President Donald Trump's tariffs are creating uncertainty in the markets -- perhaps deliberately so -- and they have also accelerated a confrontation with China. We need to know how this is going to end, or it could end badly.
Trump was on solid ground when he proposed reciprocal tariffs -- i.e. applying the same tariffs to other countries that they apply to us, in an effort to restore truly free trade. But that effort has been complicated by two other factors.
One is that the Trump White House chose to include non-tariff barriers to trade in its calculation of what other countries have been charging the U.S. Fair enough, but the method of calculating those barriers is rather uncertain.
The other is that Trump appears to see a long-term role for tariffs as a way to generate revenue for the federal government, even replacing income taxes. It is hard to imagine that tariffs alone can generate nearly enough revenue.
After the initial turbulence following April 2 -- "Liberation Day" -- the markets stabilized on Tuesday, on news of the European Union seeking a deal with Trump, before sinking against after Trump announced higher tariffs on China (50% more, 104% total!) over its own retaliatory tariffs. How does this end?
In the best-case scenario, Trump's aggressive approach leads to trade deals that reset world trade on terms that are fairer to the United States. In the worst-case scenario, Trump's tariffs trigger a recession, even a depression.
I think that even in the worst-case scenario, the U.S. will come out ahead, after much suffering. The question is whether that pain is really necessary, and necessary now. If so, perhaps better now than later. Still, it is going to hurt.
What we see emerging, so far, is a kind of middle scenario, one in which some countries seek deals with the U.S., and some (China, really) do not. The world will divide into trading blocs. We will suffer, though perhaps in a limited way.
I think the American public would accept that, if people could understand that the pain is temporary and the payoff is big enough to justify it. We don't know that, and the White House is not making the case. At least, not now.
Secretary of the Treasury Scott Bessent has been very good, but economic adviser Peter Navarro has been less effective. I would speculate that prison -- where he was unjustly sent -- had a bad effect on him. But it is what it is.
I'm a free trade guy, by nature. I used to think that protectionist arguments were cheap and, frankly, stupid. I changed my mind when I saw Trump successfully using tariffs as diplomatic weapons in his first term. But this is much bigger.
On the one hand, this is why you need a president who does not have to think about re-election: to do hard stuff. On the other hand, we're all on the hook.
I don't know what to expect, and I suspect that few of the people who say they know -- for better or worse -- actually do, either. That uncertainty is a problem in itself. We need to see some direction, and some boundaries. Soon.
This week’s portion launches the great story of Abraham, who is told to leave everything of his life behind — except his immediate family — and to leave for “the Land that I shall show you.”
There’s something interesting in the fact that Abraham is told to leave his father’s house, as if breaking away from his father’s life — but his father, in fact, began the journey, moving from Ur to Haran (in last week’s portion). His father set a positive example — why should Abraham leave him?
Some obvious answers suggest themselves — adulthood, needing to make one’s own choices, his father not going far enough, etc.
But I think there is another answer. Abraham (known for the moment as Abram) needs to establish his own household. This is not just about making one’s own choice, but really about choosing one’s own starting point. It’s starting over.
Sometimes we start over in fundamental ways even if much that surrounds us remains the same. Sometimes the journey we have to ...
The story of Noah is familiar; the details, less so.
Noah is often seen as an ambivalent figure. He was righteous -- but only for his generation. What was his deficiency?
One answer suggests itself: knowing that the world was about to be flooded, he built an Ark for the animals and for his own family -- but did not try to save anyone else or to convince them to repent and change their ways (the prophet Jonah, later, would share that reluctance).
Abraham, later, would set himself apart by arguing with God -- with the Lord Himself! -- against the destruction of Sodom and Gomorrah, saying that they should be saved if there were enough righteous people to be found (there were not).
Still, Noah was good enough -- and sometimes, that really is sufficient to save the world. We don't need heroes every time -- just ordinary decency.
Hi all -- as I noted last month, I'm going to be closing down my Locals page, at least for tips and subscriptions -- I may keep the page up and the posts as well, but I'm no longer going to be accepting any kind of payment.
Look for cancelation in the very near future. Thank you for your support!
