April 2, 2025
Tariffs explained?
For what seems to be a fact-based explanation of the current “administrations” new taxes (= tariffs), this article seems helpful. Of course, as a world-renowned non-expert, my assessment of what’s fact-based is not itself fact-based.
Because with this administration facts are squishy, not stubborn things, it is not yet possible to know how it’s going to apply the policy. According to that first link:
The primary goal outlined in the memorandum is to “restore fairness” in these trade relations through tariff equalization—meaning the United States would impose reciprocal tariffs on imports from countries with higher rates than those in the United States. Additionally, the memorandum addresses other nonreciprocal practices, including “unfair, discriminatory, or extraterritorial taxes” like value-added taxes; nontariff barriers, subsidies, and “onerous regulatory requirements on U.S. businesses abroad”; currency devaluation, wage suppression, and other “mercantilist policies” that disadvantage U.S. companies; and “any other practice that . . . imposes unfair restrictions on market access or creates structural obstacles to fair competition with” the United States—providing the administration much leeway in assessing what constitutes unfair trade practices.
The article also discusses “the stacking effect“. One sense of the term is that the new tariffs are on top of any existing tariffs. But there seems to be a different sense as well: For example, hop to 2:25 minutes into this interview with the head of the Retail Industries Retail Association who says that the stacking of tariffs on materials (e.g., aluminum) as well as on the products that use them could raise the price of a ladder by 70%. Other sources use 50% total tariffs on some consumer goods as their example. Whatever it is, it’s a lot more than bringing down the cost of products. (Mr. Krugman, feel free to jump in to correct me. Even those who have not yet received our Nobel Prizes — UPS apparently mis-delivered mine — are welcome to fix my errors. That’s why we have comment tails!)
For info about the absolute nightmare caused by the sheer complexity of assessing these tariffs, here’s what seems to be a good article.
Now pardon me while I go to the hardware store to stock up on ladders.
