'Liberation' Today. Bread Riots Tomorrow.

(Before I get into this, I want to take a second to explain what tariffs are before I start slinging the term around. Tariffs are taxes on goods imported from other countries. The tariff is typically paid by the company that imports a certain product into a county. Tariffs are usually calculated as a percentage of a product. So, if a product costs $100 and the tariff is 10%, the importer will pay $110 per product. Once higher tariffs are imposed, the import company has two options: import less goods or pass those costs onto the consumers, which is the more likely outcome. Tariffs are usually implemented to protect domestic industries, but many economists consider them “self-defeating” because they raise prices and can trigger retaliation from other countries. )

The Trump administration actually did it. They touched the stove. And even though the smell of charred flesh fills the room and the flames catch on the walls of the house, they are just gripping searing metal even harder. Too bad they don’t believe in burn medicine or fire extinguishers.

By all accounts, Trump’s new "Liberation Day" tariffs — which he announced like he was the host of an off-brand variety show — are one of the dumbest and potentially cataclysmic things this administration has done in the less than 100 days since it took office. “The policy announcement is astonishing for its stupidity,” Gene Grossman, global trade expert and Princeton professor, told 404 Media. Meanwhile, Justin Wolfers, who’s a senior fellow at the Brookings institute and an economics professor, posted to Twitter that they are “monstrously destructive, incoherent, ill-informed tariffs based on fabrications, imagined wrongs, discredited theories and ignorance of decades of evidence.”

World leaders have reacted negatively as well. China’s commerce secretary, who now has to deal with a 54% tariff, said “there is no winner in a trade war, and there is no way out for protectionism. Japan’s trade and industry minister called the tariffs “extremely regrettable” and warned the 24% tariff imposed on them could possibly violate World Trade Organization rules. Both countries, alongside South Korea, which was hit with a 25% tariff, had previously issued a joint statement saying they would strengthen trade ties because of the then-unannounced US tariffs. Meanwhile, Mexico and Canada — whom Trump has been beefing with for some time now — got off scot-free but still have to deal with previous tariffs. The former’s president had previously said they would not counter “tit-for-tat” but would create a comprehensive program in response and the latter’s prime minister said their old relationship with the US “is over.”

“This is a game changer, not only for the US economy but for the global economy,” Olu Sonola, an economist at Fitch Ratings, told the New Yorker. “Many countries will likely end up in a recession.” 

The flat 10% tariff will go into effect on April 5. Meanwhile, the country-specific tariffs will go into effect on April 9. J.P.Morgan is now predicting odds for a US and global recession are at 60%. 

Suffice to say, everyone disliked that. However, the America First puppets continue to cheer and holler, completely incapable of understanding what their actions have wrought while their puppet masters tie their strings together and smash them against the wall.

While this post will mostly focus on the effect on the US, I want to highlight that these tariffs and the recessions that will trail them will be devastating to many foreign countries, especially the ones who were already disadvantaged by the global economy, such as Myanmar, Cambodia, and Laos. As Vicky Osterweil predicted in her pre-"Liberation Day" article for CAW Journal, many of the countries closest to the US were some of the hardest hit by Trump’s new tariffs.

Although the brain trust at the White House keeps saying they reached these rates through a masterful gambit of global finance, the situation gets dumber as people theorize about how they were reached in reality. Finance journalist James Surowiecki reverse-engineered the tariffs and realized they just took the US’s trade deficit and divided it by the country’s export, likely because Trump thinks a trade deficit means he’s getting ripped off.

Surwoiecki also surmised that the baseline 10% tariff applied to a bunch of countries is because they had a trade deficit/imports below 10% or the US had a trade surplus with them. The quick maths seemingly also did not account for services. This explanation makes sense when you consider that a military base the US co-manages with the UK and a group of islands whose only residents are penguins are among those hit with the tariffs.

Reportedly, Trump personally picked the formula from a host of options that were presented to him, according to the Washington Post.

While precisely who proposed that option remains unclear, it bears some striking similarities to a methodology published by Peter Navarro, Trump’s hard-charging economic adviser, during his first administration. After its debut in the Rose Garden on Wednesday, the crude math drew mockery from economists as Trump’s new global trade war prompted a sharp drop in markets.

Meanwhile, people online were also quick to point out that, just like a finance major who wants to hit the bars but just remembered his homework is due at midnight, they probably just fed their questions into ChatGPT and copied whatever it spit out. Whether the tariff calculations came from Navarro, AI, or a mix of both remains to be seen.

As Brian Merchant detailed for his Blood in the Machine newsletter, this is the exact reason that you should not trust generative AI for anything that actually matters:

This is actually a pretty great example of the kind of assumptions commercial AI systems encourage—they’re sold as ultra-powerful, or about to become so, and thus many users are prone to over-index on their capabilities. They encourage laziness, or “cognitive offloading” as researchers more diplomatically put it, and deter critical thinking (like the kind that might lead one to ask whether it is a good idea to impose tariffs on uninhabited islands). They’re adept at tasks that require ‘good enough’ output—say, producing marketing email copy, images for corporate power point slides, or tariff rates to be printed out in very small font on a poster board to be gestured at by a guy who really just wants to stand at a podium in front of the cameras and hear himself talk for an hour.

This explanation about the White House’s formula from John Authers for Bloomberg Opinion is both pretty funny and explains the calculation pretty well. “It looks very impressive because it’s in Greek,” he said, talking directly to the intern with the bussin’ haircut that copy/pasted all of the tariff rates onto Trump’s gameshow boards. 

Meanwhile, the analysts, politicos, and journalists who sanewashed Trump for a decade and presented his policies as "hard but good for America" and not a fascist assault on the world are aghast that he actually did what he promised for an entire campaign. They lied through their teeth so much to pitch their grift and mental gymnastics analysis that they thought nobody would actually be truthful about their intentions, which directly led us to this moment.

So, after presenting all of these numbers and explanations, what will the effects of these tariffs actually be? The simple answer is that the future is looking expensive as shit from where I'm standing.

Although some food importers might initially absorb some of the costs of tariff-affected food, the tariffs will eventually “significantly raise the cost of imported goods” like tomatoes, certain berries, garlic, shrimp, and meat, a lot of which come from Mexico, Canada, and China, according to Forbes. Meanwhile, CNN says “almost all consumer electronics, including smartphones and computer monitors, are likely to see price increases.” The price of foreign-made cars will likely increase between $5,000 and $15,000 per vehicle because of a 25% tariff on imported cars. Meanwhile, cars in general will shoot up about $3,285 on average if a 25% tariff on imported parts is imposed on May 3. “American-made" cars are never 100% red, white, and blue (bald eagle sounds). Guess, it was a bad idea to structure the whole country around highways and cars!

As to how all of this will affect Puerto Rico, it’s not going to be very good. I can tell you that much right now! Puerto Rico imports about 85% of the food we eat. When you mix the increase in food prices from the tariffs with the hundred-year old shipping law that makes everything a lot more expensive, we are in for a bad time. The Jones Act raises the price on food and beverages by about $367 million, a number that is likely to go up if the current tariff scheme stays in place.

The reaction from Puerto Rico’s Trump-loving Republican governor, Jenniffer González Colón, has been pretty much the same as her icon’s. When asked what her constituents should do because of the possible impacts of the tariffs on the auto industry, she said “buy an American [car], it’s cheaper.” Even if a car is "American-made," it uses a LOT of imported parts because it is simply unfeasible to make all the parts for a car in just one country. Prior to her starting her term, she rode around in a Can-Am Maverick X3 emblazoned with her legally-distinct-from-Wonder-Woman logo on it. The company is Canadian and that specific vehicle is manufactured in Mexico, according to the company’s website. 

During the same press conference, she worried about the possible effects on Puerto Rico's pharmaceutical industry. The archipelago is the US's second largest producer of pharmaceuticals, accounting for about 17.6% of total US trade dollar value in pharma imports in 2024, according to the US Bureau of Labor. However, a lot of the raw materials that fuel that manufacture do not come from Puerto Rico and are imported from other countries. A US official told Reuters that Trump is planning separate tariffs targeting the pharma sector. The effect these will have on Puerto Rico remain to be seen, but a tariff on the raw materials needed to make the many, many pills we make here could hit our economy like a brick.

González Colón, like Trump, has also said the tariffs present an opportunity for reshoring Puerto Rico’s manufacturing industry. However, given the cataclysmic state of our electrical system, these new tariffs, future climate disasters, and foreign companies becoming wary of trusting the US because of Trump’s market-crashing tantrums, moving manufacturing to the Puerto Rico might seem like a bad deal for many international companies. The archipelago is a chronically unprepared for everything, including this newly proposed reshoring scheme. if they really wanted to build up manufacturing again, the best time to have done that was years ago not after things have gone to shit.

People like Trump and Puerto Rico’s governor are not going to be the people most affected by the US’s tariff scheme. Instead, the regular people who are already struggling will be the ones to suffer the most as the economy jumps off a cliff. In Puerto Rico, nearly 40% of the population lives in poverty, compared to only about 11% in the wider United States. These people, who were already paying exorbitant prices for eggs, will be the ones to suffer from this catastrophe.

If there is any consolation to all this - and to be absolutely clear, I am not saying this in an accelerationist sense — fucking with the money might actually prompt a global response that could topple Trump’s top heavy administration. And while I’m not really convinced that will happen, it does give me some bit of hope, especially as more and more countries realize that the US is cannot be trusted and is actively dangerous. When you add the growing anger from regular, working people at both Democrats and Republicans for railroading us here, it presents a scenarios where something could happen that dramatically slows down or completely stops our journey into hell.

While, admittedly, this anger is not as strong in Puerto Rico, the feeling in the US reminds me of the mixture of disaster anxiety and disappointment people give off when they're lined up by the dozens to buy food before a hurricane. If we, collectively, channel all that anger to the top, we can get through this and come out the other side to a more equitable society. If bread lines become commonplace, so too will bread riots. That's the power the public must yield against the fascists running our society.

This comment on a New York Times article about how to protect your retirement savings as the market crashes because the guy they helped prop up is throwing a tantrum (they obviously didn’t mention that last bit), sums up how many people are feeling right now:

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