently preparing to attack Iran with strategic bombers. . . .


He sees oil “quite possibly topping the $150 a barrel mark.”

“Worse, is that the Iranian people who have been desperate to break off the chains of the regime and embrace democracy would likely see an American Israeli attack as a provocation. At attack would rally around the regime and set back a decade’s work fostering democracy.”

Let’s hope Nance is wrong.  Or that it all somehow works out well.  When has a Trump enterprise ever failed?

 

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