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Good morning,

Are we feeling liberated yet, folks? There’s a lot to get to today, but before we start, can we take a moment to chuckle at the White House referring to its big tax hike as “Liberation Day”? Just a touch heavy handed. It’s like how when you come across a country with “Democratic Republic of…” in its official name, it’s a safe bet there’s not a whole lot of democracy going down there.

If you’ve been with us for a while you are likely sick of me explaining how I am trying to cover this administration with more of an open mind, instead of falling into the media’s knee-jerk reaction pose of “whatever Trump does is ipso facto bad.” But they make it so damn hard.

So the president comes out yesterday to announce these “reciprocal” tariffs in a big to-do in the Rose Garden just after the stock market closes (there’s your first tell). He starts by saying that the U.S. is going to do a 10% baseline tariff on all imports. OK. If he had just stopped there, we wouldn’t be looking at Dow futures down 1,000+ this morning. Instead, markets would be having a “relief rally” because there would finally be some certainty around this policy. Businesses could plan around that.

But then Trump whips out this big chart with all the countries that are allegedly “ripping us off” who get their own, additional tariffs based on, evidently, how unfair Trump believes them to be treating us. This chart includes everyone from China (ok, true), to the U.K. (?) to… Cambodia. Finally, we have a president who is not afraid to stand up to those damn Cambodians! As a rich American with an insatiable appetite for cheap crap, how dare those poor Cambodians pull themselves out of poverty by building an export economy around delivering me said cheap crap! We’ll show them!

We haven’t even mentioned the crazier part of all this, which is where those tariff levels on the chart came from. It appears that the administration simply took the trade deficit we have with each country and divided it by our imports from that country. That suggests an almost comical misunderstanding of free trade. We have trade imbalances because we are a big country full of wealthy consumers and it’s cheaper and more efficient to source certain goods from elsewhere. Take coffee. We don’t grow a lot of coffee beans here because the climate isn’t right. Indonesia has a perfect climate for coffee, and grows a lot of really good beans, cheaply. We’re now going to put a 32% tax on coffee beans from Indonesia, simply because Indonesia has a high tariff on coffee imports, which is meaningless to us because—again—we don’t export coffee. This is how trade wars spin out of control.

Politically, let’s do some best case/worst case triage. The best case scenario is that Trump is going to see that this was a mistake and/or will use it as a tool of leverage to make a bunch of “deals” with these various countries after they come kiss the ring, and he can then use those agreements as cover to declare victory and pull back before we go into a self-made recession (50/50 chance now, per Polymarket).

The worst case scenario, the one I fear, is that we’re really looking at Donald Trump unbound. He likes tariffs because it puts him in a position of power over others. And unlike last time, there isn’t a Steve Mnuchin figure in the administration who is capable of telling him no. (Steve, if you’re reading this, I am sorry for everything bad I ever said about you. It turns out you were keeping the train on the tracks the whole time.)

Sorry, I just don’t buy the MAGA explanation that this is about onshoring our manufacturing base. It’s too backwards looking. No amount of tariffs are going to reindustrialize the Midwest. The steel plants that allowed my grandparents to raise a comfortable middle-class family in western Pennsylvania aren’t coming back. That ship has sailed. We are in a globalized economy whether we like it or not. We’re on the precipice of a potentially world-changing technological breakthrough in AGI and we’re talking about… making dishwashers?

I am working myself up here but I just don’t see how this is anything other than one of the worst economic policies ever instituted in my lifetime and just a complete own goal. If you don’t agree, look again at the market this morning. I appreciate that the stock market isn’t the economy, but the fact that everything is down across the board tells you that what Trump did yesterday was not at all “priced in” and was actually worse than expected. He likes to deflect blame on the “fake news” or Democrats or whomever, but the market doesn’t lie. You can’t argue with it, you can’t spin it, you can’t blame or intimidate it. It’s simply a forward-looking mechanism for growth and stability. And it is telling him that he is making a big mistake.

President Donald Trump has imposed sweeping new tariffs on all imported goods and unveiled a detailed list of reciprocal duties targeting more than 60 countries, asserting that the move is necessary to combat trade imbalances and restore U.S. manufacturing. “This is Liberation Day,” Trump said during a Rose Garden ceremony, holding up a printed chart of countries and their new tariff rates. See the full list.

Also happening:

• Russia escapes Trump’s tariffs: Russia was notably absent from President Donald Trump’s sweeping tariffs, which are set to affect almost the entire world. The White House said sanctions imposed on Moscow because of Russian President Vladimir Putin’s full-scale invasion of Ukraine had already ensured that there was no meaningful trade between the countries. Read more.

• Eric Adams corruption case: A federal judge has dismissed the corruption case against New York City Mayor Eric Adams, a decision that spares the Democrat from an April trial and potential political fallout ahead of the city’s upcoming primary election. The ruling follows a rare request from the DOJ to abandon its own case, citing the need for Adams to support the Trump administration’s immigration priorities. Here’s the latest.

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