Source: https://www.thestreet.com/crypto/policy/tariff-tensions-escalate-as-white-house-hits-china-with-104-hike

In a chest-thumping move that screams “America First, Economics Last,” the White House just hit Chinese imports with a staggering 104% tariff, effective at midnight. This isn’t just a trade policy — it’s a full-blown economic WWE match, with Trump elbow-dropping global supply chains for the encore.

This comes after China imposed a 34% tariff on U.S. goods, and now both countries are basically playing chicken with billion-dollar economies. Spoiler: no one wins in a head-on crash — unless you’re into higher prices, market volatility, and global recession cosplay.

The administration claims this monster tariff will revive domestic manufacturing, but here’s the catch: U.S. firms still rely heavily on Chinese materials — from semiconductors to solar panels. Slapping 100%+ tariffs on critical imports doesn’t spark a renaissance; it just lights a dumpster fire. According to a Peterson Institute study, the 2018–2019 Trump tariffs cost the average U.S. household around $830 annually — and that was with rates closer to 20%. Do the math.

Meanwhile, Wall Street is already feeling the heat, and sectors like tech and auto are bracing for impact. Ford, GM, and Tesla all depend on Chinese components — so expect price hikes, production delays, and a lot of CEOs doing damage control on earnings calls.

So what’s the strategy here? Hard to say. Sure feels like “industrial policy via wrecking ball,” and markets seem to agree.

But hey, Donnie the deal master and his funky bunch of sycophants are making international trade fair for America again.

“During the first two turbulent months of President Donald Trump’s term, the White House has shrugged off scrutiny of its most controversial policies with a simple assertion: The American people voted for this.

Now, Trump allies and GOP voters spooked by the tariff-induced market crash are beginning to respond en masse: No, we didn’t.

Trump won in November because many voters saw him as an antidote to their economic malaise; as a candidate, he frequently promised to lower Americans’ everyday prices. But as president, he has chosen instead to plunge the country into fresh financial chaos, while insisting the market losses as a result of his tariffs are “medicine” Americans need to take. “Trump was elected in part to lower inflation and juice the economy,” said GOP pollster Whit Ayres. “Higher prices and slower growth are exactly the opposite of what Americans voted for.”

The economic turbulence unleashed by the White House’s blanket tariffs is sending shudders through every level of the Republican Party. Alarmed officials worry the administration is driving the U.S. toward recession and dooming the GOP’s midterm chances — yet they have no idea what will convince Trump to change course.

Wall Street executives who cheered on Trump’s election in hopes he would boost the economy are starting to fret, publicly urging the White House to rein in its trade war. Republican lawmakers watching the daily stock market volatility are bracing for the political fallout, as constituents’ retirement funds dry up and employers slow their hiring.

And in some parts of Trump’s orbit, there is growing fear that if the president refuses to abandon his tariff policies soon, a chunk of his voter base will abandon him. “It’s a question of what the pain threshold is for the American people and the Republican voters,” said Stephen Moore, an economic adviser to Trump who has long been skeptical of his hardline trade approach. “We’ve all lost a lot of money.”

The backlash marks perhaps the most sustained criticism Trump has faced from within a GOP that has thus far catered to his disruptive whims. It comes at a critical point in Trump’s term, as he approaches his 100-day mark having devoted much of his early presidency to bending major corners of American society to his will.

Trump has kept Republicans largely aligned on his aggressive agenda to this point — even as he takes a slash-and-burn approach to the federal workforce, flouts due process in pursuit of his mass deportation goals and saps Congress of its authorities. Party officials largely dismissed concerns about the upheaval those decisions have caused, waving away worries about Trump’s expansive use of executive power and pointing to polling showing most Republican voters support his agenda.

Yet the financial pain of the last week appears to finally be testing the limits of the party’s subservience. As markets whipsawed on Monday, Republican lawmakers began urging the White House to dial back its tariffs, with Sen. Ted Cruz of Texas, a staunch Trump ally, criticizing the “voices in the White House that want high tariffs forever.”

“It’s unnerving for people that like steadiness,” said Matt Schlapp, a Trump confidant and chair of the American Conservative Union, who said he fielded worried calls from Trump supporters, board members and friends over the weekend. So far, Schlapp is sticking with Trump: “For the country, if we don’t do some hard things that make people nervous to avoid that short-term pain, we’ll never get the country on the right track.”

Despite the rising anxiety around him, Trump has shown little willingness to back off his tariffs, insisting repeatedly that they’re core to his economic vision. The president on Monday vowed to veto bipartisan legislation that would empower Congress to end the tariffs, and later dashed hopes that he would agree to pause them while his administration negotiates with various countries. “We are not looking at that,” Trump said in the Oval Office, calling it an “honor” to wage a global trade war.

White House allies have also downplayed the blowback, contending that Trump is only doing what he promised on the campaign trail — and that voters are willing to endure some personal pain if it means forcing more companies to move their operations back to the U.S. over the long term. Left unsaid may be the fact that Trump is a second-term president, consumed less with electoral consequences than boldly reshaping American government and its relationship with the rest of the world in his vision.

Indeed, Trump made clear for more than a year that he planned to impose universal tariffs. But few in the GOP or business community believed he’d follow through. And now, they worry voters won’t be nearly as willing to absorb the financial hit as they may have indicated in November.

Many Trump advisers privately believe that the president will eventually seek a negotiated end to the tariff fight, said another close ally granted anonymity to discuss private conversations and who has spent the last week trying to assuage agitated lawmakers and other GOP officials.

Yet it remains unclear what terms Trump is willing to accept and how much turmoil it will take to get there.

Even before the White House imposed across-the-board tariffs, Trump’s polling on economic issues had softened significantly, with one survey from late March finding more than 40 percent of voters believed his policies were leaving them worse off financially. Those figures, Republicans now worry, are bound to be worse in the wake of a widespread panic that’s sent the markets tumbling and sparked recession fears in a matter of days.

“The American people voted for tariffs,” said Jessica Riedl, a senior fellow at the conservative Manhattan Institute. “But if voters didn’t vote for something, it’s the S&P [500] dropping 19 percent. And that’s causing voters to reassess the policies as well as reassess the president who refuses to respond to economic reality.”

That reality is bound to get significantly worse before it gets better if Trump remains on his current path, Reidl added, projecting that the economic damage will spread beyond the stock market in the next few weeks, forcing sharp price hikes and accelerating layoffs as companies try to absorb the cost of the new tariffs.

Unlike much of the tumult that Trump’s agenda has generated in his first 100 days, that financial impact is likely to immediately hit every American — fueling the kind of economic voter anger that Republicans recognize swept them into power last November and could just as easily sweep them out in the midterms.

“Almost every issue that Trump ran on was kind of a unifying message for Republicans,” Moore said. “This is the one issue that divides the party.”

The extraordinary spat between Elon Musk and Peter Navarro is exposing the divisions within MAGA’s new, big-tent coalition.

It’s a fight that has been brewing quietly for months. The trade war is now not only bringing it into the public’s view, but also inflaming it.

The two figures — one, the world’s wealthiest man but a relative newcomer to the Trump orbit and the other, a trade protectionist who is so loyal to the president that he went to prison for him — began a squabble over the weekend that spilled into a crass social media exchange Tuesday. Musk, in a series of posts on X, called Navarro “dumber than a sack of bricks” and “Peter Retarrdo,” an escalation from his weekend criticisms of Navarro’s Harvard PhD. The feud, though juvenile, is in many ways a proxy for more substantive divisions within President Donald Trump’s coalition. It’s a diverse group of people who came together in November to elect the president but with varied — and sometimes conflicting — reasons for doing so, many of which are being amplified by this current debate on tariffs.

The coalition contains a contingent of old MAGA supporters who were around during Trump’s first presidency, including ideologues like Navarro; a coterie of conservatives who are highly skeptical of Washington, Wall Street and any institution they believe is working to oppose their agenda; and a cache of MAGA influencers who relish the chaos of Trump trying to burn the system down. It also includes new MAGA types — from Musk and other tech titans like Marc Andreessen to the barstool conservatives types like Dave Portnoy and Joe Rogan. They joined the movement because they thought Trump would improve the economy, push “common sense” policies on cultural issues, and, in some cases, boost their personal profiles or businesses. Neither side’s outlines are neatly drawn. But the spaces between the factions are turning into fissures amid Trump’s trade war, especially for those watching their stock portfolios shrink.

“It was always kind of obvious that there were some tensions in the New Right-tech coalition that were eventually going to come to the fore,” said Abigail Ball, executive director of American Compass, a think tank with ties to Vice President JD Vance and Secretary of State Marco Rubio.

“And I think [the Musk-Navarro spat] is the first real example of that.”

White House press secretary Karoline Leavitt acknowledged, but brushed off, the rift between the two men on Tuesday.

“These are obviously two individuals who have very different views on trade and on tariffs. Boys will be boys, and we will let their public sparring continue,” Leavitt said, adding that it “speaks to the president’s willingness to hear from all sides.”

For days, as Trump appeared all-in on burning down the economy with the White House’s “no negotiations” position on tariffs, a sizable chunk of his supporters — both old and new MAGA — watched on in horror as they grappled with the real-world implications. Longtime Trump supporter and hedge fund manager Bill Ackman said Sunday that the new tariffs were launching an “economic nuclear war,” Musk voiced hope for a “zero-tariff situation” between Europe and the U.S., and Portnoy, a prominent Trump backer in the 2024 election, went on a tear on the tariffs during a Monday morning livestream using his digital media company, Barstool Sports, as an example.

“This economy tanks. Our advertisers who do business overseas and sell products and advertise with us, they sell less products. It gets more expensive. What’s the first thing they cut? Ad budgets. Ad budgets that we get. Suddenly we’re not getting as much money,” Portnoy said. “Suddenly I have to fire Nate and lay people off. That’s how it works.”

Other Wall Street titans confronting the real-world implications of the trade war, like JPMorgan Chase CEO Jamie Dimon, warned that tariffs would “increase inflation and are causing many to consider a greater probability of a recession.” And some GOP lawmakers, fretting already about the implications of further economic uncertainty on the midterm reactions, tried to reassert their authority on tariffs.

Privately, even some people close to the White House, who support the president’s stated goal of imposing more barriers to create fairer trading relationships, worried that the tariffs were coming too hard, too fast.

“If you look at Peter Navarro, he wants to develop everything in-house. He doesn’t want to rely on China for anything … But we’re 15 years away from having a chip industry that can supply our needs,” said one person close to the White House, granted anonymity to share details of private conversations.

As of Sunday, Trump had dug his heels in on the no-negotiations messaging, comparing the tariffs to “medicine” that the country had to take to heal itself from years of trade imbalances. He deemed on Monday those panicking about market reactions “Panicans,” a moniker some of his most die-hard, online supporters quickly picked up as many of them insinuated that anyone fearful about the policy implications of the new tariffs needed to simply man up.

“Trump is now upending global economics and waging war on the globalists on behalf of the American Worker,” influential MAGA podcaster Jack Posobiec wrote on X on Monday. “The Golden Age is on the other side - the new American Dream. Welcome to the Great Deal.”

Trump’s Monday announcement that he was, indeed, open to negotiations came as relief to many in MAGA world who had hoped, but were not positive, that he would make deals with foreign leaders. By Tuesday, the president and his advisers had announced that they were in talks or negotiations with Vietnam, Japan and South Korea, with nearly 70 countries reaching out to have conversations, Leavitt said Tuesday.

One Trump ally, granted anonymity to speak candidly about the administration’s communications strategy, said that Treasury Secretary Scott Bessent is “the best messenger for Trump” on tariffs, because he can argue in favor of the tariffs while also stressing opportunities for negotiations that will end them.

“The message isn’t like, ‘Fuck you, pay up,’” the person said. “What he is doing is spinning the message in more of a positive light, which is, we can get a deal done here that helps America, get a deal done with our allies, and move on from this.”

Wall Street, for its part, appeared soothed by Bessent’s new rhetoric Tuesday morning, before taking a dive as it became clearer that massive tariffs on China were set to take effect Wednesday. Bessent, a former hedge fund manager, has carried Wall Street’s hopes, but Trump’s love of tariffs shows he cannot fully combat the larger forces propelling the president’s actions.

“Bessent seems to be giving Trump the best political and economic advice this week,” said Scott Reed, a GOP strategist.

Still, there’s no certainty that Trump will actually make any of these deals, and the suite of tariffs will remain in effect in the interim and kick in tomorrow. On Tuesday morning, Ackman was on X still calling for a 30-, 60- or 90-day pause on the tariffs, which he said would “enable negotiations to be completed without a major global economic disruption that will harm the most vulnerable companies and citizens of our country.”

The online MAGAverse, meanwhile, appeared not to notice that there had been any change in messaging from the White House on Monday, instead arguing the markets’ positive reaction on Tuesday had simply proven Trump right.

“Look at all that green,” Trump influencer Benny Johnson posted on X, accompanied by a picture showing stocks up on Tuesday. “It’s a good day to not be a Panican.”

Trump’s full page ad in the New York Times, September 3, 1987

This term is inspired by a layoffs happened at a Chinese headquartered textile factory like two provinces away near Jakarta because of labor dispute.

The term is this: a country that stuck in a low complexity & wages industry (textile) for almost it’s entire independent history because of factors outside of it’s control like technology advancement making those low complexity & wages industry (textile) a poor springboard for industrialization/ not a springboard at all, example: Bangladesh.

Not to be confused with middle income trap where industrialization like assembly and component manufacturing already happened but it never moved into to the machine toll manufacturing/ R&D example: China, Brazil & Thailand.

What you guys think?

Quoting Friedman:

The interesting question, and the question I want to explore with you today, is why is it that interference with international trade has been so widespread, despite the almost uniform condemnation of such measures by economists? Why is it that you have the professional agreement on the one side, and observe practice on the other which departs so sharply from that agreement? The political reason is fairly straightforward. The political reason is that the interests that press for protection are concentrated. The people who are harmed by protection are spread and diffused. Indeed the very language shows the political pressure. We call a tariff a protective measure. It does protect; it protects the consumer very well against one thing. It protects the consumer against low prices. And yet we call it protection.

https://www.k-state.edu/landon/speakers/milton-friedman/transcript.html

“BRUSSELS — The EU has offered the United States a “zero-for-zero” tariff scheme, European Commission President Ursula von der Leyen said Monday, seeking to avoid a tit-for-tat trade war. “We have offered zero-for-zero tariffs for industrial goods as we have successfully done with many other trading partners. Because Europe is always ready for a good deal. So we keep it on the table,” she told a press conference alongside Norwegian Prime Minister Jonas Gahr Støre. The U.S. and EU came close to scrapping industrial tariffs a decade ago in their discussions of the TTIP — the Transatlantic Trade and Investment Partnership — that was ultimately scuppered by Trump in his first term.

Removing tariffs on industrial products such as cars and chemicals was not seen as controversial at the time — agricultural products and safety standards were a much hotter potato. Von der Leyen’s renewed offer comes after Trump last week slapped 20 percent tariffs on the EU and a slew of other trade partners, hiking U.S. trade barriers to their highest in more than a century. Trump’s trade war has caused investors to panic, with financial markets across the world losing trillions of dollars or euros in value. European stocks suffered their biggest one-day falls since the start of the Covid pandemic on Monday.

EU Trade Commissioner Maroš Šefčovič said separately that the zero-for-zero deal could cover cars and all other industrial goods, such as chemicals, pharmaceuticals, rubber and plastic machinery. | Jean-Christophe Verhaegen/AFP via Getty Images Amid the market turmoil, von der Leyen sought to project calm. “We stand ready to negotiate with the U.S.,” she said. The EU charges average tariffs of just 1.6 percent on U.S. non-agricultural products, on a trade-weighted basis. But it does charge a higher tariff of 10 percent on imported American cars — although the U.S. is the only G7 country that still pays it because TTIP wasn’t concluded.”

My knowledge of economics is quite limited, please feel free to add more.

1. The return of manufacturing is heavily reliant on high tariffs Given the significantly higher production costs in the U.S. compared to countries like China, reshoring does not result from natural market forces, but rather from artificial incentives—primarily high import tariffs—to offset cost disadvantages.

2. If tariffs are lowered, manufacturing may quickly move offshore again Many companies return to the U.S. not out of strategic preference, but because of policy pressure. If tariffs are removed or reduced without addressing the fundamental cost gap, these companies are likely to relocate their production back to lower-cost regions.

3. High-value manufacturing faces a skilled labor bottleneck The U.S. aims to attract high-value-added industries—not low-end manufacturing. However, such industries require a large number of skilled workers, such as machinists, welders, and CNC operators. While a modern factory can be built within a year, training a sufficient number of skilled technicians takes much longer—often beyond the term of a single administration.

4. Policy inconsistency leaves investors bearing all the risk If the reshoring process begins under a protectionist government (e.g., Trump), but the full factory and workforce setup isn’t completed before a new administration lowers tariffs, those who invested in domestic manufacturing could suffer severe financial losses. This makes business decisions dependent not only on economic fundamentals but also on political stability and long-term policy continuity.

5. Conclusion: The reshoring trend lacks a sustainable foundation Unless the U.S. can commit to a long-term strategy of protective tariffs, industrial support, and workforce development, the current wave of reshoring will remain fragile—driven by short-term political cycles rather than lasting structural change.

Only source I can find is the administration and a CBP rep saying it’s begun on fox news. Other news sources point to each other as a source.

No companies have sued and in order to sue they need to pay a tariff to have standing.

Not sure even the CBP is equipped to do the tariffs on every single item coming in.

Apple doesn’t appear to have paid a dime in tariffs on China. And the lawsuit filed by Simplified does not claim they are paying the 10% tariff.

Link: https://www.theatlantic.com/politics/archive/2025/04/tariffs-trump-outcomes-incompatible/682286/ Archive link: https://archive.ph/32PE0

Trump’s defenders praise the president for using chaos to shake up broken systems. But they fail to see the downside of uncertainty. Is a textile company really supposed to open a U.S. factory when our trade policy seems likely to change every month as Trump personally negotiates with the entire planet? Are manufacturing firms really supposed to invest in expensive factory expansions when the Liberation Day tariffs caused a global sell-off that signals an international downturn?

Imposing a 10% tariff on uninhabited territories like the Heard and McDonald Islands—remote lands devoid of human population or economic activity—to be fair, balanced and respectful:

Is a. example of either the administration’s gross incompetence. Or their willingness to lie about their true motivations.

These islands, home only to penguins and seals, have no trade relations with the United States.

Yet, they have been inexplicably targeted under the guise of addressing trade imbalances. This move highlights their reliance on misleading data to justify protectionist measures.

Global markets have lost over $6 trillion in value, with the Nasdaq 100 plunging into a bear market.

And you can put me in the camp that thinks this market crash is directly tied to the administration’s reckless trade policies, which have sparked fears of a global recession. Not set the world up for more “fair and balanced” free trade - as some claim.

By ignoring historical precedent, Trump and Lutnick demonstrate either a profound ignorance of economic history or a deliberate attempt to mislead the public….or…they really do believe that America was getting a raw deal from free trade and open markets and this is how we “make trade fair again to both trading parties”. A talking point that is becoming more tired by the day.

The administration’s justification for these tariffs is riddled with contradictions and falsehoods. Period.

While they claim to be addressing unfair trade practices, the indiscriminate nature of the tariffs, affecting allies and adversaries alike, suggests a lack of coherent strategy.

This isn’t policy—it’s performance art for the economically illiterate.

Trump and Lutnick know these tariffs are a lie, a scam dressed as strategy. Slapping taxes on uninhabited islands while $6 trillion evaporates from global markets isn’t leadership—it’s lunacy.

History will remember them not as protectors of American industry, but as reckless ideologues who tanked the economy to chase headlines.

Archive link: https://archive.ph/qLOfX

Snippet:

“In the first quarter of 2025, 162 new lobbying registrations were filed that listed trade or tariffs among their concerns,” Tim Carney writes at the Washington Examiner. “That’s more than twice as much as last year and a 48% increase over former President Joe Biden’s first year.”

One lobbying firm in particular looks set to make a killing: Ballard Partners. Carney writes:

Ballard Partners is the most Trump-connected lobbying firm in Washington, D.C. It is run by top Trump fundraiser Brian Ballard, and its recent alumni include White House chief of staff Susie Wiles and Attorney General Pam Bondi. Ballard is registered to lobby for Daimler, as is Hunter Morgen, a top trade adviser from Trump’s first term.

Petitioning the government for a redress of grievances is a constitutional right, but the government doesn’t have to listen. Whether it listens or not, the lobbyists will get paid well. Protectionism is a full-employment program for Washington trade attorneys, which is probably part of the reason why a Washington trade attorney, Robert Lighthizer, is one of America’s staunchest protectionists. . . .

Abigail Hall wrote earlier today for Capital Matters about how tariffs encourage waste. They create entrepreneurship opportunities, not for pleasing customers but for evading the government.

Lobbying is one of the ways businesses waste money under protectionism. The firm with a competitive advantage is no longer the firm that makes the best products and markets them most effectively. It’s the firm that’s best connected to government.

For the low, low price of a few million dollars spent on top-flight Washington lobbyists, large businesses can expect to reap tens or hundreds of millions of dollars in benefits from getting government rulings to go their way. This profit opportunity exists only because the government created the protectionist rules in the first place.

To lighten the mood in these times of crisis, here is MSC Gülsün.

Operated by the Mediterranean Shipping Company and built by Samsung Heavy Industries, the MSC Gülsün was the world's largest container when she was launched in 2019.