Crypto concerns are likely driving a lot of Trump “policy”

By Paul Krugman. I very much share his entirely well-grounded suspicions.

By now it’s obvious that Donald Trump suffers from CBS — Cowardly Bully Syndrome.

On Friday, Trump blasted China’s new export controls on rare earths, declaring them a “moral disgrace” which were “obviously a plan devised by them years ago.” And he threatened to impose 100 percent tariffs on China, on top of the already high existing tariffs.

Less than a day later he was groveling…

This was the largest one-day crash crypto has experienced so far. My question, however, is why the prospect of an intensified trade war caused a crypto crash…

The answer, I believe, has little to do with economics and everything to do with politics. These days crypto derives its value largely from the support of politicians and government officials — in particular, officials who can be bribed. As a result, at this point crypto is largely a Trump trade. And crypto fell because the backlash against the potential trade war threatened to weaken Trump politically. - The National Memo

Trump's tariff stupidity and small businesses

Most media attention is focused on big corporations, but this arguably matters more.

As of 2023, of those U.S. companies that import goods, more than 97% of them were small businesses. For these companies, tariff uncertainty isn’t just frustrating – it’s paralyzing…

The data backs up our anecdotal experience: More than 70% of small-business owners say constant shifts in trade policy create a “whiplash effect” that makes it difficult to plan, a recent national survey showed.

Unlike larger organizations with teams of analysts to inform their decision-making, small-business owners are often on their own. In an all-hands-on-deck operation, every hour spent focusing on trade policy news or filling out additional paperwork means precious time away from day-to-day, core operations. That means rapid trade policy shifts leave small businesses especially at a disadvantage. - The Conversation

Trump tariffs worsen the "pink tax"

Certainly because of their general ideology this is about the last thing the pro-tariff crowd is likely to worry about.

The pink tax is the extra price women pay for products that are also marketed to men — think shampoo or clothing. Back in 2015, the New York City Department of Consumer Affairs found that across five industries, women were paying more for everyday products than men:

- 7 percent more for toys and accessories

- 4 percent more for children’s clothing

- 8 percent more for adult clothing

- 13 percent more for personal care products

- 8 percent more for senior/home healthcare products

Although recent evidence suggests that the pink tax doesn’t apply to every product, it was already more expensive to import items for women than it was for men. Experts have dubbed this the “pink tariff.” As of 2022, US clothing tariff rates were more than three percentage points higher for women (16.7 percent) than they were for men (13.6 percent). When I heard the news that more tariffs were on their way, my immediate thought was the following: Being a woman in America is about to get a whole lot more expensive, especially because of the beauty industry. - Public Notice

Trump in full-on lunatic mode as his trade policy crushes farmers

I know, when is he not in “full-on lunatic mode?” Anyway:

President Donald Trump is seeking an additional $15 billion in U.S. subsidies in an effort to protect farmers from the devastating impact of his trade war with China. That’s on top of $12 billion already earmarked for the farmers to help them weather the fallout.

That would be an additional bill for U.S. taxpayers already shouldering the cost of increased tariffs in the form of higher costs for products and parts from China. 

Trump revealed the subsidy figure in a tweet Friday. He suggested the government use the funds to buy agricultural products to ship to other nations for humanitarian aid, though setting up such a system would be extremely complicated. In his most recent budget proposal, Trump proposed eliminating three food aid programs, Politico noted.

The president appeared to dismiss the impact of the cost as he falsely claimed — again — that “massive” tariff payments are being paid by China “directly” to the U.S. Treasury, which would presumably be used to cover the cost of the subsidy. There is “absolutely no need to rush” to negotiate a deal with China, he tweeted. - Huffington Post

Even South Dakota’s right-wing governor is bemoaning what Trump is doing. But I’ve seen little indication that his political support is really plummeting in farm country the way it should. Making that happen would seem to be a “hard row to hoe.” (Weak, I know. I typed it anyway.)