The chart below comes from Paul Krugman
Below is a small part of what Paul Krugman a Noble Prize recipient on economics and former writer for the New York Times.
Mr. Krugman translates very difficult economic data to where most people can understand what is happening.
America created the modern world trading system. The rules governing tariffs and the negotiating process that brought those tariffs down over time grew out of the Reciprocal Trade Agreements Act, devised by FDR in 1934. The growth in international trade under that system had some negative aspects but was on balance very good for America and the world. It was, in fact, one of our greatest policy achievements.
Yesterday Donald Trump burned it all down. Here’s what just happened to the average U.S. tariff rate:
The size of the tariffs, however, wasn’t the only shocking thing about the Rose Garden announcement. Arguably what we learned about how the Trump team arrived at those tariff rates — the sheer malignant stupidity of the whole thing — was even worse.
You might be tempted to dismiss complaints about the policy process as elitist snobbery. But credibility is a crucial part of policymaking. Businesses can’t plan if they have no idea what to expect next. Foreign governments won’t make policies that help America if they don’t expect us to respond rationally.
So what do we know about how the Trumpists arrived at their tariff plan? Trump claimed that the tariff rates imposed on different countries reflected their policies, but James Surowiecki soon noted that the tariffs applied to each country appeared to be derived from a crude formula based on the U.S. trade deficit with that country. Trump officials denied this, while at the same time the Office of the U.S. Trade Representative released a note confirming Surowiecki’s guess. Here’s their explanation:
