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Wednesday, February 25, 2026

25: Tariff

Europe v America: Who’s Really Winning? A wonkish but important discussion

Attack of the Zombie Tariffs A brain is a terrible thing to have eaten ........... Never one to accept limitations on his power, Trump rushed to impose new tariffs using an obscure clause, Section 122 of the 1974 Trade Act. Section 122 tariffs have a 150-day limit, at which point they expire. So Trump officials are now claiming that they’ll find ways to reconstruct the tariffs using other legal loopholes before the expiration date is reached. ............. Why this desperate attempt to keep tariffs high? A MAGA loyalist would say it’s to preserve what those illegal tariffs have accomplished. But even before they were struck down, the tariffs had achieved none of their stated goals. In fact, they had put those goals further out of reach. .................. the U.S. trade deficit for all of 2025 was about the same as it was in 2024. .........

what Trump cited was a cherry-picked, misleading number that bears no relation to reality.

................ Trump also claimed that his tariffs would revive American manufacturing. In fact, manufacturing employment has declined since Liberation Day. ........... Trump likes to boast about the immense revenue generated by the tariffs. And they did indeed bring in some money — tariffs are taxes, and taxes yield revenue. .............. Revenue from the Trump tariffs, even pre-Court, wasn’t enough to make a large dent in the deficit. Moreover, it wouldn’t even pay for the increase in the deficit caused by the passage of Trump’s One Big Beautiful Bill tax cuts. Nor would it be enough to cover Trump’s call for a 50 percent increase in military spending — a rise so large that the White House hasn’t yet submitted a budget, two weeks past the statutory deadline, because the Pentagon hasn’t been able to figure out how to spend that much. .................. In reality, by the time of the Supreme Court ruling, Trump’s assertion that tariffs are a magic elixir that solves all problems wasn’t convincing anyone. Independent voters disapproved of his tariff policy by a three-to-one margin. Accordingly, when the Court’s decision came down, some Democrats immediately worried that the ruling would help Trump politically, giving him an escape route from an unpopular and ineffectual policy. ................. It has been clear from the beginning that a primary motivation for tariffs was that they empowered Trump personally. They allowed him to punish governments he didn’t like, demand subservience from other countries as the price of lower tariffs, and offer waivers and exemptions to companies that put money in his own pocket. And maybe Trump can’t bear the thought of losing that power. ................. The language of Section 122 calls for a flat-rate tariff on everyone. This means that nations Trump tried to punish — like Brazil, which faced high tariffs for daring to try Jair Bolsonaro for treason — have just received a big break. Meanwhile nations that groveled to Trump, like the UK, have just learned that they humiliated themselves for nothing: ...................... The obvious answer is that Trump can’t bring himself to acknowledge defeat. His tariff strategy is, by any reasonable standard, dead, and the tariffs should be dead too. But they won’t stay dead; they just keep shambling along.

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