Trump Administration appears to be kicking lots of own goals

Soon after the US President announced – Liberation Day tariffs – I wrote this blog post – US government is pinning its tariff hopes on some unlikely to be realised assumptions (April 7, 2025) – to help readers understand what logic there was, if any, in the decision by the American government to impose wide-ranging and seemingly random tariffs on the rest of the world. The only apparent logic was that his advisors thought that while the tariffs would variously increase the US dollar price on final goods and services available to US consumers via imports, the flood of global investment funds into US treasury bonds, as a result of the heightened global uncertainty would push the US dollar up and offset the tariff impacts on import prices, because all foreign goods would now be cheaper. We now have a few weeks of data available to see whether things are turning out as Trump and his advisors thought. The definitive answer to date is that the opposite trends are emerging which will see the burden of the tariffs borne by the US consumers and producers rather than the presumption of the Administration that the burden would be pushed onto the rest of the world, which would precipitate rapid change in the favour of the US. It seems at present that an ‘own goal’ is being kicked – and – probably a lot of them.

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US cars don’t sell in Japan because they are inferior and ill-suited to the market

It’s obviously becoming difficult to keep track of where the US government policy is on any particular day. Last week, it was ‘Liberation Day’, which included tariffs being imposed on remote penguin colonies in the back of nowhere, then Musk labelling the Trump’s trade adviser ‘dumber than a sack of bricks’, then tariffs on Chinese goods rising to 124 per cent (which will make then uncompetitive), then the ‘pause’ on reciprocal tariffs beyond the 10 per cent level … what will be next. These shifts and decisions are not exactly benign and the US Administration is displaying the sort of incompetence, capriciousness, flippancy – whatever you want to call it – that hardly befits the largest economic nation in the globe which has its tentacles spread far and wide. I was particularly interested though in the now infamous ‘Rose Garden Liberation Day’ speech Trump made last week (April 2, 2025) where he made claims about Japan, which were used to justify the imposition of 24 per cent tariffs on that nation. According to the President, Japan is among a host of countries that have “looted, pillaged, raped and plundered” the US. His evidence? None is available. The reality is that US cars don’t sell in Japan because they are inferior and ill-suited to the market. We explore that theme in this blog post.

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US government is pinning its tariff hopes on some unlikely to be realised assumptions

Last week, the US President honoured his election promise, indeed his long-held commitment, to increase tariffs on imported goods and services to the US. The formula they came up to differentiate between countries was bizarre but I don’t intend commenting on that here, except to say, the imposition of tariffs on the – Heard Island and McDonald Islands – which are an ‘Australian external territory’ that is a ‘a volcanic group of mostly barren Antarctic islands, about two-thirds of the way from Madagascar to Antarctica’ (where penguins live) ranked up there with their Signal chaos. These guys have access to the ‘red button’ after all. That’s the scary thing. Anyway I was sent a document that seemingly is the theoretical rationalisation for the tariff decision (thanks Mahaish, appreciated) and so I thought I would give it some time.

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