The latest news about Trump's tariff shitshow, at least when I started writing this post, was that smartphones, computers and chips have been exempted. This supports the theory that the tariffs are a means to make corporations and industries lobby for privileges. On the other hand, these exceptions blow a hole in the policy goals of reviving American manufacturing, punishing China for retaliation, and increasing revenue from import duties in order to lower or even abolish income tax. Update: Commerce Secretary Lutnick there will be new tariffs on these electronics again in a month or so.
But why are there so many explanations for Trump's flip-flopping going around? Shouldn't a government policy have a stated aim from which you can reliably derive its actual purpose, even if you need to tone it down a little? Is the president playing multi-dimensional chess, putting his enemies on the wrong foot and using the Art of the Deal to Make America Great Again?
The reaction chamber from Half-life 1. What could go wrong?
Let's zoom out a bit - I promise this will be relevant. A recurring joke of mine explains the chaos we're living through since 2016 as follows:
Are you wondering why the world seems weird and out of control these days? Guess what happened: THE UNITED STATES GOVERNMENT CREATED AN UNCERTAINTY MACHINE IN ORDER TO PROPAGATE UNCERTAINTY. 🤯
This machine is actually a statistical tool for evaluating measurement uncertainty, from the National Institute of Standards and Technology. But today it looks like the president and his administration have taken up the task of propagating uncertainty in economic policy.
Now I don't think we should be afraid of political change - unless you're a CEO making a decision about a major investment in domestic manufacturing, but who cares about those greedy assholes? While 'tariffs are bad' is the only thing almost every economist will agree on (even Karl Marx), I wouldn't mind if the world agreed on something like a universal 10% rate in order to stabilize national economies and limit the environmental cost of shipping. The recent IMO agreement putting a penalty on ships' CO2 emissions is a start - which the US pulled out off, of course. However, it would be naïve to debate the merits of Trump's tariffs when he's:
When we can't trust stated intentions, a useful heuristic is POSIWID: the purpose of a system is what it does. There was some debate about this saying in the rationalist community recently, because you can easily disprove it when you approach it like a law of nature. But it's a better starting point than any other.
My conclusion from the bullet points listed above is that Trump wants to create uncertainty on purpose, in order to feel powerful again after being hamstrung by mainstream Republicans and civil servants in his first term, losing the 2020 elections and almost being assassinated. He has always been a fan of tariffs and seems to believe that a trade deficit means you're losing money. And given that America is God's Own Country, the only way other countries could have a trade surplus is by unfair competition. Maybe we should blame the economists who called it a trade deficit rather than a goods surplus. Although Trump might even be motivated by losing an auction against a Japanese collector in 1988.
https://x.com/MattBruenig/status/1909048409001975994
Of course, the essence of the MAGA movement is that Trump's personal frustrations align with his core supporters' frustrations about their place in the world. Which is understandable in some cases I'll discuss in part 3. But their mentality is so bitter that nothing good can come from it. For example, I used to get along well with the British-American venture capitalist Nic Carter, who's a rational investor, aware of the downsides of Bitcoin, capitalism and AI - but these days, he only cares about owning the libs, which includes Wall Street now.
OK, this is getting too long for one piece. Stay tuned for...
