A Recipe For Economic Implosion
It looks inevitable
70% of the products sold on Amazon.com are made in China. Currently there are no container ships on their way to the US from China and U.S. ports are nearly at a standstill. There is typically a five to seven week lag for orders to reach us, but nothing right now is typical.
The de minimus import provision that exempted shipments worth less than $800 that are shipped direct to consumers from tariffs is over. That means tariffs now apply to everything coming into the country.
After Donald Trump’s Liberation Day announcement we knew there would be a kind of grace period as products already here filled our needs but that is now over and those products are largely gone.
All of this is more than a bunch of factoids about imports. This is reality. If 70% of all goods Amazon sells are Chinese, we can assume 70% of almost everything is likely made in China. Some e-commerce sites are already displaying the added charges due to tariffs despite Amazon being slapped down by Trump when it was rumored they would do the same.
That would have been a bit too much reality for Donald Trump to bear because it would have graphically showed Americans just how much his schemes are costing us, and it’s a lot. The Trump plan, if you can call it that, is to threaten anyone speaking truth to power and to blatantly lie when that does not work. But, eventually he cannot control the story anymore and the blowback will be severe.
Unfortunately their response to that is to attempt to control an entire population through fear, but this a big country and that is going to be a lot harder than they seem to think. Stephen Miller, Trump’s Joseph Goebells can talk about suspending Habeas Corpus aka due process, but that assumes the entire policing system of the country will go along with that.
Personally, I do not think they would. Unlike dictatorships like Russia, there is not a national network of spies, informers, gulags, and other enforcers at the beck and call of the President. That network in Russia and other autocracies was built up over decades, not months.
Nevertheless, I realize I’m painting a pretty bleak picture but that’s what I’m seeing right now. It’s entirely possible, that when faced with an economic rebellion by the same people who elected him, Trump backs down quickly. We’ve seen that over and over again, but things this time may be out of his control if they ever were in control.
It looks like backing down quickly may no longer be an option for an administration that has cultivated a reputation for chaos and uncertainty, a reputation that they will find nearly impossible to shake. That looks like a done deal, one they seem to have never considered.
We’re nearing the fifth month of the second Trump administration and there is still no sign that anything good can come out of any of their actions, a startling thing to think about. No Presidency in recent decades has failed so widely and so quickly and there is no sign of a turnaround in sight. Instead Trump doubles down on his imaginary ‘deals’ and the imaginary benefits they create. It’s lalaland on steroids and it is going to affect all of us (excepting the very wealthy) equally. Even the wealthy will see their wealth lessen as markets freeze up or go into free fall.
Today Trump announced a deal with China that would reduce their tariffs to 30%, still a large number. The problem with these announcements is they change constantly and, as a result, people are putting big life decisions on hold. The Guardian has polling today showing Americans, by large majorities, are holding off on vacations, having babies, and other major financial decisions due to the overwhelming uncertainty about nearly everything, created by the Trump administration.
That is certainly the legacy of his wild swings and declarations with no substance. But this morning it got worse as Trump said this:
"People thought it was 15 because they were doing 15," Trump said. "We made it 50 because I misunderstood the 15. I thought they said — I said, you got to get 50 because when I asked — if you remember the story — when I asked, what are we doing with them? My secretary of agriculture at the time, Sonny Perdue, said, uh, sir, it's about $15 billion and we're asking for 15. And I thought he said 50. So, I said — so they came back with the deal at 15 and I said, no way, I want 50 because you said 50. They said, sir, we didn't say that. Anyway. Bottom line, I said, go back and ask for 50. And they gave us 50, and they were honoring the deal, and we would call them up a lot for the corn and for the wheat and for everything."
How confused? He appears to be referring to events that took place in his first term, including the name of the agriculture secretary. Frankly, if any of the above makes any sense to you, shoot me a note explaining it. Because this seems like a brain that is declining rapidly into incoherence.
The general consensus on the China deal on tariffs is that Trump and Bessent caved in because they desperately needed some good news about the tariffs. It may be that Trump feared being labeled Scrooge at Christmas when toys are scarce and expensive and everyone is pinching pennies.
I would be remiss to not mention the $400 million plane offered to Trump by the royal family of Qatar, which would be the most blatant bribe ever offered to an American politician. Trump of course enthusiastically accepted it despite it being totally illegal to do so.
I suspect he will never take delivery on that jet as there is a lot of blowback from his own people, including senior wack job Laura Loomer, who is a MAGA true believer, even as many other true believers are jumping off the sinking ship. But the luxury jet, described as a flying palace, is just this week’s news and will soon be replaced by some other lunacy.
All of this nonsense is serving as an effective coverup for the real damage being cooked up behind the scenes as the Republicans in the House try to create a budget entirely designed to please their fearless leader, who is not named Mike Johnson. I read the news too much and I have no idea what that budget will look like. I suspect I am not alone.
A part of me wants to give up this writing and go meditate in the woods. But walking away from reality is not an option these days for me. It’s not an option for any of us, no matter how powerful denial can be. That’s because this stuff is going to be in our faces, all of our faces.
Now Trump is over in the Middle East making weapons deals with the murderous dictator of the Saudis and trying to justify accepting that big jet. But that big jet is turning out to be a big problem with big people on both sides of the political fence opposed to it.
Qatar is a country closely aligned with terrorist groups, including Hamas. In order to use that plane as Airforce One, it would have to be gutted and entirely rebuilt for security purposes, with some estimates that it would cost hundreds of millions and take years. Meanwhile Boeing is set to deliver purpose built new Airforce One next year.
So the Qatar ‘gift’, obviously a bribe, is essentially worthless and simply pandering to Trump’s massive ego, demonstrating again that he can be played by appealing to his vanity.
Despite Trump buddying up to Bibi Netanyahu, he notably will not see the Israeli dictator on this trip, a snub of huge proportions. But also yet another indicator that Trump switches loyalties depending on which way the wind blows, more inconsistency which is the only thing consistent about this President.
I know, it’s a lot. I can’t keep up with it and my thing is to try and see the possible consequences of all this chaos and write about them. That’s a challenge to say the least.
(Sorry to go on so long but this history is unfolding minute by minute and will be for the foreseeable future)
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Martin