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   been provisionally reduced to 30 percent, but even after that climbdown,   
   the average tariff rate was 17.4 percent  the highest level of tariffs   
   since 1934, not much lower than the rate after the infamous Smoot-Hawley   
   tariff of 1930.   
      
   All indications are that these tariffs will do large economic damage, much   
   larger than pre-inauguration analyses predicted. Why will the damage be so   
   severe?   
      
   For one thing, theres a big difference between imposing 10 or 25 percent   
   tariffs on a few imports and imposing 10 percent on everything and 30   
   percent on everything one of our major suppliers of both consumer goods and   
   industrial imports produces. As I write this, West Coast ports are   
   reporting a sharp drop in ships arriving from Asia; in fact, the latest   
   report says that no container ships are departing China for America right   
   now.   
      
   The results of this collapse in trade could probably show up in a few   
   weeks, as inventories are exhausted. Well soon see soaring prices, quite   
   possibly empty shelves, and widespread layoffs  even bankruptcies  among   
   businesses that depended on the flow of goods from abroad, including   
   trucking companies, retailers, and quite a few manufacturers.   
   US President Donald Trump delivers remarks on reciprocal tariffs as US   
   Secretary of Commerce Howard Lutnick holds a chart during an event in the   
   Rose Garden entitled "Make America Wealthy Again" at the White House in   
   Washington, DC, on April 2, 2025. Trump geared up to unveil sweeping new   
   "Liberation Day" tariffs in a move that threatens to ignite a devastating   
   global trade war. Key US trading partners including the European Union and   
   Britain said they were preparing their responses to Trump's escalation, as   
   nervous markets fell in Europe and America. (Photo by Brendan SMIALOWSKI /   
   AFP) (Photo by BRENDAN SMIALOWSKI/AFP via Getty Images)   
   Liberation Day, when Trump declared worldwide tariffs, including islands   
   inhabited only by penguins.   
      
   BRENDAN SMIALOWSKI/AFP/getty images   
      
   Adding to this direct impact of tariffs is the huge uncertainty Trumps   
   tariff policy has created. If youve been following the story so far, you   
   know that on April 2  insanely dubbed Liberation Day by the president   
   Trump imposed huge tariffs on countries and territories around the world,   
   including islands inhabited only by penguins. Then a week later, he put   
   those tariffs on a 90-day pause, replacing them with a new set of tariffs   
   that were equally extreme on average but quite different in detail.   
   According to press reports, the big change came when two Trump Cabinet   
   members managed to corner him in his office while his trade czar was in   
   another meeting.   
      
   So who knows what tariff rates will be, say, six months or a year from now?   
   And how are businesses supposed to plan in the face of such instability? If   
   youre a company deciding whether to invest in, say, a factory in Mexico or   
   a factory in the United States, you know that either investment could   
   easily turn out to be a waste of money. A Mexican factory will be worthless   
   if Trump keeps 25 percent tariffs in place; a higher-cost U. S. facility   
   will be worthless if he decides to take the tariffs off.   
      
   Its worth noting that Trumps tariffs violate all of our existing   
   international trade agreements and have run into opposition in the courts.   
   One of the main purposes of such agreements is precisely to help make   
   future policy predictable. Now, we have a U. S. government that treats   
   solemn compacts with other countries as worthless pieces of paper.   
      
   In this environment, the rational thing for many businesses  and many   
   consumers, too  is to sit on their hands, accumulating cash rather than   
   making investments.   
      
   The result is that were facing a substantial risk of stagflation  rising   
   prices and shortages because tariffs have cut off imports, and rising   
   unemployment because erratic policy is deterring spending. And all of this   
   chaos is on Trumps head: The economy would be doing fine if he had left it   
   alone.   
   Demolishing Government, Waging War on the Poor   
      
   Although the news media keep calling Trump a populist, it was clear before   
   he regained power that his administration would follow a right-wing fiscal   
   agenda: big tax cuts for the rich, savage benefit cuts for the poor and   
   working class.   
      
   Even so, the budget bill that passed the House in May has been incredibly   
   extreme. According to the Congressional Budget Office, it cuts almost $700   
   billion from Medicaid, which will deny health care to millions  we may be   
   talking about 15 million or more people losing insurance by the time this   
   budget and other Trump policies go into effect. The budget also cuts close   
   to $300 billion from SNAP, a. k. a. food stamps, which means that many   
   Americans will go hungry.   
      
   These cuts to social programs will, the CBO estimates, reduce the   
   purchasing power of lower-income U. S. households by around four percent;   
   some independent estimates are even bigger. And Trumps tariffs will also   
   weigh heavily on working families, which will be hit hard by higher prices   
   for clothing, food, and other essentials. Its a good guess that Americans   
   in the bottom 10 or 20 percent of income distribution, who are already   
   struggling, could find themselves on average seven percent or more worse   
   off, with many suffering even more than that.   
   The dollars value has plunged, suggesting that investors are losing faith   
   in U. S. credibility.   
      
   Yet despite these savage cuts at the bottom, taxes at the top are cut so   
   much that the CBO estimates the budget will add $3.8 trillion to the   
   deficit.   
      
   If you dont believe the CBOs dismal deficit forecast, look at the bond   
   market: Long-term interest rates on U. S. debt have soared to levels not   
   seen in many years, while the dollars value against foreign currencies has   
   plunged, suggesting that investors are losing faith in U. S. credibility,   
   maybe even solvency.   
      
   Beyond the viciousness and irresponsibility of its budget, the Trump   
   administration has been destroying the ability of the government to carry   
   out its most basic functions.   
      
   When Trump created Elon Musks so-called Department of Government   
   Efficiency, it was obvious that DOGE couldnt possibly deliver the huge cost   
   savings Musk was promising. Of course theres waste, fraud, and abuse in the   
   federal government, as there is in any large organization, but the great   
   bulk of federal spending goes either to the social safety net or the   
   military, and there was no reason to believe the Muskenjugend  the young   
   tech bros Musk was parachuting into agencies they didnt understand  could   
   save significant sums without creating chaos.   
      
   The skeptics were right. DOGEs receipts, listing purported savings, have   
   itemized only a tiny fraction of the sums Musk claimed he would deliver   
   and theyre riddled with accounting errors. If DOGE has managed to cut   
   overall spending at all, the amount has been too small to show up in budget   
   data.   
      
   DOGE has, however, created a lot of chaos. Stories keep surfacing of sudden   
   dismissals of government workers who turn out to fulfill crucial functions,   
   followed by desperate attempts to hire them back. Agencies the public   
   depends on, like Social Security, are fraying at the seams, with more and   
   more tales of beneficiaries missing their checks, then finding it nearly   
   impossible to get help.   
      
   The monetary hit many Americans are about to take is one thing, but if you   
   ask me, the psychological damage of this sabotage will go beyond the loss   
      
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   --- SoupGate-Win32 v1.05   
    * Origin: you cannot sedate... all the things you hate (1:229/2)