I’m reaching out to you from what feels like the final days of our economic confinement. By the time some of you get around to reading this, we might actually be free. That is, if everything goes according to plan. The White House aims for April 2 to be remembered as America’s “Liberation Day.”
Steve Bannon, who often plays the trump card in Trump’s advisory circle, is so convinced of its success that he’s already tossing around the idea of making Liberation Day a federal holiday next year.
But let’s not jump the gun here. What exactly are we being liberated from on this much-anticipated day?
Oddly enough, the Trump administration hasn’t pinned a catchy tagline on what we’re supposedly breaking free from. You’d expect something grand like “Globalist Oppression” or “Neoliberal Bondage.”
Context, however, gives us clues. President Trump took to social media on March 21 to declare, “April 2nd is Liberation Day in America!!! For DECADES we have been exploited by every nation—friend and foe alike. Now it’s finally time for the USA to reclaim its MONEY and RESPECT. GOD BLESS AMERICA!!!”
In pursuit of this vision, Trump plans to hit foreign car imports and all American trading partners with heavy tariffs.
Exactly how this will unfold remains a mystery. As one irked White House insider told Politico, “Nobody has a clue what’s happening. What are they going to tariff? Who will face these tariffs and at what rates? These basic questions remain unanswered.”
Peter Navarro, the White House trade advisor, anticipates these tariffs will generate $600 billion annually. Yet, economic experts from all viewpoints agree that American consumers stand to foot most of this bill. Essentially, if “successful,” Trump’s strategy would equate to the largest, most backward tax hike in history.
These taxes hit hardest on the less fortunate and middle class, as they tend to spend a larger portion of their income on essentials like food, gas, and clothing.
Trying to articulate “Liberation Day” in coherent terms is challenging because it’s a concept so flawed you can’t help but find fault wherever you dig.
Take tariffs on foreign steel, for instance. When imported steel prices rise due to tariffs, so do the costs of all items made from it. What often goes unnoticed is that domestic steel prices rise as well. Scarcity—in steel, eggs, or even concert tickets—drives prices higher.
Politically, intentionally making everything pricier, especially when you rose to power on promises to tinker with inflation, seems illogical. It’s like economic policy meets surrealist art.
On the global stage, disrupting alliances and shaking the world economy in pursuit of “self-sufficiency” is simply bewildering. History shows that countries wrapping themselves in tariff barriers to “protect” their economies tend to struggle more.
This whole strategy stems from a misunderstanding of how trade functions. The concept of “Goodhart’s Law” from British economist Charles Goodhart comes to mind: “When a measure becomes a target, it ceases to be a good measure.” Trump seems to view trade deficits as evidence America is being taken advantage of. That’s not how trade works.
When you pay for a haircut, you run a trade deficit with your barber. Are you being scammed?
Trump’s fixation on Canada is a classic example. We technically have a trade deficit with them due to a deal he devised during his first term, a situation he says results in a fictitious $200 billion annual “subsidy” to Canada. However, we only have this deficit because Canada sells us oil at rates lower than the global market. Reject this cheaper oil, and we’d face higher gas prices, plus the loss of American jobs tied to refining and exporting it. But sure, that would improve the metric Trump focuses on.
In reality, the essentials we rely on would become pricier and less available. Americans would feel the pinch. This is a win because…?
These years of alleged economic bondage saw the American economy rise to global prominence. Ironically, that’s what Trump seems intent on freeing us from.
@JonahDispatch
