The Trump tariffs are just weird

They would restore manufacturing, force trade barriers to be taken down and allow new industries to be created. There have been various different explanations for why President Trump’s new tariff regime made sense. And yet when they were finally revealed on Wednesday one point was clear. There was no logic. The tariffs were just weird.

The big reveal turned out to be a board that flapped around in the wind outside the White House. Donald Trump marked Liberation Day by holding up a placard with a list of countries – each one with a number next to it. The White House has worked out the tariffs it estimates American goods face in each market, and then come up with a retaliatory tariff that it will impose in response.

The trouble is, none of it makes sense. The 67 percent figure for China’s tariffs seems oddly precise, and so does the 39 percent for the EU. Sure, both of them are protectionist blocs, but not to that extent. Further down the list, Vietnam is estimated to impose 90 percent tariffs, and will be hit with 46 percent tariffs in retaliation, while the far more protectionist India will only face 26 percent. It doesn’t follow any consistent pattern. 

A lot of effort has already gone into trying to figure out what Trump was trying to achieve. The task, however, is impossible. Is he trying to stand up to China? If so, why impose tariffs at such a high rate on countries like Vietnam, Thailand and South Korea that are allies of the US in Asia? Surely the US should be trying to keep to them in its orbit? Is he trying to help American manufacturing? Then why exempt Canada from more tariffs? Does he plan to use the tariffs to force down protectionist barriers elsewhere? Possibly, but then why impose 17 percent on Israel, one of the most dynamic economies in the world?

The list goes on and on. The alarming reality is this. The new American tariff regime is just bizarre. It doesn’t have any logic to it, not does it have any consistency, nor any theory of what it is trying to achieve. It is just a random series of numbers that seem to have been plucked out of nowhere. It is chaotic. That is what is scaring the global markets – and rightly so.