The President of the United States is currently promising to spend the same pot of money on at least nine different things. The pot in question: revenue from all the random and fluctuating tariff duties that are almost certainly unconstitutional, which means he’s likely going to have to pay some or all of it back. While he’s busy making impossible promises with money that isn’t really his, his administration is simultaneously trying to hide that revenue from the courts to make it harder for companies to recover what they’re owed.
If this sounds like a multi-layered scam, that’s because it is.
I’m sure you’ve heard Trump mention this or that thing he’s planning to spend the tariff revenue on, such as rebate checks, farmer bailouts, better childcare or covering the loss of revenue from the tax cuts he gave to all his billionaire friends.
Ben Werkschkul, at Yahoo Finance, has now detailed nine different things that Trump has promised to fund with the tariff revenue (and I’m pretty sure the number was seven when I first opened the article, but it appears to have been updated).
According to Yahoo Finance’s count, the president has floated at least nine different ideas for how tariff money could be used, stretching back to the 2024 campaign.
The math alone should be disqualifying. The tariff revenue couldn’t cover even a fraction of these nine different spending promises if you added them all up. But Trump appears to be treating this like an endless pool of money—repeatedly spending the same dollars on different programs as if the laws of basic accounting don’t apply to him.
And then, as if to emphasize how much of a criminals scam this is, rather than setting aside funds to pay back what’s likely to be tens of billions in refunds once the Court rules, the Trump admin is already trying to hide the money to make it harder to pay back.
The Trump administration is racing to deposit the money it’s raised from tariffs into the U.S. Treasury, a tactic that could make it harder for companies to get refunds for duties the Supreme Court may strike down in the coming months.
That has triggered a flurry of lawsuits in recent weeks, with companies ranging from wholesaler Costco to canned tuna seller Bumble Bee looking to preserve access to potential refunds for tens of billions of dollars worth of tariff fees. And it foreshadows the messy legal battles likely to play out if the high court rules President Donald Trump overstepped his legal authority when he imposed his steep “reciprocal” tariffs and other duties on major trading partners.
According to court filings and half a dozen people familiar with the cases, Trump’s Customs and Border Protection is denying requests to delay finalizing tariff payments and transferring the funds to the Treasury.
To recap: the administration is collecting what are effectively illegal taxes, rushing to co-mingle those funds with general Treasury revenue to make them harder to trace and recover, while simultaneously promising to spend that same money multiple times over on programs that would cost far more than the tariffs have generated. And they’re doing all of this while the Supreme Court is actively considering whether the tariffs are constitutional in the first place.
Here’s the final insult: when the Supreme Court strikes down these tariffs and orders refunds, American taxpayers will be on the hook to cover those payments. And that’s to pay back money that many of us already paid in the form of higher prices to companies to cover the cost of tariffs.
Trump was swept into office with promises of lowering costs. Instead, he raised taxes massively through tariffs, drove inflation higher, and engineered a scheme where Americans effectively pay twice—once through higher prices, and again through the tax refunds his unconstitutional gambit will require.
The guy who bankrupted a casino and built an empire on stiffing his vendors is now running the same playbook on the American public—except this time, we’re all stuck paying the bill.
For the first time in ten months of near-total congressional capitulation to Trump, five Republican Senators broke ranks on Tuesday, siding with Democrats to block the nonsense tariffs Trump unilaterally declared on Brazil as punishment for their treatment of Trump buddy Jair Bolsonaro.
The US Senate on Tuesday approved a measure that would terminate Donald Trump’s sweeping tariffs on Brazilian imports, including coffee, beef and other products, in a rare bipartisan show of opposition to the president’s trade war.
The legislation passed in a 52-48 vote, with five Republicans – senators Lisa Murkowski of Alaska, Susan Collins of Maine, Rand Paul of Kentucky, Thom Tillis of North Carolina and the former Republican leader Mitch McConnell of Kentucky – joining all Democrats in favor.
It’s a very small thing. But given how completely Congress—and particularly the Senate—has rolled over for every Trump demand since January, any defection is notable. And this one is particularly telling about where the cracks might finally start to form.
To understand why this matters, you need to understand just how absurd these particular tariffs were—even by Trump tariff standards.
The President doesn’t have the power to issue tariffs. That’s supposed to be a power reserved for Congress under the Constitution. Trump has been skirting around that by claiming that the International Emergency Economic Powers Act (IEEPA) allows him to take certain actions in an emergency regarding trade, but the law does not explicitly allow him to impose tariffs under that authority. The Supreme Court is set to hear the case challenging Trump’s interpretation of IEEPA next week.
But even if SCOTUS somehow blesses this IEEPA theory, the Brazil tariffs are uniquely indefensible. Trump’s other tariffs at least gesture at the fiction that trade deficits constitute emergencies. Economically illiterate, sure, but there’s a pretext.
But we have a trade surplus, rather than a deficit, with Brazil. So, instead, Trump just claimed that the “emergency” was stupid actions by Brazil’s Supreme Court to push for censorship on social media. We’re among those who have called out some of those dumb and censorial decisions by Brazil’s Supreme Court. But that doesn’t make any of them an “emergency.” The other reason given: the fact that Brazil actually prosecuted Trump buddy Jair Bolsonaro for… trying to run a coup on the government. That is… not an emergency that lets Trump issue tariffs.
In other words: Trump declared an economic emergency because a foreign country’s courts made decisions he didn’t like about speech online and because they prosecuted his friend for attempting a coup. He may try to call that trade policy, but everyone can easily see that it’s a personal vendetta dressed up in legal language to give his most adoring fans a weak excuse to defend him.
Of course, the House (should Mike Johnson ever bring it back from vacation) is unlikely to move on this bill, and Trump will veto the bill anyway.
But… it’s one of the first real cracks in the MAGA cult red wall of giving Donald Trump anything the special boy wants. In this second Trump administration, it seems like one of the only times the Senate has actually voted against him.
So why now? Why this particular abuse of power?
Perhaps it’s that at least some Republicans can read polls too. This is the least popular president in modern history, and his policies (even the ones we were always told had popular support) are ridiculously unpopular as well. The Economist’s graphic on this is telling. Trump is negative on… basically everything. By a lot.
And, for stupidly unclear reasons, Congress just keeps letting him do whatever the fuck he wants to do.
The polls are brutal. His policies are historically unpopular. He’s tearing down the White House. He’s made the US into a global laughingstock. He’s sending troops into American cities based on myths his advisors are telling him. There are millions protesting in the streets.
And at some point, the political calculus shifts—even for Republicans in gerrymandered districts who’ve spent ten months scared shitless that the MAGA base will turn on them. Eventually, the risk of being primaried by Trump becomes less scary than the risk of being associated with a deeply unpopular president doing deeply unpopular things for transparently personal reasons.
So, no, this isn’t a big shift. But it’s a little one. An important crack in the wall, which hopefully starts to turn into more.
Donald Trump just cut off all trade negotiations with Canada because an Ontario ad campaign quoted Ronald Reagan accurately. The quotes are real. The context is accurate. But Trump called them “fake” and “fraudulent,” and the Reagan Foundation—the institution literally tasked with preserving Reagan’s legacy—backed him up by lying about what their own guy said and even threatening frivolous litigation in support of Trump’s temper tantrum.
Now, thanks to Trump’s meltdown, millions more people are watching Reagan’s actual words. And learning that Trump’s entire tariff philosophy directly contradicts what Reagan believed and said.
The ad that triggered all this is pretty straightforward. A few weeks ago, Ontario Premier Doug Ford launched a $75 million campaign using clips from a 1987 Ronald Reagan radio address about the evils of tariffs and the benefits of free trade. You can see it here:
Ford’s politics are often Trumpian, but he’s not backing down from a stupid trade war. So he pulled Reagan’s own words and ran them as a 60-second spot.
The ad campaign is definitely targeting Republicans and business execs. It first ran on the very MAGA Newsmax and the very business-focused Bloomberg, but has been expanding to Fox News (of course), CNBC, CBS, ABC, ESPN and others.
Apparently, somewhere this week, Donald Trump saw it, and it made him sad. And when Donald Trump gets sad, he lashes out like a six-year-old. He claimed that the ad was “fake” and because of that he was cutting off all trade negotiations with Canada.
If you can’t see that image, it’s Trump spewing on social media:
The Ronald Reagan Foundation has just announced that Canada has fraudulently used an advertisement, which is FAKE, featuring Ronald Reagan speaking negatively about Tariffs. The ad was for $75,000. They only did this to interfere with the decision of the U.S. Supreme Court, and other courts. TARIFFS ARE VERY IMPORTANT TO THE NATIONAL SECURITY, AND ECONOMY, OF THE U.S.A. Based on their egregious behavior, ALL TRADE NEGOTIATIONS WITH CANADA ARE HEREBY TERMINATED. Thank you for your attention to this matter! President DJT
So, first off, it’s a bit weird to cut off all negotiations with Canada based on an ad from one province, Ontario, which is run by a politician from a different party than the Prime Minister. But, okay.
But the bigger issue is the claim that the Reagan quotes are “fake” or “fraudulent.” They’re not. The Reagan Foundation put out this statement, and the only “misrepresentation” is in the Foundation’s own statement:
That one says:
The Ronald Reagan Presidential Foundation and Institute learned that the Government of Ontario, Canada, created an ad campaign using selective audio and video of President Ronald Reagan delivering his “Radio Address to the Nation on Free and Fair Trade,” dated April 25, 1987. The ad misrepresents the Presidential Radio Address, and the Government of Ontario did not seek nor receive permission to use and edit the remarks.
The Ronald Reagan Presidential Foundation and Institute is reviewing its legal options in this matter. We encourage you to watch President Reagan’s unedited video on our YouTube channel.
So, first off, note the difference between what the Foundation said and what Trump said. The Foundation claims that the ad is “using selective audio” in a way that “misrepresents” Reagan. Trump took that claim (which was already bullshit) and said it means the ad is “fake” and “fraudulent.” It is neither.
The Foundation also suggests it might sue, which is laughable. They have no claim here and any attempt to go to court would fail, and fail in an embarrassing manner.
The Ronald Reagan Presidential Foundation has gone fully Trumpy—their website is packed with MAGA interviews—and now they’re lying about what Reagan actually said and believed. The institution designed to preserve his legacy is rewriting it to please Donald Trump.
It’s pathetic.
But, of course, the Streisand Effect kicks in, and now everyone can watch what Ronald Reagan actually said in that address:
It’s only five minutes long. Every quote in the Ontario ad is in there, accurate both in text and in context. The speech was framed around Reagan’s decision to impose tariffs on certain Japanese products in response to Japan dumping below-market semiconductors, which Reagan argued violated an earlier agreement.
However, he was quite clear throughout that he was a strong believer in free trade and against tariffs, and he was only doing this, regretfully, in response to Japan violating an earlier trade agreement.
Reagan explicitly contradicted Trump’s claim that tariffs are “very important to the national security and economy of the US.” Reagan said the opposite.
Incredibly, Trump freaking out and lying about this ad is making many more people watch it and learn what Reagan actually said about tariffs and free trade. Even CNN, which pretty typically just repeats whatever Trump says, is pointing out that Trump’s claims here are nonsense and Reagan very clearly spoke out against tariffs.
On top of all this, Canada is now cutting trade deals with China and other countries in Asia. This is effectively pushing our closest ally into the waiting arms of our biggest economic rival.
This is stunningly bad policy: a foreseeable disaster stemming from a stupid approach to trade, kicked into overdrive by a presidential temper tantrum over accurate quotes from a politician many in the MAGA world pretend to idolize. Trump lied. The Reagan Foundation lied to back him up. And now Canada is cutting deals with China while the world learns that Reagan explicitly opposed everything Trump claims tariffs accomplish.
Congratulations to everyone involved. You’ve Streisanded the world into a history lesson, and handed China a trade partner in the process.
Last week we noted how the Trump administration had cooked up a half-assed wireless phone company. Even calling it a phone company is generous: It’s basically a licensing agreement and a lazy coat of paint on another, half-assed MVNO effort (Patriot Mobile), which in turn just resells T-Mobile service.
A cornerstone of the supposed company was a new $500 Trump T1 phone. To pitch the phone, the press release had a badly photoshopped rendition of what the so-far-nonexistent phone would look like (curiously missing a camera flash), peppered with claims the phone would be “proudly designed and built in the United States.”
As we noted at the time, it would likely be just weeks before people realized the “made in America” claims weren’t true. And it sounds like we didn’t even have to wait that long. The Verge noticed that all of the “made in America” claims have been stripped from the Trump website, replaced with far-more vague language about how the phone is ambiguously infused with American sentiment:
“The T1’s new tagline is “Premium Performance. Proudly American.” Its website says the device is “designed with American values in mind” and there are “American hands behind every device.” Under Key Features, the first thing listed is “American-Proud Design.” None of this indicates, well, anything. It certainly doesn’t say the device is made in the USA, or even designed in the USA. There are just… some hands. In America.”
Trump Mobile folks are still trying to claim the phone will be made in America. At least until press reports in another month or two indicating that’s clearly not true. Again. The Verge notes that the screen size has gotten smaller in the website description, and they eliminated listing RAM specifications for some reason.
Trump operates at a fourth-grade reading level and genuinely believes his ignorant tariff plan will somehow magically force all manufacturing back to the United States. But as countless journalists and analysts have dissected, it would be literally impossible to manufacture an affordable phone in the United States without resorting to slave labor and ignoring all labor and environmental law.
Which is to say the weird Trump zealots might actually believe (or have been told) this is a real thing that they’re capable of, but it’s simply never happening. Still, the Trump boys have been pouring it on thick, with Eric Trump going on TV to claim that not only will the Trump phone be made in the USA, but all company support would be USA based as well:
“You’re not calling up call centers in Bangladesh − do it right out of St. Louis, Missouri, and you’re going to have phones that are made right here in the United States of America,” [Eric said]. He added Trump Mobile is “going to revolutionize cell phones, mobile calling” as it will fully operate in the U.S.
“I really believe we’re gonna have one of the great kind of tech platforms as part of the Trump Organization of any company in the world,” he added.
This is really all just lazy performance art for very dim people.
In many ways a lazily branded mobile phone MVNO hyping a so-far-nonexistent phone pretending to be American made is a perfect encapsulation of the “Trump experience.” Just complete pointless artifice from start to finish, with a singular function: hollow grift in the golden age of corruption.
Remember “Liberation Day”? The day when Trump launched those apparently freedom-loving taxes on all Americans by declaring war on global commerce so hard that we were even planning on taxing penguins on uninhabited islands? Well, some of you might recall that the Constitution distributes power, and doesn’t give it all to the President. And Trump’s tariffs are supposedly based on “emergency” powers. The president can impose certain regulations on foreign countries during emergencies, Congress said — you know, like if Canada nukes us or something. Trump looked at this law and thought: “Perfect! Americans buying stuff from other countries is clearly an emergency.”
His theory (to the extent it can be called a “theory”) goes something like this: trade deficits are an “unusual and extraordinary threat” to America, so the president can declare a perpetual national emergency about… international commerce existing. Every purchase of a Toyota is basically another Pearl Harbor.
Anyway, two courts looked at this theory this week and had some thoughts.
First up: the US Court of International Trade, which is exactly what it sounds like — the court that deals with trade stuff. They took one look at Trump’s tariffs and said, essentially, “The Constitution gives Congress the power to impose tariffs, not the president. This isn’t complicated.”
Now, Congress did pass a law saying the president can “regulate a variety of economic transactions” during emergencies. But here’s the thing: The court noted that declaring every trading relationship with every country to be an emergency is… not really how emergencies work.
The court’s reasoning was pretty straightforward:
IEEPA does not authorize any of the Worldwide, Retaliatory, or Trafficking Tariff Orders. The Worldwide and Retaliatory Tariff Orders exceed any authority granted to the President by IEEPA to regulate importation by means of tariffs.The Trafficking Tariffs fail because they do not deal with the threats set forth in those orders.
Translation: You can’t just declare everything an emergency and use emergency powers forever.
But wait! There’s more. Yesterday, a regular federal court in DC also blocked the tariffs. Judge Rudolph Contreras was equally unimpressed with Trump’s legal theory:
This case is not about tariffs qua tariffs. It is about whether IEEPA enables the President to unilaterally impose, revoke, pause, reinstate, and adjust tariffs to reorder the global economy. The Court agrees with Plaintiffs that it does not
The judge made some pretty devastating points about why Trump’s theory falls apart. First, there’s the basic constitutional problem:
The Court agrees with Plaintiffs that the power to regulate is not the power to tax… The Constitution recognizes and perpetuates this distinction. Clause 1 of Article I, Section 8provides Congresswith the “Power To lay and collect Taxes, Duties, Imposts and Excises.” Clause 3 of Article I, Section 8 empowers Congress “To regulate Commerce with foreign Nations.”
In other words, the Constitution specifically separates the power to tax from the power to regulate trade and gives both to Congress. If Trump could just call tariffs “regulation,” then that whole separation becomes meaningless.
Congress has also been careful when delegating tariff authority to presidents. Every other law giving the president tariff powers comes with “express procedural, substantive, and temporal limits.” But Trump’s reading of the emergency law would “eviscerate” all those careful limits:
Those comprehensive statutory limitations would be eviscerated if the President could invoke a virtually unrestricted tariffing power under IEEPA…. The Court will not assume that, in enacting IEEPA, Congress repealed by implication every extant limitation on the President’s tariffing authority….
Even worse, if the court were willing to accept Trump’s interpretation of the IEEPA, then that would make the IEEPA unconstitutional. Oops!
Defendants’ interpretation could render IEEPA unconstitutional. IEEPA provides that the President may “regulate . . . importation or exportation.” … The Constitution prohibits export taxes. See U.S. Const. art. I, § 9, cl. 5 (“No Tax or Duty shall be laid on Articles exported from any State.”). If the term “regulate” were construed to encompass the power to impose tariffs, it would necessarily empower the President to tariff exports, too. The Court cannot interpret a statute as unconstitutional when any other reasonable construction is available.
Finally, the court notes that in the fifty years since this emergency law was passed, literally no president has ever used it to impose tariffs. That’s… probably relevant.
And, of course, the markets loved this news. Global stock futures jumped when the courts blocked the tariffs, which tells you everything you need to know about how seriously financial markets take Trump’s trade policies.
The White House press secretary, Karoline Leavitt, responded by claiming that courts have no authority to review presidential tariffs at all, which is… an interesting constitutional theory. If you squint, it almost sounds like she’s arguing that federal judges have absolutely no role overseeing executive uses of power, which might come as news to the Supreme Court. Or anyone who is familiar with how the three branches of government work.
Leavitt: The courts should have no role here. There is a troubling & dangerous trend of unelected judges inserting themselves into the presidential decision making process. America cannot function if President Trump has his sensitive diplomatic or trade negotiations railroaded by activist judges.
Leavitt spews this constitutional nonsense with such conviction that you’d almost think she believes it. But despite her protests about “unelected… activist judges” (some of whom were appointed by Trump himself), it remains a simple fact: Donald Trump is no king, and multiple courts keep ruling to that effect.
Meanwhile, late Thursday, Trump himself blew up at the CIT judges and used it to take a surprising swipe at the Federalist Society and Leonard Leo:
If you can’t see that screenshot, here is the jumbo-sized word salad for you:
The U.S. Court of International Trade incredibly ruled against the United States of America on desperately needed Tariffs but, fortunately, the full 11 Judge Panel on the U.S. Court of Appeals for the Federal Circuit Court has just stayed the order by the Manhattan-based Court of International Trade. Where do these initial three Judges come from? How is it possible for them to have potentially done such damage to the United States of America? Is it purely a hatred of “TRUMP?” What other reason could it be?
I was new to Washington, and it was suggested that I use The Federalist Society as a recommending source on Judges. I did so, openly and freely, but then realized that they were under the thumb of a real “sleazebag” named Leonard Leo, a bad person who, in his own way, probably hates America, and obviously has his own separate ambitions. He openly brags how he controls Judges, and even Justices of the United States Supreme Court — I hope that is not so, and don’t believe it is! In any event, Leo left The Federalist Society to do his own “thing.” I am so disappointed in The Federalist Society because of the bad advice they gave me on numerous Judicial Nominations. This is something that cannot be forgotten!
With all of that being said, I am very proud of many of our picks, but very disappointed in others. They always must do what’s right for the Country! In this case, it is only because of my successful use of Tariffs that many Trillions of Dollars have already begun pouring into the U.S.A. from other Countries, money that, without these Tariffs, we would not be able to get. It is the difference between having a rich, prosperous, and successful United States of America, and quite the opposite.
The ruling by the U.S. Court of International Trade is so wrong, and so political! Hopefully, the Supreme Court will reverse this horrible, Country threatening decision, QUICKLY and DECISIVELY. Backroom “hustlers” must not be allowed to destroy our Nation!
The horrific decision stated that I would have to get the approval of Congress for these Tariffs. In other words, hundreds of politicians would sit around D.C. for weeks, and even months, trying to come to a conclusion as to what to charge other Countries that are treating us unfairly. If allowed to stand, this would completely destroy Presidential Power — The Presidency would never be the same!
This decision is being hailed all over the World by every Country, other than the United States of America. Radical Left Judges, together with some very bad people, are destroying America. Under this decision, Trillions of Dollars would be lost by our Country, money that will, MAKE AMERICA GREAT AGAIN. It would be the harshest financial ruling ever leveled on us as a Sovereign Nation. The President of the United States must be allowed to protect America against those that are doing it Economic and Financial harm. Thank you for your attention to this matter!
Since I don’t hate you quite as much as Trump does, I broke up his nonsensical spew into paragraphs to make it marginally more readable.
But there are a few notable points in here: first, Trump believes that any judge that rules against him is somehow bad and hates America. And if they were appointed by him, he’ll now blame Leonard Leo and the Federalist Society. That’s pretty incredible, since the rise of Trump was very, very much enabled by Leo and the Federalist Society, and their efforts to pack the courts with partisan ideological lackeys who would push Christian nationalism and GOP politics forward.
It’s no surprise but is yet another data point confirming Trump’s view that anyone telling him he broke the law must be anti-American. It’s a dangerous authoritarian stance, but not a new one.
Second, Trump, who positions himself as the world’s greatest dealmaker, effectively admits that he can’t get a Republican Congress to actually approve these tariffs.
Third, Trump is the fucking President. Pretending he’s some poor little victim of the Federalist Society ramming through judges he doesn’t like is so stupid. Trump is basically admitting he was played like a fiddle by Leo, which just demonstrates how weak and unqualified he is as President.
Unfortunately, as Trump noted, the Court of Appeals for the Federal Circuit already put the first ruling on hold while they figure out how to handle it and related cases. But, honestly? The legal reasoning in both rulings is quite solid. Trump’s emergency powers don’t extend to “I don’t like trade deficits” any more than they extend to “I don’t like Mondays.” He may never realize that, but the rest of us must retain that basic reality.
This seems likely to reach the Supreme Court fairly quickly, at which point it’s anyone’s guess how those “unelected activist judges” will rule. But for now, we have two federal courts saying the same thing: the Constitution still applies, even to Trump’s economic theories. It may make Trump sad, but it certainly doesn’t make him right.
Okay, there’s a lot to unpack in this story, so hang with me here. For the past month or so, Americans and American businesses have been stuck in tariff hell. Blanket and additional tariffs issued via executive order by Trump have been in a seesaw pattern for a month now. This tariff program was a key campaign promise Trump had on offer and, since becoming President, has been something over which Trump has had an immense amount of pride. Tariffs are good, you see. A boon to the country. A major achievement of this administration. That they haven’t settled on when or how much will go into effect, nor for how long, is of no importance. Neither is the hilariously faulty math and premise that the constructed tariff rates were built upon. Tariffs are great and that’s all you need to know.
Earlier this week, Punchbowl News reported that Amazon planned to include line items on its online store across the board to denote to purchasers just how much of the cost of a product came from Trump’s tariffs. Now, it appears that this report was mostly wrong and that Amazon instead was discussing putting that in place only on its Amazon Haul store, which is a sub-store focused on imported goods from China to compete with the likes of Temu and Shein. And Amazon has since said it has scrapped the plan entirely as well (more on that in a second).
But the point is this: Trump freaked out about a massive online retailer showing American buyers the impact on pricing of the tariffs that Trump is totally proud of and that will bring America into its new golden age. Tariffs are good, you see, but the public knowing what they do is not.
Amazon issued such a specific and forceful on-the-record denial in part because it had drawn the ire of the Trump administration. In a press briefing early this morning, White House Press Secretary Karoline Leavitt was asked a question about the report, which the administration responded to as though Amazon had made a formal announcement about the policy.
“This is a hostile and political act by Amazon,” Leavitt said, before blaming the Biden administration for high inflation and claiming that Amazon had “partnered with a Chinese propaganda arm.”
There is simply no way to square this circle other than to say that Trump knows it will piss off Americans if they see how much cost he is adding to them, rather than to foreign companies and countries as he’s claimed this will all work. So he wants to hide the thing he says is awesome and is proud of from the American people. And he’s willing to put his thumb on commercial interests to do so.
Why? Why is it a bad thing for retailers and manufacturers to inform the public of where the costs of their goods are coming from? If tariffs are so great, why does the public need to be shielded from understanding what they do? These sellers are going to be accused of price-gauging, particularly from anyone who believes Trump’s nonsense claim that anyone but Americans will be paying these tariffs. Why should they endure those accusations in favor of Trump’s game of hide-and-seek?
And why do these tech companies keep bending the knee to this President? They’ve been engaging in this placating routine since the inauguration, when many heads of companies showed up to prove that they could, in fact, manage to stand as Hail to the Chief plays while not having a spine.
CNBC’s Squawk Box, featuring Trump cheerleader Joe Kernan, made the point beautifully in reaction to all of this when Kernan essentially asked why government enforcement efforts against Amazon, such as antitrust litigation, haven’t evaporated now that the company has added boot-licking to its portfolio of services. CNBC makes the clip pretty much impossible to embed here, but at the tail end of it you have Kernan essentially asking aloud why Amazon is bowing to Trump when all this government action is hanging over its head still, with the Wired reporter responding that he doesn’t know, but that Trump keeps that stuff hanging to use as leverage.
Despots are never satisfied or appeased, as is often said.
So, let’s summarize. The Trump administration freaked out over a mostly-wrong report that Amazon was going to be transparent about pricing effects from tariffs, that Trump is very proud of, on its website, so it pressured the company to nix those plans both in the press and via personal phone calls from the President, only to have Amazon once more bend the knee to Trump despite seemingly getting nothing out of it in return.
Totally normal stuff happening around America these days.
We probably don’t need to tell you that the current tariff situation is causing complete chaos in global supply chains, in large part due to the uncertainty — for all we know, the exact rules will have changed since this episode was recorded just yesterday. But we wanted to get some insight into the impact on small businesses, so this week we’re joined by Jesse Vincent, co-founder of Keyboardio (makers of one of Mike’s favorite keyboards, who recently wrote an open letter to their US customers), to talk about the challenge of running a business amidst Trump’s tariff chaos.
What a surprise. The man who clearly doesn’t understand tariffs doesn’t understand drug trafficking. President Trump has repeatedly claimed the flow of illicit Fentanyl into the United States justifies hitting countries like Mexico, China, and Canada(???) with super-high tariffs, under the weird assumption that starting a trade war is the best move to make in a drug war.
Of the many things Trump doesn’t understand (or doesn’t care to understand) about tariffs, this latest bit of Truth Social activity (at nearly 1:00 am on a school night) makes it clear Trump also doesn’t understand how drug trafficking works. His April 1st post on his own social media service contains the expected free-form, randomly-capitalized, stream-of-unconsciousness we’ve come to expect from Trump social media missives.
But the most inadvertently hilarious part of this tirade is the assumption that tariffs can somehow make it unprofitable for people to illegally export products.
If you can’t read this or see the embed, consider yourself somewhat lucky. But since we’re discussing the content of this post, here’s what it says:
Mitch McConnell of Kentucky, Susan Collins of Maine, Lisa Murkowski of Alaska, and Rand Paul, also of Kentucky, will hopefully get on the Republican bandwagon, for a change, and fight the Democrats wild and flagrant push to not penalize Canada for the sale, into our Country, of large amounts of Fentanyl, by Tariffing the value of this horrible and deadly drug in order to make it more costly to distribute and buy. They are playing with the lives of the American people, and right into the hands of the Radical Left Democrats and Drug Cartels. The Senate Bill is just a ploy of the Dems to show and expose the weakness of certain Republicans, namely these four, in that it is not going anywhere because the House will never approve it and I, as your President, will never sign it. Why are they allowing Fentanyl to pour into our Country unchecked, and without penalty. What is wrong with them, other than suffering from Trump Derangement Syndrome, commonly known as TDS? Who can want this to happen to our beautiful families, and why? To the people of the Great States of Kentucky, Alaska, and Maine, please contact these Senators and get them to FINALLY adhere to Republican Values and Ideals. They have been extremely difficult to deal with and, unbelievably disloyal to hardworking Majority Leader John Thune, and the Republican Party itself. MAKE AMERICA GREAT AGAIN!
That’s what the man said on main: we have to slap tariffs on illegal imports of illicit drugs. Somehow, the Democratic party is failing the Make America Great Again version of America by refusing to slap tariffs on a product that is being smuggled into the country far more frequently than it’s being declared at border crossings.
Canada isn’t even the problem, even if we agree with half of this non-logic. No one honestly considers Canada to be part of the mostly imagined “border crisis.” And, even if we give Trump far more credit than he deserves, this statement makes it clear Trump actually believes he can curb illegal drug trafficking by making it far more expensive to move fentanyl legally across the US/Canada border. All this does is increase the market for illegal, unregulated fentanyl because acquiring it legally will no longer be the less expensive and/or easier option.
And for all the talk about fentanyl being “terrible and deadly,” there are actual legitimate medical uses for the synthetic opioid. Patients who could be helped by this drug will be forced to use other, less effective options or, in worst case scenarios, be priced out of the market entirely.
The worst part of all of this is that it’s merely performative. Trump doesn’t actually care about fighting fentanyl trafficking or limiting abuse of the drug. He just wants to keep throwing tariffs at Canada because pretty much every politician in the country has told Trump to fuck right off with his “51st state” bullshit. And he’s literally stupid enough to believe that slapping tariffs on legal drugs will limit the flow of illicit drugs into the US. And no one will be able to convince him otherwise — not only because no one in his party will even make the attempt, but because he’s so self-deluded it’s literally impossible to change his mind.
Last week, Mike put together a detailed post explaining the Trump tariff rollout, how the calculations for it were built, some of the more idiotic aspects of it, and basically how stupid the whole program is. If you haven’t read the whole thing, you really should. If you want the briefest of summaries: Trump based his tariff rates not on opposing tariffs, but on trade deficits, which generally made no sense and also led to him declaring a trade war on an island filled with (presumably communist) penguins.
While it is all very, very dumb, the tariff program will also have very real world effects on Americans. The primary effect will be that a ton of stuff we regularly buy will get more expensive, as makers will pass along the cost of the import tax to all of us, while domestic companies will probably just raise their own prices as well to generate better margins with less competition. But higher prices are only one negative outcome for American consumers. International businesses have also watched the chaos that has been Trump’s messaging on tariffs such that some, like Nintendo, have decided to play a wait and see game.
Switch 2 pre-orders were supposed to begin on April 9. No longer. In an unprecedented move, Nintendo announced on Friday that it’s halting pre-orders for its upcoming $450 hardware launch because of new tariffs in the U.S. set to go into effect beginning on April 5.
A statement from Nintendo, first obtained by GameSpot, reads: “Pre-orders for Nintendo Switch 2 in the U.S. will not start April 9, 2025 in order to assess the potential impact of tariffs and evolving market conditions. Nintendo will update timing at a later date. The launch date of June 5, 2025 is unchanged.”
As a result of this, major American retailers that were about to start collecting revenue for the pre-orders, well, won’t. It’s a temporary situation, certainly. The Switch 2 will eventually be sold in America. But you don’t get this time back, either. On the heels of Nintendo announcing the new console publicly, this is exactly when you want to cash in on the hype by taking in pre-orders for the console. American retailers are going to miss out on that, it seems.
And the demographic cross-section that is represented by gaming customers is both expansive and not the sort of folks the GOP should be looking to piss off politically. Young people and families make up the customer base. These are the exact people that Trump and Republicans rode to victory. And the exact people that can do the most damage to the GOP in the midterms.
The rest of the gaming industry had damned well better be paying attention to this, given what it portends for their businesses down the road.
The Entertainment Software Association, a U.S. trade group that represents Nintendo and other gaming companies, said the tariffs “are going to have a real and detrimental impact on the video game industry.” ESA senior vice president Aubrey Quinn told Game File this week “Every company, every industry, the video game industry included, needs to think about what’s best for consumers, best for business, and best for employees. Supply chains are complicated and, certainly, supply chains don’t change overnight. Everything that is considered or decided can’t be a quick turnaround and can’t be a knee-jerk reaction to any particular announcement.”
It’s not a secret that I don’t think much of the ESA generally, but it’s also notable that this industry group’s sole reason for being is to lobby for whatever is best for the big gaming industry players. When that group is issuing warnings about Trump’s tariff program, you know we’re in for a bumpy ride.
There’s a fundamental problem with Donald Trump’s new trade policy: it fails a test that actual 5th graders can pass. I know this because I tried explaining his “Liberation Day” trade plan to one last night. Here’s how that conversation went:
“Imagine you want to buy a toy at a store which costs $50. You pay for the toy and walk away with it. The President looks at that transaction and says ‘wait, you paid the store $50 and the store paid you nothing, therefore the store is stealing from you. To “fix” this, I’m going to tax the store $25. From now on that same toy costs $75.”
The 5th grader looked at me like I was crazy. “Whaaaaaaat? None of that makes sense. If I pay for something, it’s not stealing. And taxing the store seems stupid, and then everything is more expensive. Why would anyone do that? That can’t be how it works.”
This is the core problem with Trump’s “Liberation Day” trade policy: it fundamentally misunderstands what trade deficits are. And if you think that’s bad, just wait until we get to the part where this policy declares economic war on penguins and our own military base.
The policy, unveiled yesterday afternoon, is called a “reciprocal tariff plan,” which is a bit like calling a hammer a “reciprocal pillow.” The premise is that since other countries have high tariffs on us (they don’t), we should have high tariffs on them (we shouldn’t). But that’s not even the weird part.
At the heart of this policy is a chart. Not just any chart, but what might be the most creative work of economic fiction since, well, Donald Trump launched his memecoin. Trump proudly displayed these numbers at a White House event, explaining that they showed the tariffs other countries impose on the US. He emphasized repeatedly that the US was being more than “fair” because our reciprocal tariffs would be less than what other countries were charging us.
There was just one small problem: none of the numbers were real tariff rates. Not even close. Vietnam, according to the chart, imposes a 90% tariff on US goods. This would be shocking news to Vietnam, which does no such thing.
At first, observers assumed the administration was simply inventing numbers, which would have been bad enough. But the reality turned out to be far more stupid. James Surowiecki stumbled into what was actually happening:
Let’s pause for a moment to appreciate what Surowiecki discovered. The administration didn’t just make up random numbers — that would have been too simple. Instead, they invented a formula that manages to be both more complicated and more wrong: they took our trade deficit with each country and divided it by that country’s exports to us.
So for Indonesia, the math went like this:
US trade deficit with Indonesia: $17.9 billion
Indonesia’s exports to the US: $28 billion
$17.9B ÷ $28B = 64%
Therefore (according to this logic), Indonesia must be charging us the equivalent of a 64% tariff
This is roughly equivalent to calculating your coffee shop’s markup by dividing how much coffee you buy from them by how much coffee they buy from you. Which would make sense if you were in the coffee business, but you’re not.
When confronted about this methodology, the administration didn’t backtrack. They just admitted it:
“The numbers [for tariffs by country] have been calculated by the Council of Economic Advisers … based on the concept that the trade deficit that we have with any given country is the sum of all trade practices, the sum of all cheating,” a White House official said, calling it “the most fair thing in the world.”
Whoever on the Council of Economic Advisers used this formula should turn in their econ degree, because this is not how anything works. Even if they then go on to publish another version of the formula that looks all sophisticated and shit:
This is what happens when you ask ChatGPT to “make my wrong econ math look more scientific.” The document even admits that they couldn’t figure out the actual tariff rates, so they “proxied” them with this formula instead. That’s a bit like saying you couldn’t find your house keys, so you proxied them with a banana.
The fundamental problem here isn’t just that the tariff numbers are wrong — though they absolutely are. It’s that the entire premise rests on treating trade deficits as if they were tariffs. They’re not the same thing. At all.
Let’s back up for a moment and talk about trade deficits, because Trump has been getting this wrong for longer than some of his supporters have been alive. His logic appears to be:
“Deficit” sounds bad
Therefore, trade deficits must be bad
Therefore, countries with whom we have trade deficits must be cheating us
Therefore, we should punish them with tariffs to “level the playing field”
Remember that 5th grader from earlier? They already understood what Trump doesn’t: when you buy a toy for $50 at a store, you have a “trade deficit” with that store. You gave them $50, they gave you $0. But you also got a toy. That’s not the store cheating you — that’s just how buying things works.
A trade deficit between countries works the same way. When we have a trade deficit with a country, it just means we bought more stuff from them than they bought from us. We got the stuff. They got the money. That’s it.
Trump’s solution to trade deficits (which aren’t a problem) is to impose tariffs (which don’t help). In fact, they can often make things worse. According to actual economists who study this stuff, higher tariffs can actually lead to higher trade deficits, not lower ones.
Joseph Gagnon, one of the world’s foremost experts on trade deficits, explains exactly why this is such a bad idea:
Although tariffs do not reduce trade deficits, they do reduce imports and exports, as well as total income. That’s because they force a country to shift resources from more profitable exports to less profitable imports, as well as to services. But the long-run economic effects are also negative. By shielding producers from foreign competition, a tariff ultimately leads to less business innovation, slower productivity growth, and lower household living standards.
You might notice something about that paragraph. It starts by describing how tariffs hurt the economy in the short term. Then there’s a “but” — which usually signals some kind of silver lining. Instead, it just pivots to explaining how tariffs hurt the economy even more in the long term.
Cool.
So we have a policy that:
Is based on a fundamental misunderstanding of trade deficits
Uses made-up numbers derived from a nonsense formula
Would actually make the “problem” it’s trying to solve even worse
Will definitely make Americans poorer
But wait, it gets better.
All of this glosses over the fact that “reciprocal tariffs” are not reciprocal at all. Trump’s team is making up fake tariff numbers for foreign countries based not on anything having to do with tariffs, but on trade deficits, which is just an accounting of inflows vs. outflows between two countries. It’s only reciprocal because the Trump team faked the numbers.
On top of that, Trump can only impose tariffs (normally a power of Congress) based on the International Emergency Economic Powers Act and the National Emergencies Act. Both laws require there to be an actual “emergency.” The only emergency here is that nobody in the administration understands what trade deficits are.
But at least we may know where they got their brilliant formula from. There has been some suggestion that the administration got the idea from AI — specifically from asking a large language model how to calculate “fair” tariffs based on trade deficits. And yes, when asked “What would be an easy way to calculate the tariffs that should be imposed on other countries so that the US is on even-playing fields when it comes to trade deficit? Set minimum at 10%,” several AI models did suggest something similar to the administration’s approach.
guess where they got their weird trade deficit math from?i went to the pit for y'all and brought back the screenshots with alt text
But here’s the thing: every single AI model also included very clear warnings about why using this formula would be catastrophically stupid. I tested this myself with multiple LLMs (Claude, Gemini, DeepSeek, Llama, and Copilot), and they all basically said “Well, if you insist on doing something this economically illiterate, here’s how you could do it, BUT PLEASE DON’T.”
My favorite was DeepSeek, in which I had its reasoning turned on, and it seemed particularly perplexed as to why I would try to balance trade deficits with tariffs, but felt resigned to do so:
That’s a little small to read, but it says:
Wait, but is this the right approach? I mean, tariffs can have various effects. If you impose a tariff, it might lead to retaliation from other countries, which could hurt US exports. Also, higher tariffs could increase prices for consumers in the US, which isn’t great for the economy. But the user is specifically asking about balancing the trade deficit, so maybe those considerations are secondary here.
Yeah, that’s literally DeepSeek grappling with the fact that the user here (the US government) is asking for a fundamentally stupid thing without understanding the consequences.
The administration appears to have taken only the formula and ignored all the warnings. Which would be merely sad if they were just playing with theoretical numbers. But they’re not. They’re actually implementing this policy, using emergency powers that are supposed to be reserved for actual emergencies — not “we don’t understand how trade works” emergencies.
Which then brings us around, finally, to the penguins.
Because MAGA’s best economists are implementing it so mechanically, applying their formula to every country in what appears to be the CIA World Factbook, we end up with some truly spectacular results.
Let’s take a closer look at the very last page of the administration’s tariff list:
Now, you might notice a bunch of these entries show a flat 10% tariff rate. That’s what happens when a “country” has no trade with the US at all — the formula defaults to the minimum. A mildly competent team might have wondered why these places have zero trade with us and done a quick check before declaring economic war on them.
But this team isn’t mildly competent. This team is extremely, profoundly, impressively incompetent.
So let’s look at who exactly we’re launching a trade war against, starting with the Heard and McDonald Islands. Total population: zero human beings. The only residents are some absolutely stunning penguins. You can actually adopt one if you want — though I suppose that may now cost 10% more, thanks to Trump’s tariff.
But that’s not even the best part. Just a few lines up, you’ll find the “British Indian Ocean Territory,” also known as the Chagos Islands. Nearly all of the humans currently on these islands are US military personnel at the Diego Garcia base. And they’re only there because, as detailed in a recent Behind the Bastards podcast, the British government forcibly expelled all the native inhabitants to lease the territory to the US military.
Let that sink in for a moment: Donald Trump just imposed tariffs on our own military base. On territory we lease. Where the only residents are US military personnel.
So to sum up where we are:
The administration invented an economic emergency
To justify a policy based on made-up numbers
Generated by an AI formula that came with explicit warnings not to use it
Which they’re now using to launch trade wars against:
Penguins
Our own military
And presumably Santa’s Workshop (someone check for a North Pole entry)
And while the penguins and military base make for amusing examples of this policy’s incompetence, the real damage will come from applying this same backwards logic to basically all of our actual trading partners — countries whose goods and services make American lives better and whose economic relationships we’ve spent decades building. And who, historically, welcomed back American goods and services as well. All of that is now at risk because someone couldn’t be bothered to learn what a trade deficit actually is. And the American electorate deciding that’s who we wanted to govern the country.
When your trade policy is so fundamentally misguided that you’re declaring economic war on flightless birds and your own armed forces, perhaps it’s time to admit that the 5th grader from the beginning of this story wasn’t just smarter than the administration — they were dramatically overqualified for Trump’s Council of Economic Advisers.
