On the menu today: There are two main takeaways from yesterday’s “liberation day” announcements. The new tariffs are economically illiterate, self-destructive, top-to-bottom nonsense, imposed with no sense of rhyme or reason, assembled by White House staffers who do not know which territories have serious trade relationships with the U.S. and which ones are inhabited entirely by penguins. Also, the White House continues to avoid almost any decision that could possibly antagonize Vladimir Putin, while inflicting as much pain as possible on longtime allies and vulnerable friends like Israel and Taiwan.
For America’s enemies, Wednesday was the best day in a long time.
Lamentation Day
President Donald Trump once said of Mexico, “They’re not sending their best.” We can now say the same of the White House and the team that assembled yesterday’s sweeping tariff hikes.
The Trump administration announced a 10 percent tariff on all imports from the Australian territories of the Heard and McDonald Islands.
Those are uninhabited islands. What, are the penguins stealing American jobs?
The administration also announced a 10 percent tariff on imports from Jan Mayan, a Norwegian volcanic island. It has no permanent residents, just 18 personnel operating a meteorological station and airfield.
Those are among the most embarrassing details in an announcement that made clear that the people assembling these tariffs had no idea what they were doing.
On Wednesday, Israel suspended all tariffs on all U.S. goods. On Thursday, Trump announced the U.S. government would impose a 17 percent tariff on all goods imported from Israel.
It is extremely difficult to argue that the Trump administration is pro-Israel when it is imposing what now amount to unilateral tariffs.
And you know who got “just” a 10 percent tariff rate in yesterday’s announcement? Egypt, Saudi Arabia, Qatar, the United Arab Emirates, and Kuwait.
You know who got “only” a 10 percent tariff rate announced yesterday? Afghanistan. The Taliban got a sweeter deal from the Trump administration than Israel did.
(The U.S. has other preexisting tariffs on Afghanistan and preexisting limited sanctions on certain Afghanistan-related individuals and entities. Remember, tariffs and sanctions are different. A tariff is just a tax on an import; a sanction makes the import of a particular good or imports from a particular entity or country illegal. Apparently, Afghanistan exported about $20 million in goods to the United States in 2023, primarily carpets, grapes, and dried fruits, a surprise to everyone who thought Afghanistan’s primary export was trouble.)
As you read in Tuesday’s newsletter, a few days ago, Vietnam made sweeping cuts to its existing tariffs on U.S. goods: The tariff on American liquefied natural gas will be cut from 5 percent to 2 percent, on automobiles from a range of 45 percent to 64 percent to 32 percent, and on ethanol from 10 percent to 5 percent. On Thursday, Trump announced the U.S. government would impose a 46 percent tariff on all goods from Vietnam, one of the highest tariff rates announced.
On what planet does it make sense to reserve some of your highest tariffs for the country that just made the concessions you wanted to see?
The argument from the president was that these tariffs are necessary because these foreign countries are screwing us, and the evidence is that we buy more of their stuff than they buy of ours. This is the case for many countries, but not our longtime friend and ally Australia:
U.S. goods exports to Australia in 2024 were $34.6 billion, up 3.1 percent ($1 billion) from 2023. U.S. goods imports from Australia totaled $16.7 billion in 2024, up 4.7 percent ($745.7 million) from 2023. The U.S. goods trade surplus with Australia was $17.9 billion in 2024, a 1.6 percent increase ($279.7 million) over 2023.
We have a trade surplus with Australia, as well as an existing free-trade agreement. Under no twisted logic can anyone argue that the Australian government is screwing us by making our goods more expensive for customers in their country.
Yesterday, Trump announced a 10 percent tariff on all goods imported from Australia.
These are not retaliatory tariffs. This is a tantrum.
Note that the tariff rates announced at the White House on Wednesday bear no resemblance to the tariff rates identified by U.S. Department of Commerce’s International Trade Administration, laid out in Tuesday’s newsletter.
I was going to write, “They might as well have picked the numbers out of thin air,” but James Surowiecki thinks he’s figured out the formula. “They didn’t actually calculate tariff rates + non-tariff barriers, as they say they did. Instead, for every country, they just took our trade deficit with that country and divided it by the country’s exports to us. So we have a $17.9 billion trade deficit with Indonesia. Its exports to us are $28 billion. $17.9/$28 = 64 percent, which Trump claims is the tariff rate Indonesia charges us.”
Except, according to the agency within the U.S. Department of Commerce that tracks foreign tariffs, Indonesia doesn’t charge anything close to a 64 percent tariff. The U.S. has most-favored-nation status with Indonesia:
Indonesia’s average Most-Favored-Nation (MFN) applied tariff rate was 8.1 percent in 2021 (latest data available). Indonesia’s average MFN applied tariff rate was 8.7 percent for agricultural products and 8.0 percent for non-agricultural products in 2021 (latest data available).
You can find the whole list of Indonesian tariff rates for every conceivable kind of U.S. export — offal, sea bass, ostriches, sardines, “goats (live)” — here. Most are 2.5 percent to 5 percent.
I noticed one country was left off the list entirely. Russia.
The most recent figures for 2023 (meaning the second year of the invasion of Ukraine) indicate that the U.S. exported $595 million to Russia — the top products were vaccines, blood, toxins, and cultures — and Russia exported $4.87 billion to the United States — the top product was “radioactive chemicals.” You would think that a president who hates trade deficits would be more bothered by that ratio.
That trade deficit is not driven by American demand for borscht and Matryoshka dolls. About $1.2 billion of that 2023 deficit stems from the fact that the U.S. nuclear industry relies upon Russian uranium; Russia accounted for 27 percent of the enriched uranium supplied to U.S. commercial nuclear reactors that year. In 2024, President Joe Biden signed into law a ban on imports of Russian uranium, then quietly admitted the ban meant “quota limits on the amounts of low-enriched uranium that may be imported in calendar years 2024-2027,” with the secretary of Energy given the authority to waive the import prohibition and authorize imports of unirradiated LEU and natural uranium. In other words, that “ban” was a lot less than meets the eye.
We have a lot of uranium sitting in the ground right here in the United States, but after the after the 2011 disaster at Fukushima sent the price of uranium plummeting, many of those mines closed. The good news is the U.S. now has seven uranium mines operating — four in Wyoming, two in Texas, and one in Utah.
There are existing tariffs on Russia — 35 percent, as of June 2022. And as I mentioned earlier this week, the U.S. and Russia trade very little anymore, and that’s the given explanation for why Trump didn’t announce any tariffs on Russia yesterday. (As recently as 2021, the U.S. imported almost $30 billion from Russia.)
But according to the White House, everything announced yesterday is on top of existing tariffs. CNBC’s Eamon Javers reported, “The 34 percent tariff on China is ON TOP of the previous 20 percent. So that means the rate on China will be *54* percent when these tariffs take effect.”
So, Trump could have thrown more tariffs on Russia atop the existing ones Wednesday, but he chose not to do so. Curious, because not every country got such mercy. Even territories that don’t have people.
Syria, under new management, but still under embargoes and tariffs designed to punish the previous regime, is under a new 41 percent tariff from yesterday’s announcement. In 2023, Syria exported about $27 million in goods to the United States; the main products were spice seeds ($3 million), building stone ($2.3 million), and antiques ($1.31 million). The Syrian export numbers for 2024 will likely look different, in part because of the collapse of the old regime and new exports to Russia of one dictator and flowers, in particular one rose of the desert.
Ukraine got hit with a new 10 percent tariff, but Russia did not.
No Switching Sides Here!
I hear through the grapevine that Trump’s comment to NBC News this Sunday that he’s pissed at Vladimir Putin means “the talk of Trump ‘switching sides’ in the war” was “premature and exaggerated, even if his approach is a marked break with what came before and has obvious pitfalls.”
Right, right, all Trump has done lately is . . .
- Enact new tariffs on Ukraine, but not Russia.
- Have the U.S. vote with Russia at the United Nations against Ukraine and pressure Israel to abstain.
- Temporarily halt a program documenting Russian war crimes including the mass kidnapping of Ukrainian children until outrage from Capitol Hill forced a reversal.
- Effectively shut down Radio Free Europe and Radio Liberty, which broadcast the actual truth to Russian listeners and viewers.
- Removed Karina Rotenberg, wife of Russian oligarch Boris Rotenberg, from the U.S. sanctions list for no disclosed reason.
- Waived sanctions on Putin adviser Kirill Dmitriev so he could travel to Washington for meetings.
- Displayed “embarrassing naivete” in dealings with Putin, in the assessment of former Senate Republican leader Mitch McConnell.
And that’s separate from preemptively conceding that Ukraine will not enter NATO, conceding that U.S. forces will not participate in any postwar peacekeeping force on Ukrainian soil; disbanding “a Biden-era program aimed at seizing the assets of Russian oligarchs as a means to punish Russia for its invasion of Ukraine,” disbanding “the Foreign Influence Task Force, established in the first Trump administration to police influence campaigns staged by Russia and other nations aimed at sowing discord, undermining democracy and spreading disinformation,” asking the State and Treasury departments to “draft a list of sanctions that could be eased for U.S. officials to discuss with Russian representatives as part of the administration’s broad talks with Moscow on improving diplomatic and economic relations,” halting criminal prosecutions for Foreign Agents Registration Act (FARA) violations unless they involved “conduct similar to more traditional espionage by foreign government actors,” preparing for 240,000 Ukrainian refugees in the United States to be sent back to Ukraine, temporarily halting military aid and intelligence sharing with Ukraine, having administration officials refusing to state the obvious, that Russia started the war by invading Ukraine, and denouncing Volodymyr Zelensky as a “dictator,” while explicitly ruling out that label for Vladimir Putin.
Oh, and our top envoy for negotiating with Russia keeps insisting how much he trusts Putin, how Putin isn’t a “bad guy,” and keeps echoing Russian propaganda.
I will give credit where it is due; Trump’s threat to impose secondary tariffs ranging from 25 percent to 50 percent on countries purchasing Russian oil would pack a hard punch. But right now, it’s just an idle threat uttered off the cuff during an interview. There’s no sign of movement on that proposal since Trump made his comments Sunday. You could forgive the Russians for dismissing it as bluster, a threat that Trump will never carry out, much like his repeated threats to Hamas that he’ll unleash all hell on them.
But you’re right — other than that, there’s no evidence that under Trump, the U.S. government has switched sides in the war! A couple of harsh words to NBC News completely balances all that out!
ADDENDUM: Oh, and we are finally evening the score with Tokelau, a dependent island territory of New Zealand, by imposing a 10 percent tariff.
Tokelau has a population of about 1,500 people. It has no official capital, according to the CIA World Factbook. “Tokelau lacks an airport and is only accessible via a day-long boat trip from Samoa.” It has no ports or terminals. It has an entire six miles of paved roads. The country’s national symbol is the tuluma, a fishing tackle box.
It has no political parties or leaders.
In 2023, Tokelau exported $186,000 in goods to the United States.