FACT: Alarm clocks, baby strollers, battery-powered sex toys, and thermos bottles may vanish from American stores by the end of May.

THE NUMBERS:  Year-on-year drop in container arrivals at Port of Los Angeles – 

 

May 2024 / May 2025*	-33.0%
February 2008 / February 2009	-32.6%
March 2019 / March 2020	-30.9%

* Comparing scheduled container cargo arrivals for April 27 to May 17, 2025, with actual cargo arrivals in May 2024.

WHAT THEY MEAN:

Here’s the Treasury Secretary Mr. Bessent in March, advocating higher tariffs and lecturing his audience: “Cheap goods are not the essence of the American dream.”

Since then the Trump administration has released a turbid stream of extra-Constitutional “emergency” and “national security” decrees raising tariff rates, mixed with amendments to these decrees to raise rates higher, exempt some goods, or change policy for particular countries. They are complex and frequently change (as with yesterday’s complicated rewrite of the March auto decree). But taken together, and as of this week, they basically leave a tariff rate of 10% for almost all goods (with exceptions for many Canadian and Mexican products and energy), plus the 1.4% average for the permanent, Congressionally authorized tariff system, and 145% on most Chinese-made goods (with exceptions for smartphones and some other IT goods). One result of all these sudden new costs: per press reports, a group of retail CEOs informed the administration a week ago that Americans may start seeing “empty shelves” as early as mid-May. In more specific terms, as the prices of many foods, most clothing and shoes, back-to-school goods, and much else rise, a swathe of cheap and popular mid-range home goods — blenders and alarm clocks, umbrellas and strollers, sex toys and toasters — might vanish altogether.

Here’s why:

A 10% tariff means higher prices, but (as we noted in the case of toasters last summer) probably won’t much change production or trade patterns. The 145% tariff on Chinese goods, by contrast, will often act more like an embargo. A striking New York Times visualization last Sunday (subs. req.), built around the image of a house, suggests the likely impact by reporting the Chinese share of American imports for dozens of home goods: 10% or lower for rugs, mattresses, TVs, and cars; 20%-50% for metal shelves, refrigerators, washers and driers; 90% and above for thermos bottles, microwave ovens, and umbrellas; a 99% peak for alarm clocks and, well, toasters.

Official data on the real-world impacts of all these decrees — trade flows, prices, employment, growth — will flow in slowly over May and June. Some early clues, though, come from the “Port Optimizer” system run by the Port of Los Angeles, which offers near-future forecasts of container-ship arrivals. It predicts 17 ships carrying 83,351 containers* this week, 14 ships carrying 71,520 containers next week, and (a bit more optimistically) 18 carrying 89,917 containers the week after that. Compared to May of 2024, this suggests container arrivals have dropped by 30% to 35%. This would rival or possibly exceed the 32.6% year-on-year fall in February 2009 (after the 2008 financial crisis) and the 30.9% drop in March 2020 as the U.S. economy closed during the COVID-19 pandemic as the steepest decline of the 21st century.

The Port’s cargo figures also hint at where this drop is fastest. It handled $112 billion worth of incoming imports from China last year — a third of its $333 billion in total cargo traffic, and about a quarter of the $439 billion in all U.S. goods imports from China. With the 10% global tariff likely to raise prices and reduce but not end trade, and the 145% tariffs on most Chinese goods after the April 2 decree making many goods prohibitively expensive, the Port Optimizer’s vessel-arrival forecasts — which mirror press reports on plummeting April ship departures from China — likely show a steep plunge in arrivals of Chinese-made home goods.

What would this mean in practice? Overall, China’s share of U.S. goods imports last year was a large but not overwhelming 13%. (In dollars, $439 billion of $3.295 trillion.) As the Times visualization shows, though, China’s share imports is highest in consumer goods, and for some small home appliances exceeds 90%. A quick twelve-product table, with some products used in the Times piece (though using “quantity” rather than “value” shares) and others from our own files:

Product	Value	Quantity (total)	Quantity (China)	Chinese Share	Alternative sources
Alarm clocks	$50 million	11.49 million	11.43 million	99%	Taiwan
Battery-powered sex toys	$450 million	45.0 million	43.6 million	97%	Korea, Germany
Baby strollers	$392 million	5.68 million	5.45 million	96%	Vietnam
Microwave ovens	$1.40 billion	19.7 million	18.5 million	95%	Malaysia, Thailand
Hair dryers	$406 million	23.8 million	20.9 million	88%	Cambodia
Clarinets	$35 million	96,200	66,200	67%	Indonesia
Blenders & juicers	$744 million	45.0 million	38.4 million	85%	Mexico
Toothbrushes	$289 million	1.24 billion	755 million	61%	Germany, Vietnam
Hammers	$111 million	21.15 million	10.30 million	49%	Mexico
Ball-point pens	$481 million	2.75 billion	1.28 billion	47%	Japan, Mexico
Vacuum cleaners	$2.98 billion	63.6 million	22.2 million	35%	Vietnam
Razors	$482 million	1.47 billion	210 million	14%	Mexico, Greece

 

These are just the sort of “cheap goods” Mr. Bessent dismissed in March: kitchen gadgets, low-priced clocks, baby goods, personal care products and simple tools, musical instruments, and so forth. The razors, vacuum cleaners, hammers, and pens at the bottom of the table will likely cost more in the coming weeks and months but stay on the shelves. The clocks, sex toys, strollers, and microwaves near the top, though, might not be available at any price.

So: Nationwide, Americans will be deciding over the next months whether Bessent is right. More personally and locally, if you’re looking to restock your kitchen, bathroom, bedroom, workbench, home office, etc. with small but useful things this year, do it now.

* Technically 83,351 “TEU”.  The TEU, standing for “twenty-foot equivalent unit” is the standard measurement of container traffic. One TEU is one 20’ x 21’ x 8.5’ container, and a 40-foot container counts as two TEU.

FURTHER READING

PPI’s four principles for response to tariffs and economic isolationism:

• Defend the Constitution and oppose rule by decree;
• Connect tariff policy to growth, work, prices and family budgets, and living standards;
• Stand by America’s neighbors and allies;
• Offer a positive alternative.

Data:

The New York Times illustrates the Chinese place in American home goods.

The Port of Los Angeles’ container statistics, with monthly totals in TEUs since 1995 and annual totals since 1989.

… the Port Optimizer tracks week-by-week vessel and cargo arrivals.

… the Port’s “Facts and Figures” page.

And the U.S. International Trade Commission’s Dataweb.

From the administration: 

Bessent dismisses affordable goods in March.

… and last week, National Economic Council Director Kevin Hassett says no chance of empty shelves, everything is under control.

Public reaction so far:

Public opinion probably won’t set hard until Americans get a few months’ experience of the tariffs’ real-world effects. The interim judgment, though, is bleak.  Just as the Port Optimizer gives before-the-facts hints at actual cargo arrivals, data from seven major poll releases this past week — Pew, Fox News, Washington Post/ABC News, New York Times/Siena, CNN/SSRS, NPR/Marist, and Harvard’s Institute of Politics (of Americans under 30) — provides a snapshot of attitudes after the April 2 decree but before the real-life impact. We’ll look in more detail in a later Trade Fact, but the average across all six media polls has 60% of Americans “disapproving” of tariff increases while 36% “approve.” Among the individual polls, “disapproval” rates range from 55% to 65%, and “approval” from 33% to 40%.

And for HTS enthusiasts:

For Dataweb users, Harmonized Tariff Schedule codes for the 12 products in the table are:

82052000 for hammers;
821210 and 821220 for razors;
850811, 850819, and 850860 for vacuum cleaners;
8509400015 and 8509400030 for blenders and juicers;
851650 for microwave ovens;
851631 for hair dryers,
87150000 for strollers;
9019102020 and 9010102030 for battery-powered sex toys. We haven’t included non-battery options, not because of prudishness but because HTS does not give them their own lines, instead discreetly concealing them in general “other goods” lines in Chapters 39 and 40.
91051100 and 91051900 for alarm clocks;
9205904020 for clarinets;
96032100 for toothbrushes;
96082000 for ball-point pens.

ABOUT ED

Ed Gresser is Vice President and Director for Trade and Global Markets at PPI.

Ed returns to PPI after working for the think tank from 2001-2011. He most recently served as the Assistant U.S. Trade Representative for Trade Policy and Economics at the Office of the United States Trade Representative (USTR). In this position, he led USTR’s economic research unit from 2015-2021, and chaired the 21-agency Trade Policy Staff Committee.

Ed began his career on Capitol Hill before serving USTR as Policy Advisor to USTR Charlene Barshefsky from 1998 to 2001. He then led PPI’s Trade and Global Markets Project from 2001 to 2011. After PPI, he co-founded and directed the independent think tank ProgressiveEconomy until rejoining USTR in 2015. In 2013, the Washington International Trade Association presented him with its Lighthouse Award, awarded annually to an individual or group for significant contributions to trade policy.

Ed is the author of Freedom from Want: American Liberalism and the Global Economy (2007). He has published in a variety of journals and newspapers, and his research has been cited by leading academics and international organizations including the WTO, World Bank, and International Monetary Fund. He is a graduate of Stanford University and holds a Master’s Degree in International Affairs from Columbia Universities and a certificate from the Averell Harriman Institute for Advanced Study of the Soviet Union.

Read the full email and sign up for the Trade Fact of the Week.

FACT: Senate to vote next week on ‘terminating’ Trump tariffs.

THE NUMBERS:  IMF World Economic Outlook forecast changes from January 2025 to April 2025 –

World growth projection	-0.5% lower
U.S. growth projection	-0.9% lower
World inflation projection	0.4% higher
U.S. inflation projection	1.0% higher

WHAT THEY MEAN:

As the Senate prepares to vote next week on a resolution from Sens. Ron Wyden (D-Ore.) and Finance Committee Ranking Member) and Rand Paul (R-Ky.) terminating the Trump administration’s April 2 tariff decree, here’s a sad Friday bulletin from Pennsylvania’s Lehigh Valley News:

“Mack Trucks will lay off 250 to 350 workers at its Macungie-area facility, the company confirmed Friday. The job reductions will occur over the next three months in part because of market uncertainty and the impact of tariffs, the truck maker said in a prepared statement. ‘Heavy-duty truck orders continue to be negatively affected by market uncertainty about freight rates and demand, possible regulatory changes, and the impact of tariffs,’ company spokeswoman Kimberly Pupillo said.”

Pulling back for a broader view, the International Monetary Fund’s new World Economic Outlook — out yesterday morning — drops the Fund’s January optimism about a “growing and normalizing” global economy for a year of uncertainty, slowed growth, and rising inflation. Samples:

“In the United States, consumer, business, and investor sentiment was optimistic at the beginning of the year but has recently shifted to a notably more pessimistic stance as uncertainty has taken hold and new tariffs have been announced. In labor markets, hiring has slowed in many countries, and layoffs have risen. Meanwhile, progress on disinflation has mostly stalled, and inflation has edged upward in some cases.”
…
“[G]lobal growth is … lower than the projections in the January 2025 WEO Update, by 0.5 percentage points.  … U.S. growth is projected to decrease in 2025 to 1.8 percent, 1 percentage point lower than the rate for 2024 as well as 0.9 percentage points lower than the forecast rate in January. The downward revision is a result of greater policy uncertainty, trade tensions, and a softer demand outlook, given slower-than-anticipated consumption growth. Tariffs are also expected to weigh on growth in 2026.
…
“For advanced economies, the inflation forecast for 2025 has been revised upward by 0.4 percentage points since January, [and] the US forecast by 1.0 percentage point. For the United States, this reflects stubborn price dynamics in the services sector as well as a recent uptick in the growth of the price of core goods (excluding food and energy) and the supply shock from recent tariffs.”

Put concisely, on the IMF’s “macro” scale, Mr. Trump’s tariff decrees have cut $300 billion of U.S. growth this year, raised U.S. inflation by a point, and damaged financial markets. The contraction of Pennsylvania’s Mack Truck operation is a local and personal example of all this, and it’s far from rare. Some more scenes from the past week: Minnesota manufacturers canceling expansion plans; Tennessee Asian restaurants, North Carolina craft brewers and Arizona auto dealerships facing sudden price spikes and loss of customers; Indiana landscapers seeing “fear in the market” and orders put on hold; Texas’ natural gas exporters grappling simultaneously with falling gas prices, higher port construction costs, and potential retaliations; and (seen through the eyes of Merced Rep. Adam Gray) California’s Central Valley farmers worrying about looming foreign retaliations against their $24 billion in exports of almonds, wine, vegetables, and other crops.

What might be done? Congress, not presidents, has Constitutional power over tariff rates and can stop the bleeding whenever it chooses. An inflection point will come next week as Sens. Wyden and Paul, having successfully gotten the Senate to pass one resolution in March to terminate the February Canada/Mexico/China “emergency” decree, now propose a second. This Joint Resolution would void the full April 2 decree, including its worldwide 10% tariff, its 125% tariff on Chinese-made goods, and its (temporarily suspended but not canceled) “reciprocal” tariffs of up to 50% on 57 countries. Their concise 72-word bill reads as follows:

“Joint Resolution terminating the national emergency declared to impose global tariffs.

Resolved by the Senate and House of Representatives of the United States of America in Congress assembled, 

“That pursuant to section 202 of the National Emergencies Act (50 U.S.C. 1622), the national emergency declared on April 2, 2025, by the President in Executive Order 14257 (90 Fed. Reg. 15041) is terminated effective on the date of the enactment of this joint resolution.”

Senate passage of course is only one step. In their offices on the Capitol Building’s south end, Republican House leaders have spent the spring devising exotic procedural devices to avoid a vote on tariffs.  It’s worked so far, but their passivity, is not consensus. Trade Subcommittee Ranking Member Rep. Linda Sanchez (D-Calif.) leads all 19 House Democrats on the Ways and Means Committee (the one responsible for tariff policy) in a Resolution to void both February’s Canada/Mexico/China decree and the April 2 decree. And Constitution-friendly Republican Rep. Don Bacon from Nebraska offers another to require Congressional approval for any future “emergency” or “national security” tariffs.

Looking ahead to next week’s first step, a lot of harm is already done. And whether in the IMF’s “global economy” view, or the Lehigh Valley News’ “neighborhoods and communities” perspective, it is metastasizing daily. The sooner Congress reclaims its authority and restores Constitutionally legitimate policymaking, the less the harm will spread, and the more quickly the U.S. and the world alike will heal.

FURTHER READING

PPI’s four principles for response to tariffs and economic isolationism:

• Defend the Constitution and oppose rule by decree;
• Connect tariff policy to growth, work, prices and family budgets, and living standards;
• Stand by America’s neighbors and allies;
• Offer a positive alternative.

The Constitution and its friends: 

U.S. Constitution text, from the National Archives. See Article I, Section 8, first clause, for “Taxes, Duties, Imposts, and Excises.”

Sens. Ron Wyden (D-Ore.) and Rand Paul (R-Ky.) propose terminating the April 2 “emergency” declaration.

Rep. Linda Sanchez (D-Calif.) and House Ways and Means Democrats propose terminating both the April 2 global and February 1 Canada/Mexico/China “emergency” decrees, and require any future “emergency” and “national security” tariffs to get Congressional approval.

And Rep. Don Bacon (R-NE) with Foreign Relations Ranking Member Greg Meeks (D-N.Y.), Jeff Hurd (R-Colo.), and Josh Gottheimer (D-N.J.) with a look-ahead bill to require a Congressional vote on any future tariff imposition.

Real-world perspectives: 

The Lehigh Valley News on layoffs at Mack Truck.

… and State Rep. Josh Siegel appeals for Congressional delegation help.

Rep. Adam Gray (D-Calif.) on tariffs, retaliations, and the dent they’re putting in Central Valley farm exports and rural income.

Tennessee’s Asian restaurants and North Carolina’s craft brewers grapple with price shocks and lost business.

Arizona auto dealers and Indiana landscapers ponder falling sales, while Texas’ LNG exporters watch prices drop while infrastructure costs rise.

And economic analysis:

A gloomy look around the world from IMF Managing Director Kristalina Georgieva.

And former Treasury Secretary Larry Summers (video, via the Peterson Institute for International Economics), explains the fallacies of Trump administration tariffs and their likely effects at home.

For more detail, the IMF’s April World Economic Outlook has growth, inflation, and other projections, and analysis of tariff shocks, business uncertainty, and their likely impacts.

… and as a comparison, its happier late-January Outlook update, with our justifiably apprehensive comment at the time.

ABOUT ED

Ed Gresser is Vice President and Director for Trade and Global Markets at PPI.

Ed returns to PPI after working for the think tank from 2001-2011. He most recently served as the Assistant U.S. Trade Representative for Trade Policy and Economics at the Office of the United States Trade Representative (USTR). In this position, he led USTR’s economic research unit from 2015-2021, and chaired the 21-agency Trade Policy Staff Committee.

Ed began his career on Capitol Hill before serving USTR as Policy Advisor to USTR Charlene Barshefsky from 1998 to 2001. He then led PPI’s Trade and Global Markets Project from 2001 to 2011. After PPI, he co-founded and directed the independent think tank ProgressiveEconomy until rejoining USTR in 2015. In 2013, the Washington International Trade Association presented him with its Lighthouse Award, awarded annually to an individual or group for significant contributions to trade policy.

Ed is the author of Freedom from Want: American Liberalism and the Global Economy (2007). He has published in a variety of journals and newspapers, and his research has been cited by leading academics and international organizations including the WTO, World Bank, and International Monetary Fund. He is a graduate of Stanford University and holds a Master’s Degree in International Affairs from Columbia Universities and a certificate from the Averell Harriman Institute for Advanced Study of the Soviet Union.

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FACT: Five-eighths of U.S. imports are “business inputs,” three-eighths “consumer goods.”

THE NUMBERS:  Imports of U.S. goods by type, 2024 –

U.S. GDP. 2024	$29.185 trillion
All goods imports:	$3.270 trillion
Consumer goods:	$1.225 trillion
“Capital goods”:	$1.113 trillion
“Intermediate” goods:	$0.534 trillion
“Raw materials”:	$0.327 trillion

WHAT THEY MEAN:

Reviewing the likely effects of this month’s Trump administration tariffs on the U.S. space industry this week, PPI space expert Mary Guenther has a blunt warning:

“The ever-evolving tariff regime … will raise the cost of making rockets and satellites in the U.S., limit industry access to core inputs and materials, and encourage boycotts of American products and services abroad.” 

Some background, then we can place her judgment against the administration’s view that tariffs mean ‘more manufacturing industry’:

The Trump administration’s “reciprocal” tariff system launched at midnight last Wednesday. Greeted icily by the stock and bond markets the next morning, it lasted about 5½ hours before “pausing” just after lunch. It and may or may not resurface in July. The April 2 decree which created it, though, imposed not one but two new tariff systems. The second is still in place, though with big holes punched into it with a sudden Friday-night exemption for semiconductors, smartphones, TVs, and some other IT manufacturers. (This is roughly 22% of U.S. imports from China, and 10% of all imports, and may last or itself be replaced by a “national security” tariff in a month.) Assuming the administration sticks with v.3 for a while, or returns to v.2, here are the basics:

1.  Contents: The April 2 decree imposes
(a) a 10% tariff on all goods imports from countries other than China, Canada, and Mexico, except energy and (provisionally) the IT manufactures noted above;
(b) a 125% tariff on everything Chinese-made other than the IT goods (which, since the February Canada/Mexico/China decree remains in effect, makes a total rate of 145%, except the IT goods at 20%), and
(c) an exemption for Mexican- and Canadian-made goods entering under the still-surviving “USMCA.” Separate March decrees put 25% tariffs on cars, auto parts, steel, and aluminum, and the administration has threatened though not yet imposed similar 25% tariffs on medicine, lumber, copper, and semiconductor chips.
As a final note (d), the Congressionally authorized, Constitutionally legitimate tariff system is still in place and averages about 1.5%.

Tentatively assuming that the 145% tariff on Chinese goods means near but not total collapse of trade, while imports continue from the rest of the world, the likely overall U.S. average rate would then likely range from 15% to 20%.  In U.S. history, these rates resemble those of the Hoover administration from 1930-32.  Or, looking around the world today rather than backward through American history, the U.S.’ “peer” tariff economies would be countries such as Iran, Venezuela, Congo, and Chad in the 12% to 20% tariff range. (See below for a couple of tables.)

2. Impacts: What sort of impact would this tariff system have? In a “macro” sense, Yale BudgetLab estimates GDP growth cut by -1.1%, and prices up by 2.9%. More immediately, families buying clothes, groceries, appliances, flowers, and cars can expect prices to rise. (This won’t surprise them: the most recent UMichigan consumer-confidence survey reveals the highest inflation expectations since 1981.) But as Ms. Guenther implies and the numbers above show, imports of business inputs – “intermediate goods” like chemicals and metals, raw materials like energy and metal ores, and capital goods such as power equipment — are substantially larger than imports of consumer goods. So the Trump tariffs are likely to raise U.S. production costs even more than they raise mall and grocery prices.

This is why the administration’s view of tariffs that tariffs, in some way, make manufacturing companies larger seems so blinkered and naive. Taking automobiles as an example, the administration’s 25% tariff on cars would raise prices and push Americans to buy locally made cars. But its identical 25% tariffs on metals and parts (and depending on which administration official is speaking, on semiconductors too), plus its 10% tariffs on wiring, paint, glass, and so on, and its 125% tariff on any auto-related things made in China, will also make it much more expensive to build cars in the United States. So the likely outcome is that Americans will import fewer cars, and also buy fewer U.S.-made cars, while U.S.-made cars get more expensive abroad and also risk retaliation. That points to a smaller U.S. auto sector. The same goes for refrigerators, motorcycles, washing machines, planes, and the space industry’s rockets, satellites, guidance systems, specialized sensors and computers, and so on.

With this in mind, some specially protected “manufacturing sectors” might gain. But U.S. manufacturing in general will have higher costs and probably get relatively smaller. The earlier round of Trump tariffs provides some guidance here: per a 2023 U.S. International Trade Commission study, the 2018 steel and aluminum tariffs over three years raised the two metals’ output by $2.2 billion, but simultaneously shrank the U.S. auto parts, machinery, toolmaking and other metal-using industries by $3.5 billion. On a larger scale, since the metals and “301” tariffs on Chinese goods in 2018/2019, manufacturing has fallen from 10.9% to 9.9% of U.S. GDP.  Real manufacturing output growth and employment totals, meanwhile, have slowed from the annual $40 billion and 100,000 net jobs averages of the post-financial crisis Obama years to $30 billion and 30,000.

So: Good that the administration listened to the financial markets’ frank advice last week and, at least for now, abandoned its “reciprocal tariff” plan. They should keep listening — to markets worrying about macro impacts, to Guenther and other industry experts describing likely impacts on firms and industries, and to public opinion contemplating price shocks. All of them, in their different ways, are saying very similar things.

FURTHER READING

PPI’s four principles for response to tariffs and economic isolationism:

• Defend the Constitution and oppose rule by decree;
• Connect tariff policy to growth, work, prices and family budgets, and living standards;
• Stand by America’s neighbors and allies;
• Offer a positive alternative.

Along these lines, applause for two new bills, introduced last week, to safeguard the U.S. economy and defend the Constitution:

House Ways and Means Democrats call for canceling the April 2 decree and the February decree relating to Canada and Mexico, and for requiring Congressional votes of approval for any new “emergency” or  “national security” tariffs.

Finance Committee Ranking Member Sen. Ron Wyden (R-Ore.) and Rand Paul (R-Ky.), likewise.

Current tariff rates:

The actual U.S. tariff schedule. It is not a very good system, but is Congressionally authorized and Constitutionally legitimate.

… the Trump administration’s April 2 tariff decree.

… the April 9 version.

… and the April 11 “Clarification of Revisions, as Amended.”

Backwards through history:

The U.S. International Trade Commission has U.S. tariff rates (trade-weighted) from 2024 back to 1891.

Around the world: 

The WTO’s Tariff Profiles 2024 makes it easy to look up and compare tariff rates (simple average, trade-weighted average, by sector, etc.).

… and the World Bank has an even easier interactive comparative table (though with “trade-weighted” tariff rates only) by country from the World Bank.

And a couple of tables:

1.  An educated guess at this week’s U.S. tariff rate, placed against tariff rates abroad and in U.S. history:

United States (Trump v.1 “reciprocal,” April 2, 2025)	30.0%??
Bermuda	29.5%
United States (Hoover administration, 1932)	19.8%
United States (Trump v.2, April 9, 2025)	18.0%??
Chad	16.8%
Republic of Congo	15.2%
United States (Trump v.3, April 12, 2025)	15.0%??
Venezuela	12.8%
Ethiopia	12.7%
Iran	12.1%
Zimbabwe	11.4%
Egypt	10.4%

 

European Union	2.7%
U.S. (2024)	2.4%
China	2.2%
Japan	1.9%
U.S. (2016)	1.5%
Singapore	0.0%

* WTO Tariff Profiles 2024 when available; World Bank database for Egypt, Iran, Venezuela, Ethiopia, Zimbabwe, and Chad. Bermuda’s average tariff rate is the highest known current rate.

  2.  And an attempted breakdown of imports by current tariff type (though policy has been changing unpredictably).  Using last year’s $3.27 trillion in imports as a base, and assuming the semiconductor, smart-phone, TV, etc., exemption stays on:

Chinese-made: 145% on $345 billion.

“National security” (232): 25% on about $500 billion in cars, auto parts, steel & aluminum, likely also medicines, copper, and lumber.

China partial exemptions: 20% (for now) on $96 billion in Chinese-made semiconductors, TVs, smartphones, semiconductor manufacturing equipment, and solar technology.

April 2 decree “worldwide”: 10% on about $1.2 trillion in Asian but non-Chinese, European, Latin American and Caribbean, Middle East, African, and Pacific goods.

0%: About $820 billion in “USMCA” goods, plus all energy, plus $200 billion worth of exempted and non-Chinese-made semiconductors and other IT goods.

ABOUT ED

Ed Gresser is Vice President and Director for Trade and Global Markets at PPI.

Ed returns to PPI after working for the think tank from 2001-2011. He most recently served as the Assistant U.S. Trade Representative for Trade Policy and Economics at the Office of the United States Trade Representative (USTR). In this position, he led USTR’s economic research unit from 2015-2021, and chaired the 21-agency Trade Policy Staff Committee.

Ed began his career on Capitol Hill before serving USTR as Policy Advisor to USTR Charlene Barshefsky from 1998 to 2001. He then led PPI’s Trade and Global Markets Project from 2001 to 2011. After PPI, he co-founded and directed the independent think tank ProgressiveEconomy until rejoining USTR in 2015. In 2013, the Washington International Trade Association presented him with its Lighthouse Award, awarded annually to an individual or group for significant contributions to trade policy.

Ed is the author of Freedom from Want: American Liberalism and the Global Economy (2007). He has published in a variety of journals and newspapers, and his research has been cited by leading academics and international organizations including the WTO, World Bank, and International Monetary Fund. He is a graduate of Stanford University and holds a Master’s Degree in International Affairs from Columbia Universities and a certificate from the Averell Harriman Institute for Advanced Study of the Soviet Union.

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FACT: Trump tariffs have nothing at all to do with ‘reciprocity.’

THE NUMBERS:  

Trump tariff on anything from Lesotho:	50.0%
Current U.S. tariff on Lesotho goods:	0.0%

WHAT THEY MEAN:

A small landlocked country of 2.2 million in southern Africa, Lesotho’s modest shipments of clothing – $230 million worth last year — accounts for 0.007% of American imports. The Trump administration has singled this out for a 50% tariff, the highest rate anywhere in the world. Should it stay on, the tariff will likely cripple Lesotho’s economy and immiserate the 12,900 young women at work stitching shirts and blue jeans around Maseru this afternoon. Much the same will happen in Cambodia, Madagascar, Pakistan, Bangladesh, Vanuatu, Sri Lanka, and dozens of other low-income countries.

How did this happen?  Background, and a look at the likely effects.

Having spent the last three months claiming that Americans are victims, immiserated, plundered, etc., by “unfair” trade barriers in foreign countries and arguing for “reciprocal” tariffs, the Trump administration seems to have decided in March that calculating “reciprocity” was too hard. The tariffs Mr. Trump imposed by decree last Wednesday – in effect as of this morning – have nothing at all to do with foreign tariffs on American goods.  Instead, the administration did two quite different things:

(1)  Gave every country in the world a 10% tariff. (For those interested in reciprocity, a flawed but not wholly useless concept, the average world tariff is probably a bit above 3%.) This appears to be added to, rather than replacing, the existing 2.4% average. Based on records kept by the U.S. International Trade Commission, the resulting ~12.4% tariff rate would be the U.S.’ highest since the Depression of the 1930s.

(2)  Created a second set of tariff rates for 57 countries (counting the 27-member European Union as a single economy) with which the U.S. ran a “goods trade deficit’” in 2024. I.e., Americans bought more from the relevant place than we sold to people there. (Russia, a -$2.5 billion deficit country last year, gets an exemption.) As practical examples, this means surtaxes of 20% on Dutch cheese and semiconductor manufacturing equipment, 26% on Korean cars and computers, 48% on Cambodian shirts, 28% on Tunisian dates and jewelry, and so on.

Where do these numbers come from? The administration appears to have gotten them not by looking up tariff rates abroad – though they’re easy to find – but from a four-column spreadsheet based on an arithmetical formula. One column has the dollar value of American exports (excluding services trade, so Hollywood film revenue, telemedicine, foreign-student tuition, tech-sector search and data analytics, financial services, architecture and engineering contracts, etc., count as nothing). The second column has the value of goods-only trade deficits, or “exports minus imports.” The third column calculates a “trade balance to imports” ratio, and the fourth divides this ratio by two to get a supposed ‘reciprocal’ tariff.

Here’s a real-world case: The Falkland Islands – a British South Atlantic territory home to 3,162 people – gets hit with a 42% tariff. They sold Americans $22.8 million worth of toothfish and squid last year (fisheries are 40% of the Falklands economy) while buying $4.1 million worth of American airplane parts, ceiling fans, and computer accessories. The administration gets its 42% ‘reciprocal tariff’ on Falklands goods from the following formula:

{(fish – airplane parts)/fish}/2.

Spelling it out, fish minus airplane parts equals $18.7 million.  Divided by fish ($22.8 million), this yields a ratio of “0.84.” Division of this by two then produces the 42% “reciprocal” tariff. Obviously this has nothing to do with Falkland Islands tariffs, nor America’s either. Neither does it get more logical results anywhere else. Some examples, placing the Trump tariff against the actual trade-weighted average tariff rates published in the WTO’s World Tariff Profiles 2024:

Trump tariff on Bosnian goods:	36.0%
Bosnian average trade-weighted tariff:	6.2%
Trump tariff on Brazilian goods:	10.0%
Brazil average trade-weighted tariff:	6.7%
Trump tariff on Jordanian goods:	20.0%
Jordan tariff on U.S. goods (FTA partner)	0.0%
Trump tariff on Madagascar goods:	47.0%
Madagascar average trade-weighted tariff:	8.7%
Trump tariff on UK goods	10.0%
UK average trade-weighted tariffs:	2.3%
Trump tariff on Vietnamese goods:	46.0%
Vietnamese average trade-weighted tariff:	4.5%

 

This sort of fecklessness has drawn appropriate derision from economists. It is also, though, bringing real-world results varying from absurd through disastrous to genuinely tragic. The Falklands’ case is in the “absurd” category – they sell most of their squid and toothfish to Europe anyway – and Falklanders can ridicule it, get angry, or sadly shake their heads depending on temperament. The “disastrous” effects are piling up daily in financial markets and industry sites – about 5% of American wealth already vanished in the last week, likely future layoffs and price spikes, etc.

Others can’t laugh it off. Twelve of the 57 countries on the administration’s list are “least-developed” states: Angola, Bangladesh, Cambodia, Chad, DR Congo, Laos, Lesotho, Madagascar, Malawi, Mozambique, Myanmar, Zambia, Zimbabwe – as well as many more lower-middle income (e.g. Pakistan and Sri Lanka), small southern-Europe democracies under Russian pressure such as Moldova and Bosnia, Arab-world allies like Tunisia and Jordan, Asia-Pacific Treaty allies Philippines and Thailand, small island states Vanuatu and Fiji, and more.

U.S. trade with the least-developed countries in particular, though small in the $7 trillion world of American trade flows, is often an essential source of wage employment, macroeconomic stability, and poverty alleviation. Lesotho’s case is illustrative of the harms they will suffer, but also extraordinary for the scale of the tariff and its likely human impact.

Over the past generation, the country’s 33 garment companies have been especially successful users of the African Growth and Opportunity Act’s tariff waivers, and as a result, are Lesotho’s largest source of wage-paying jobs. Southern Africa, being the region hit hardest by the HIV/AIDS pandemic, Lesotho also has the world’s second-highest adult HIV-positive rate at 19.3% of adults. The garment factories joined the American PEPFAR program – USAID had a $47 million health commitment to Lesotho – as important providers of HIV treatment and education.

Their $230 million worth of clothes account for about 0.2% of American clothing imports. That’s about a day’s worth of U.S. clothes shopping a year, and makes up the “0.007%” of total imports noted above. They also create a ‘bilateral trade deficit’ a bit above $200 million. Since Lesotho doesn’t buy very much, and most American products there arrive via South Africa, the ‘ratio’ formula has pushed Lesotho to the very top of its list. The resulting 50% tariff, an artifact of the Trump calculators’ indifference and laziness, may destroy the industry and its workers’ livelihoods by summer. Considering that this economic blow comes simultaneously with the destruction of USAID and “pause” in PEPFAR’s Lesotho work, the word ‘tragic’ is strong but probably not strong enough.

** Very recent update, 1:45 p.m.: these now seem to be ‘paused’ for 90 days after a financial-market and public-opinion hurricane of opposition. We’ll see; if this is so and the ‘reciprocal’ tariffs stay off, at least for now the ‘10%’ global rate seems to remain.

FURTHER READING

PPI’s four principles for response to tariffs and economic isolationism:

• Defend the Constitution and oppose rule by decree;
• Connect tariff policy to growth, work, prices and family budgets, and living standards;
• Stand by America’s neighbors and allies;
• Offer a positive alternative.

Comparing tariff rates:

Trump administration’s decree imposing tariffs; see “Annex I” for list of countries.

And for those genuinely interested in “reciprocity,” the WTO’s Tariff Profiles 2024 makes it easy to look up and compare rates.

And reports on the impacts abroad:

The Lesotho Embassy.

… responses from government, academia, and business from Maseru-based Lesotho Reporter.

… and from the Guardian, on-site reaction from Lesotho workers and government.

… and the U.S. Trade Representative Office’s African Growth and Opportunity Act (AGOA) page.

Via the BBC, a view from the Falklands.

… and the Falkland Islands Fishing Companies Association.

And Nikkei talks with Phnom Penh garment workers.

ABOUT ED

Ed Gresser is Vice President and Director for Trade and Global Markets at PPI.

Ed returns to PPI after working for the think tank from 2001-2011. He most recently served as the Assistant U.S. Trade Representative for Trade Policy and Economics at the Office of the United States Trade Representative (USTR). In this position, he led USTR’s economic research unit from 2015-2021, and chaired the 21-agency Trade Policy Staff Committee.

Ed began his career on Capitol Hill before serving USTR as Policy Advisor to USTR Charlene Barshefsky from 1998 to 2001. He then led PPI’s Trade and Global Markets Project from 2001 to 2011. After PPI, he co-founded and directed the independent think tank ProgressiveEconomy until rejoining USTR in 2015. In 2013, the Washington International Trade Association presented him with its Lighthouse Award, awarded annually to an individual or group for significant contributions to trade policy.

Ed is the author of Freedom from Want: American Liberalism and the Global Economy (2007). He has published in a variety of journals and newspapers, and his research has been cited by leading academics and international organizations including the WTO, World Bank, and International Monetary Fund. He is a graduate of Stanford University and holds a Master’s Degree in International Affairs from Columbia Universities and a certificate from the Averell Harriman Institute for Advanced Study of the Soviet Union.

Read the full email and sign up for the Trade Fact of the Week.

FACT: U.S. Constitution: “Congress shall have power to lay and collect Taxes, Duties, Imposts, and Excises.”

THE NUMBERS: Consumer confidence “Expectations Index”* – 

March 2025:	65.2
February 2025:	72.9
(Recession level)	(80.0)
December 2024:	81.1
October 2024:	89.1

* Conference Board, March 25, 2025

WHAT THEY MEAN:

Is Mr. Trump’s tariff binge — now delayed until 4:00 today, presumably to avoid split-screen footage placing tariff announcements against crashing financial markets, but said to include extensive new taxation of cars, semiconductors, OTC and prescription medicines, Canadian energy, Chinese toys, Mexican fruits and vegetables, etc. — really “the largest peacetime tax increase in history.” The White House’s claim of a $600 billion increase in annual tariff collection would be about 2.2% of GDP. That would make it at least a contender for the title, though it might wind up below the introduction of the Social Security and Medicare taxes in the 1930s and 1960s.

But if the scale remains a little blurry, the public’s view seems by comparison sharp and clear: higher prices and fear for the future. The Conference Board’s survey of American “consumer confidence” (March 25, done after tariffs on Canada/Mexico/China but before last week’s on cars) suggests opinion has gone far enough south to reach the “Tierra del Fuego” latitudes, where phrases like “nose-dive” and “free fall” turn up. Here’s their ashen-faced release a week ago Tuesday:

“The Expectations Index – based on consumers’ short-term outlook for income, business, and labor conditions – dropped 9.6 points to 65.2, the lowest level in 12 years [ed. note: lowest since the end of the post-2008 financial crisis] and well below the threshold of 80 that usually signals a recession ahead.  … Optimism about future income – which had held up quite strongly over the past few months – largely vanished, suggesting worries about the economy and the labor market have started to spread into consumers’ assessment of their personal situations. … [R]esponses also showed that inflation is still a major concern for consumers and that worries about the impact of trade policies and tariffs in particular are on the rise.”

Should the public be that worried? Recent experience offers little guidance, since no administration since Herbert Hoover’s in 1930 has tried something like this. Warning lights are flashing red in GDP outlook, financial markets and manufacturing  (“bearish market sentiment and tariff applications and costs have dominated discussions”) as well as in consumer confidence.  And some real-world leading indicators — say, layoffs in steel factories specialized in automotive metal — are turning down. But apart from the layoffs, these are still mostly “signs and portents.” Spring will bring more reliable stats on macro employment/price/growth impacts; effects on goods-buying industries such as factories, farms, restaurants, retail, and building contractors; and the fortunes of the American export manufacturing and farming, services and digital, and IP sectors now suddenly targets for retaliation.

But whatever the economic gashes and wounds, the most important long-term harm will likely be elsewhere. After all, governments often make policy errors, sometimes they’re pretty big, and countries usually recover in time. (Though recuperation from Hoover’s required a lot of time). Damage to governance goes deeper. And here, Mr. Trump’s approach — bad-faith “emergency” and “national security” declarations, coupled with Executive Orders attempting to create tariffs by decree — carries the risk of infection to the political system separate from its economic consequences.

The Constitution gives Congress, not presidents, authority to “lay and collect Taxes, Duties, Imposts, and Excises,” as well as “regulation of Commerce with foreign nations.” For good reason: giving any single individual power to set tax rates means not only heightened danger of impulsive and unsound decisions, but temptation to use that novel power in corrupt ways — to reward family members, cronies, and supporters, and/or to harm political critics, business rivals, and opposition strongholds.

Earlier presidents never questioned this principle. The sepia-tinged pre-New Deal pols who wanted tariff hikes (e.g., Hoover, Warren G. Harding, William McKinley, Benjamin Harrison) asked Congress to pass bills and sign the result. Historians debate the economic merits, but their tariff increases had a Constitutional legitimacy Mr. Trump’s program wholly lacks. Should his program stick, it will weaken the separation of powers, usurp authority over taxation, and substitute one-man “rule by decree” for authentic (if sometimes ill-judged) law. Next to this, costs to growth, jobs, and living standards are more immediately painful but likely lesser issues.

Where to next? Court cases this year may limit Mr. Trump’s options, but there’s a simpler and better solution: Congress has the power it needs to defend its authority, and should use it. House Speaker Mike Johnson and Ways and Means Committee Chairman Jason Smith, and their Senate counterparts Majority Leader John Thune as Majority Leader and Finance Committee Chair Mike Crapo, need only — per their oath of office to “protect and defend the Constitution” — call a vote. If Congress likes Mr. Trump’s tariffs, it can impose them in the proper way. If not, it should say “no” and end them.

FURTHER READING

PPI’s four principles for response to tariffs and economic isolationism:

• Defend the Constitution and oppose rule by decree;

• Connect tariff policy to growth, work, prices and family budgets, and living standards;

• Stand by America’s neighbors and allies;

• Offer a positive alternative.

The Constitution and its friends:  

Official U.S. Constitution text, from the National Archives. See Article I, Section 8, first clause, for “Taxes, Duties, Imposts, and Excises.”

PPI’s look last fall at the Constitutional Convention of 1787, the tax power, and the harm inherent in rule by decree.

• Sen. Tim Kaine (D-Va.), with Sens. Klobuchar, Coons, and Paul (respectively Ds-Minn. and Del., R-Ky.), have a resolution this week to repeal the March “emergency” declaration used as a pretext for tariffs on Canadian goods.
• Reps. Don Beyer (D-Va.) and Suzanne DelBene (D-Wash.) on ensuring that any tariff imposed on “emergency” or “national security” grounds must get Congressional approval.
• Rep. Brad Schneider (D-Ill.) on scrapping a surviving Hoover legacy, “Section 338.”
• Rep. Jimmy Panetta (D-Calif.) on ensuring Congressional approval for balance-of-payments tariffs.

On the other side: 

Two hours before today’s White House tariff decrees are supposed to be released, neither their texts nor their content are yet public. For interim reading in their absence, try the President’s Trade Agenda report, put out by the Office of the U.S. Trade Representative on March 3. Each year this is supposed to lay out the year’s main goals and activities. This year’s edition has a lot of puzzling gaps. The report does converge at some points with the options floated in the press this past week. But it doesn’t mention taxation of cars and medicine, trade wars with Canada and Mexico, or any large overall tariff.

Leading indicators:

Conference Board finds Americans fearful, expecting a recession, and thinking a lot about tariffs.

… the University of Michigan’s consumer-confidence survey finds the same thing. Sample:

“The expectations index plunged a precipitous 18% and has now lost more than 30% since November 2024. This month’s decline reflects a clear consensus across all demographic and political affiliations; Republicans joined independents and Democrats in expressing worsening expectations since February for their personal finances, business conditions, unemployment, and inflation. Consumers continue to worry about the potential for pain amid ongoing economic policy developments. Notably, two-thirds of consumers expect unemployment to rise in the year ahead, the highest reading since 2009.”

And about that “$6 trillion”: 

Concise judgment from Ben Ritz and Alex Kilander this February: Trump administration tariffs are “bad tax policy that don’t raise much revenue but do raise costs for businesses and households.”

And Laura Duffy’s It’s Not 1789 Anymore: Why Trump’s Backwards Tariff Agenda Would Harm America (October 2024) on the First Congress and the deep flaws of tariffs as a form of taxation: can’t raise enough revenue to support a modern government; non-transparent to the public and thus unusually easy for well-connected interest groups to manipulate; inequitable as business taxation and regressive as consumer taxation; large harms to “downstream” industries and their workers.

ABOUT ED

Ed Gresser is Vice President and Director for Trade and Global Markets at PPI.

Ed returns to PPI after working for the think tank from 2001-2011. He most recently served as the Assistant U.S. Trade Representative for Trade Policy and Economics at the Office of the United States Trade Representative (USTR). In this position, he led USTR’s economic research unit from 2015-2021, and chaired the 21-agency Trade Policy Staff Committee.

Ed began his career on Capitol Hill before serving USTR as Policy Advisor to USTR Charlene Barshefsky from 1998 to 2001. He then led PPI’s Trade and Global Markets Project from 2001 to 2011. After PPI, he co-founded and directed the independent think tank ProgressiveEconomy until rejoining USTR in 2015. In 2013, the Washington International Trade Association presented him with its Lighthouse Award, awarded annually to an individual or group for significant contributions to trade policy.

Ed is the author of Freedom from Want: American Liberalism and the Global Economy (2007). He has published in a variety of journals and newspapers, and his research has been cited by leading academics and international organizations including the WTO, World Bank, and International Monetary Fund. He is a graduate of Stanford University and holds a Master’s Degree in International Affairs from Columbia Universities and a certificate from the Averell Harriman Institute for Advanced Study of the Soviet Union.

Read the full email and sign up for the Trade Fact of the Week.

FACT: The Trump administration is trying to find foreign eggs to lower prices, then immediately tax them to raise prices.

THE NUMBERS: Egg prices,* per dozen large Grade A –

February 2025:	$5.90
December 2024:	$4.15
February 2024:	$3.00

* National averages, via. St. Louis Federal Reserve’s “FRED” Economic Data system.

WHAT THEY MEAN:

Quick followup to our look at public opinion on tariffs last week: A poll released by Fox News (on Friday, two days after our piece) matched the four-fathoms-underwater responses to CNN/SSRS and Reuters/IPSOS: 28% thought tariffs would be good for the economy and 53% bad. More generally, this poll finds “inflation, prices, and the cost of living” the top public concern, cited by 27% of all respondents. “Economy and jobs” is next at 16%. And those thinking of inflation this year often envision an egg.

Eggs are one of those common products, like gasoline or fresh vegetables, where very visible price hikes make people sensitive. Among the apparently sensitized is the Secretary of Agriculture, Brooke Rollins, who is cajoling South Korea and Turkey this month to sell us more eggs. Here’s a passage from Hoosier Ag Today:

“[Rollins] says USDA is also working to temporarily increase the import of eggs in order to increase the supply available for consumers. “Turkey and South Korea have both confirmed they will be increasing breaker egg imports into the U.S. …USDA continues conversations—in fact, I was on one earlier today regarding another country who’s ready to import a significant amount of eggs in the short term, but we continue to work that issue very, very aggressively—again, just for the short term, to keep getting the price of eggs down.”

Two points on this:

1. “Autarkic” economies often suffer shortages and price shocks: Economies with tight import limits, whether whole countries or individual ‘sectors’, suffer price shocks and shortages more frequently than “open” economies with more diversified sources of supply. As the U.S. infant formula crisis was the 2022/23 example, eggs are this year’s, with prices doubling since the outbreak of avian flu last spring.

The lost output is hard to replace because only a few countries can sell eggs to Americans. Policy is jointly and fiercely patrolled by USDA’s Animal and Plant Health Inspection Service, the Food and Drug Administration, and the Agricultural Marketing Service, for “high path avian influenza” and “virulent newcastle.” The three agencies, for understandable reasons, require countries hoping to sell eggs to American grocery stores to have food-safety systems comparable to that of the United States, and the individual poultry operations hatching them out to pass FDA inspection.

In principle this is correct — health and safety first; set policy through science and medicine rather than through responses to fears or price concerns. And in contrast to infant formula, where strict quotas and high tariffs make it very hard for American groceries to buy, eggs don’t have especially high import barriers. (Egg tariffs, HTS 04072100, are now 2.8 cents per dozen, or a quarter of a cent per egg.) But in practice, the regulatory gauntlet is so costly and difficult that egg trade is very small. USDA’s “Global Agricultural Trade System” database reports only two countries — Canada and Turkey — selling us any significant quantity, and even they don’t do much. (Canada shipped about 2.7 million dozen fresh eggs last year, Turkey 5.7 million dozen, and the rest of the world a few thousand dozen more.) The U.S. egg industry, by comparison, shipped about 53,000 million dozen to groceries each year, which puts imports below 1% of egg sales.

In such circumstances, as with infant formula three years ago, domestic problems bring swift consequences and they tend to last.  When last fall’s avian flu outbreak slashed U.S. production, shortages and price spikes followed immediately. So a dozen eggs now cost twice what they did last spring. Ms. Rollin’s Easter weekend egg hunt, like the Defense Department’s infant formula airlift two years ago, illustrates the effect of tough import limits even when the rationale for them is understandable.

2.  The Trump administration is trying to simultaneously lower and raise egg prices: Meanwhile, the rest of the administration is trying to make eggs cost more. As Ms. Rollins looks for ways to bring egg prices down, Mr. Trump has spent the past month hyping a plan to personally impose tariffs of 10%, 25%, or some yet-to-be-decided random level, on eggs and other products from Canada, the European Union, Mexico, China, and maybe every other country in the world.

Supposedly these tariffs, on chicken eggs and the other 11,413 additional “tariff lines,” will hit next week. Courts may well declare this plan unconstitutional: Congress, not presidents, has the power to set rates for “Taxes, Duties, Imposts, and Excises.” But if courts allow it on the basis of vaguely written statutes and precedent from case law, the new tariffs will put a heavy tax on all the eggs Ms. Rollins can find, and cancel much, or all, or “more than all” of whatever egg price relief she may achieve.

FURTHER READING

PPI’s four principles for response to tariffs and economic isolationism:

• Defend the Constitution and oppose rule by decree;

• Connect tariff policy to growth, work, prices, and family budgets, and living standards;

• Stand by America’s neighbors and allies;

• Offer a positive alternative.

Health and sickness:

The CDC has avian flu updates and counts of affected birds.

A perspective from the Animal and Plant Health Inspection Service.

USDA’s Food Safety Inspection Service explains egg import rules.

And the FDA’s egg standards.

Trade:

St. Louis Fed’s FRED services track egg prices.

Rollins and USDA on egg price strategy.

And egg-trade links from the Agricultural Marketing Service.

A reminder:

PPI in 2022 on the infant formula crisis.

And last:

Mr. Kennedy, the Health and Human Services Secretary, has suggested just letting avian flu spread around so that, eventually, hopefully, chicken populations gain immunity to it. Scientific American points out that encouraging the unchecked spread of disease is unwise, and new strains of flu virus rapidly replace old ones.

ABOUT ED

Ed Gresser is Vice President and Director for Trade and Global Markets at PPI.

Ed returns to PPI after working for the think tank from 2001-2011. He most recently served as the Assistant U.S. Trade Representative for Trade Policy and Economics at the Office of the United States Trade Representative (USTR). In this position, he led USTR’s economic research unit from 2015-2021, and chaired the 21-agency Trade Policy Staff Committee.

Ed began his career on Capitol Hill before serving USTR as Policy Advisor to USTR Charlene Barshefsky from 1998 to 2001. He then led PPI’s Trade and Global Markets Project from 2001 to 2011. After PPI, he co-founded and directed the independent think tank ProgressiveEconomy until rejoining USTR in 2015. In 2013, the Washington International Trade Association presented him with its Lighthouse Award, awarded annually to an individual or group for significant contributions to trade policy.

Ed is the author of Freedom from Want: American Liberalism and the Global Economy (2007). He has published in a variety of journals and newspapers, and his research has been cited by leading academics and international organizations including the WTO, World Bank, and International Monetary Fund. He is a graduate of Stanford University and holds a Master’s Degree in International Affairs from Columbia Universities and a certificate from the Averell Harriman Institute for Advanced Study of the Soviet Union.

Read the full email and sign up for the Trade Fact of the Week.

FACT: Americans dislike tariff increases and high prices.

THE NUMBERS: Political “independents,” asked*: “Do you approve or disapprove of Donald Trump’s handling of tariffs?” –

Disapprove:	71%
Approve:	29%

* CNN/SSRS, March 6-9, 2025

WHAT THEY MEAN:

What do Americans think of the Trump administration’s tariff binge? As a point of departure, here’s the “Chapter One” pledge from last fall’s Republican party platform:

“The Republican Party will reverse the worst inflation crisis in four decades that has crushed the middle class, devastated family budgets, and pushed the dream of homeownership out of reach for millions.  We will defeat inflation, tackle the cost-of-living crisis, improve fiscal sanity, restore price stability, and quickly bring down prices.”

We noted at the time that promises to cut prices and to raise tariffs – that came four notches down, in “Chapter Five” — contradict one another. (Lewis Carroll’s White Queen might happily believe six impossible things before breakfast.  Alice knows they’re impossible nonetheless.) A hypothetical Trump administration, we predicted, would have to choose between them.

The actual administration now appears to have chosen. Here’s the Treasury Secretary, Scott Bessent, telling Americans they’re wrong to care about the cost of goods, and the administration’s policy will likely bring prices up, not down:

  “Access to cheap goods is not the essence of the American dream.  … [shift to mumbling voice] Can tariffs be a one-time price adjustment? Yes.”

Insights from three different sources — consumer confidence surveys, public opinion polls, and House of Representatives debate — give some sense of what Americans now believe tariffs do, whether they like the administration’s approach, and how strongly they may feel.

First, the Conference Board’s February consumer-confidence readout and the University of Michigan’s March survey find Americans expecting prices to rise and believing they know why. The Conference Board summary:

  “Average 12-month inflation expectations surged from 5.2% to 6% in February. This increase likely reflected a mix of factors, including sticky inflation but also the recent jump of prices of key household staples like eggs and the expected impact of tariffs.  References to inflation and prices in general continue to rank high in write-in responses, but the focus shifted towards other topics. There was a sharp increase in the mentions of trade and tariffs, back to a level unseen since 2019. Most notably, comments on the current Administration and its policies dominated the responses.” 

Second, March public opinion polls suggest that Americans put more value than Mr. Bessent on cheap goods (see below for why this might be) and aren’t persuaded that tariff hikes will bring them much good in exchange. One, a CNN/SSRS poll done between March 6 and 9, asks about Mr. Trump’s handling of tariff policy. Reuters/IPSOS (March 3 to 5), meanwhile, asks about tariff increases in the abstract without mentioning Mr. Trump personally. Findings:

CNN/SSRS: “Do you approve or disapprove of the way Donald Trump is handling tariffs?”

	Approve	Disapprove
All respondents	39%	61%
Political independents	29%	71%
Republicans	80%	20%
Democrats	6%	93%
Non-college	41%	59%
Under 35	28%	72%
Over 45	45%	54%
Men	39%	60%
Women	39%	61%
Earns less than $50,000	38%	62%

 

Reuters/IPSOS:

	Agree	Disagree
“It’s a good idea to charge tariffs even if prices increase.”	32%	53%
“When the U.S. charges tariffs, American workers come out ahead.”	31%	49%
“Increasing tariffs will do more harm than good.”	53%	31%

 

Both show the administration (a) nearly four fathoms “underwater,” (b) holding a core Republican vote but not persuading anybody else, and (c) losing the “swing” and “non-white working-class” voters who last fall thought Mr. Trump would at least try to “quickly bring prices down.”

Third, political-system reactions — specifically, debate last week in the House of Representatives — cast some indirect light on the intensity of feeling. House Democrats, guided by Foreign Affairs Committee Ranking Member Greg Meeks, requested a vote last Wednesday to terminate the “emergency” declaration Mr. Trump is using to threaten tariffs on the energy, cars, groceries, home-building materials, medicines, and so on Americans buy from Canada and Mexico.  Rather than defend this, their Republican counterparts dodged by writing a surreal “House Rule,” declaring the last 9½ months of 2025 to be a single “day.”  Mr. Meeks:

“‘Each day for the remainder of the first session of the 119th Congress shall not constitute a calendar day.’ What? If you don’t think that makes any sense, neither do I. House Republicans are declaring that the days are no longer days and that time has literally stopped.”

It doesn’t make sense. But in the arcane ‘House Calendar world’, it does prevent a debate and avert a vote.  That day’s Congressional Record reports 23 comments on tariffs by House Democrats and none by Republicans. Rule of thumb: House members have a keen sense of local reaction to issues.  When they don’t want to talk about something, there’s a reason. At least for now, the administration’s choice to abandon its “bring down prices” pledge, and raise tariffs instead, doesn’t seem one many Americans like.

FURTHER READING

PPI’s four principles for response to tariffs and economic isolationism:

• Defend the Constitution and oppose rule by decree;
• Connect tariff policy to growth, work, prices and family budgets, and living standards;
• Stand by America’s neighbors and allies;
• Offer a positive alternative.

In this spirit, the Congressional Record for March 12 (pp. H1083 – H1183) records an honorable day for Rep. Meeks and House Democrats.  They are right on policy, to keep costs down for hourly-wage Americans trying to manage family budgets and to oppose unprovoked attacks on America’s neighbors and friends. And they are right on principle: Congress, not the president, has authority over “Taxes, Duties, Imposts, and Excises”, and attempts by presidents to bypass this and impose tariffs by decree are fundamentally anti-Constitutional. We applaud.

Public opinion:

CNN/SSRS on Mr. Trump’s handling of tariffs, budgets, the economy in general, and more.

Reuters/IPSOS on the same topics, without attaching them personally to Trump.

Quinnipiac (March 6-10) on Mr. Trump’s approach to trade with China, Canada, and Mexico.

The Conference Board (Feb. 25) finds consumers losing confidence and worried about tariffs and their price impact.

… and the University of Michigan Consumer Sentiment survey gets similar results.

Meanwhile:

As Americans worry about price increases, retaliations against American exporters are piling up. Current status:

• Canadian against $20 billion of U.S. steel, tech, and other exports.
• EU against $28 billion worth of American motorcycles, whiskey, beef, textiles, and other food and manufactured goods.
• Chinese against $28 billion in soybeans, chicken, wheat, pork, and other farm exports.

So far, they have chosen to use tariffs hitting American manufacturers and farmers. More inventive things with wider target ranges are ahead:

• Ontario Premier Doug Ford threatens a 25% ‘export tariff’ on Ontario’s energy sales to households, utilities, and businesses in New York, Michigan, and Minnesota.  The administration is puzzlingly irate: a Canadian export tariff has exactly the same impact on Americans as Mr. Trump’s own tariffs on Canadian energy. Why complain?
• The European Union’s Anti-Coercion Instrument, designed in 2023 to counteract Chinese trade pressures, can fade protection of U.S. patents, trademarks, and copyright, or tax services exports such as film, TV programs, and digital platforms.

And last — Tariffs, the hedge-fund alum, and the single mom:

Back to Mr. Bessent: “Cheap goods are not the essence of the American dream.” Without wealth-bashing for its own sake, that’s kind of easy for him to say …

Tariffs are taxes on purchases of physical goods, incorporated in store prices for shoppers and in production costs for goods-using businesses like manufacturers, restaurants, farms, and building contractors. That means they’re toughest on people who spend a lot of their money on goods.  Who might these people be?

The BLS’ Consumer Expenditure Survey finds that in 2023, America’s single-parent families spent 40% of their $52,462 post-tax median income on food, clothes, home furnishings, and other goods. This is twice the 20% of income that the top-decile families (median post-tax, $259,432) spent on goods. Put more directly, tariffs hit the waitressing single mom twice as hard as the law firm partner. Mr. Bessent, a hedge-fund alum whose income comes from real estate rentals, royalties, and capital gains, is an extreme case even in the top decile, probably spending closer to 1% than 20% of income on physical, tariff-able goods.  So he may personally have trouble seeing why anyone would care if food and clothing prices jump.

For better analysis and policy advice, Treasury can turn to Laura Duffy’s It’s Not 1789 Anymore: Why Trump’s Backward Tariff Agenda Would Harm America. As she explains, tariffs — though a defensible choice among the bad revenue options available to 18th-century Americans, or to the present-day governments of extremely poor and/or unstable countries — are a poor form of taxation and badly wrong for modern America: can’t raise enough revenue; non-transparent; regressive and inequitable; severe downstream harm.

ABOUT ED

Ed Gresser is Vice President and Director for Trade and Global Markets at PPI.

Ed returns to PPI after working for the think tank from 2001-2011. He most recently served as the Assistant U.S. Trade Representative for Trade Policy and Economics at the Office of the United States Trade Representative (USTR). In this position, he led USTR’s economic research unit from 2015-2021, and chaired the 21-agency Trade Policy Staff Committee.

Ed began his career on Capitol Hill before serving USTR as Policy Advisor to USTR Charlene Barshefsky from 1998 to 2001. He then led PPI’s Trade and Global Markets Project from 2001 to 2011. After PPI, he co-founded and directed the independent think tank ProgressiveEconomy until rejoining USTR in 2015. In 2013, the Washington International Trade Association presented him with its Lighthouse Award, awarded annually to an individual or group for significant contributions to trade policy.

Ed is the author of Freedom from Want: American Liberalism and the Global Economy (2007). He has published in a variety of journals and newspapers, and his research has been cited by leading academics and international organizations including the WTO, World Bank, and International Monetary Fund. He is a graduate of Stanford University and holds a Master’s Degree in International Affairs from Columbia Universities and a certificate from the Averell Harriman Institute for Advanced Study of the Soviet Union.

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FACT: 69% of Americans want their next car to cost less than $50,000.

THE NUMBERS: Steel use per $1 billion of U.S. “real GDP,” 2017 and 2024* – 

2024:	3,990 tons
2017:	5,050 tons

*BEA for U.S. GDP adjusted for inflation in 2017 dollars (Table 1.1.6), and the U.S. Geological Survey’s Mineral Commodity Summaries (“apparent consumption”) for steel and aluminum use.

WHAT THEY MEAN:

The Trump administration’s explanations for its tariff binge shift and vary. (“Foreigners ripping us off,” “fentanyl,” “trade balance,” “reciprocity,” etc.) But they often converge on an assertion that higher trade barriers would make U.S. manufacturing grow, and that the harms of higher tariffs –lost wealth, foreign retaliations against American farm products and manufactures, depressed family living standards — are less than this future benefit. (lllustrative comments below from Cabinet Secretaries Bessent & Lutnick.) Outside the administration, Shawn Fain, president of the venerable United Auto Workers union, makes a similar claim, advocating trade collaboration with Mr. Trump in the Washington Post last January on the grounds that higher tariffs would mean fewer imported cars, more U.S. car production, and presumably, more auto-plant hires and dues-paying UAW members.

Autos are very pertinent this month. Despite the financial-market plunges and fading GDP outlook accompanying the Trump administration’s Canada and Mexico fiasco, it still appears to envision putting tariffs on cars — as well as medicines (both prescription and over-the-counter), semiconductors, building materials, and various other things — in April. So is Mr. Fain right about what might happen afterwards? We’ll start with the people who get the final say — Americans thinking about buying cars this year — and draw from recent heavy-industry tariff experience to inform an answer.

The day the Post published Mr. Fain’s article, Deloitte released a January 2025 poll of Americans on car ownership. Two points jump out: (i) 69% of Americans hope to pay less than $50,000 for their next car, and (ii) 44% of Americans aged 18 to 34 years are willing to give up auto ownership altogether in favor of “Mobility as a Service.” (“MaaS,” meaning using a mix of ride-sharing, bicycles, public transit, taxis, and rental cars instead of buying a personal car.)

Now to the recent heavy-industry experience:

In March 2018, the first Trump administration raised tariffs to 25% on most steel and 10% on most aluminum. Between September 2018 and the summer of 2019, it added tariffs of 25% and 7.5% to most Chinese-made products. Both mostly stayed in place during the Biden era. Since then U.S. manufacturing output and job growth have slowed. The average post-financial-crisis, Obama-administration-policy year saw $41 billion in real-dollar manufacturing output growth and a net gain of 125,000 manufacturing jobs. Post-2018, the averages are $31 billion in real output growth and 40,000 net new jobs. Meanwhile, the Bureau of Labor Statistics’ count of specifically unionized manufacturing workers has dropped by 216,000, and the manufacturing share of U.S. GDP has shrunk by about a point:

Manufacturing share of U.S. GDP, 2024**:	10.0%
Manufacturing share of U.S. GDP, 2017:	10.9%

One can argue — in a miniature version of the broader claim that lost wealth and diminished family purchasing power are prices worth paying for the industrial-sector growth the administration is predicting — that somewhat smaller U.S. total manufacturing output is worth it to get larger steel and aluminum industries. But that didn’t happen either. Instead, steel production in the U.S. has fallen from 87.8 million tons in 2018 to 81 million tons in 2024, and primary aluminum production from 740,000 tons to 670,000 tons.

Why?  The reason appears to be that industrial buyers now use less metal. The U.S. Geological Survey’s annual “Mineral Commodity Summaries” reports that from 2012 to 2017 the U.S. economy used 99 million tons of steel and 4.94 million tons of aluminum on average each year. From 2019 to 2024 — the six years since the tariffs, skipping 2018 since the tariffs came halfway through — the comparable averages were 94 million tons of steel and 4.37 million tons of aluminum. The 2024 totals were lower still, at 93 million tons of steel and 4.3 million tons of aluminum. So steel use dropped by about 5% and aluminum by 12%; both fell even faster relative to real GDP; and U.S. domestic production of these metals is down a bit rather than up.

Now back to cars. A 25% tariff on cars in April might raise the cost of a new $50,000 car to $60,000. Meanwhile, tariffs on the many “inputs” that go into a car — metals, semiconductors, Internet routers, wiring, radios, shatterproof and mirrored glass, leather and vinyl for seat covers, etc. — would make it more expensive for U.S.-based factories to make cars, and also raise repair and tune-up bills. Taking Deloitte’s insights on the auto-buying public into account, the likely result is that (a) some of the 69% of Americans hoping to pay less than $50,000 for a new ride wouldn’t buy one, (b) used cars would grow more attractive compared to new ones, and (c) more young Americans would choose not to buy them at all.

In sum, it’s hard to see how Mr. Fain’s hopes could materialize. And it’s easy to imagine the opposite: higher car prices, quieter dealerships, fewer sales, and eventually fewer hourly-wage auto production jobs. So here’s an alternative suggestion for the UAW’s policy shop: rather than work with Mr. Trump to raise tariffs and car prices, ask the members for ideas on how to give young Americans the low-cost cars they seem to want.

* Using the BEA and BLS annual averages, more or less equivalent to the mid-year total.

** BEA’s ‘GDP by Industry’ data. These are complete through Q3 2024; and the manufacturing share was 10.0% in the second and third quarters. The first estimate for Q4 is not yet available until March, so the final annual share may be slightly above or below the current 10.0% estimate.

FURTHER READING

Our four principles for response to Trump administration tariffs, whether last week’s on Canada/Mexico/China, or the car/medicine/semiconductor proposal:

*  Defend the Constitution and oppose rule by decree;

*  Connect tariff policy to growth, work, prices and family budgets, and living standards;

*  Stand by America’s neighbors and allies;

*  Offer a positive alternative.

Cars:

Deloitte’s poll finds prospective buyers hoping for cheaper cars, and nearly half of young Americans wondering to get one at all.

… and UAW President Fain in the Washington Post on hopes for high-tariff cars.

Data: 

BEA’s ‘GDP by Industry’ series.

BLS’ gloomy look at trends in union membership in 2024. See Table 4 for manufacturing — down 216,000 members since the 2018 tariffs, probably for many reasons but not a hopeful sign for tariff-enthusiasts — and other industry-by-industry figures.

Metals:

The U.S. Geological Survey’s Mineral Commodity Summaries 2025.

USITC’s estimates for the effects of steel, aluminum, and China tariffs as of 2021, including the cost burden (“nearly full pass-through” to consumers), and effects on other industries in for the metal tariffs — a $2.2 billion expansion (again as of 2021) of aluminum and steel output, offset by a $3.5 billion contraction in auto parts, machinery, tool-making, and other metal-using manufacturing industries. No estimate for construction, and note that while the metals section estimates both benefits for protected metal-producing companies and cost for metal-using industries, the China section does only the “protected and benefiting” side and therefore isn’t useful as a picture of the effect on manufacturing.

And, as promised, some then-and-now with Cabinet Secretaries:

Then: Here’s the Republican party platform promising lower prices a few months back:

“The Republican Party will reverse the worst inflation crisis in four decades that has crushed the middle class, devastated family budgets, and pushed the dream of homeownership out of reach for millions. We will defeat inflation, tackle the cost-of-living crisis, improve fiscal sanity, restore price stability, and quickly bring down prices.”

Now: As Trump administration officials propose tariffs on groceries, lumber and other home-building materials, medicines, cars, T-shirts, etc, Treasury Secretary Bessent (via Politico) now says Americans shouldn’t care about prices — “access to cheap goods is not the essence of the American dream” — and then mumbles a bit:

“Can tariffs be a one-time price adjustment? Yes.”

Also now: Meanwhile, two blocks down 15th Street, Commerce Secretary Lutnick says the following (again via Politico) about Trump administration amplifying steel and aluminum tariffs:

“When you imposed the tariffs the first time, you added 120,000 jobs,” Lutnick told Trump. “And since that time, [the tariffs have] been picked away and nicked away and excluded away, and we’ve lost 107,000 jobs. And remember, these aren’t just general jobs. These are steel workers in America.”

Fact Check: Per the Bureau of Labor Statistics’ “Employment, Hours, and Earnings” survey (in “durable goods manufacturing”) 83,300 people worked in iron and steel mills as of February 2018. The count has varied in a narrow band since then — 88,400 high, 78,100 low, 83,500 in January 2025 — with the low point in January 2021 as the Biden administration took over and COVID re-opening got underway. Nothing remotely like “120,000 jobs gained” happened, and “107,000 jobs lost” is impossible since it’s a bigger number than the total number of steelworkers.

ABOUT ED

Ed Gresser is Vice President and Director for Trade and Global Markets at PPI.

Ed returns to PPI after working for the think tank from 2001-2011. He most recently served as the Assistant U.S. Trade Representative for Trade Policy and Economics at the Office of the United States Trade Representative (USTR). In this position, he led USTR’s economic research unit from 2015-2021, and chaired the 21-agency Trade Policy Staff Committee.

Ed began his career on Capitol Hill before serving USTR as Policy Advisor to USTR Charlene Barshefsky from 1998 to 2001. He then led PPI’s Trade and Global Markets Project from 2001 to 2011. After PPI, he co-founded and directed the independent think tank ProgressiveEconomy until rejoining USTR in 2015. In 2013, the Washington International Trade Association presented him with its Lighthouse Award, awarded annually to an individual or group for significant contributions to trade policy.

Ed is the author of Freedom from Want: American Liberalism and the Global Economy (2007). He has published in a variety of journals and newspapers, and his research has been cited by leading academics and international organizations including the WTO, World Bank, and International Monetary Fund. He is a graduate of Stanford University and holds a Master’s Degree in International Affairs from Columbia Universities and a certificate from the Averell Harriman Institute for Advanced Study of the Soviet Union.

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FACT: Isolationism and appeasement are dangerous.

THE NUMBERS: Ukraine economic indicators, 2022 and 2025* –

	2022	2025
GDP	$161 billion	$189 billion
Growth rate	-29.7%	2.5%
Inflation	20.2%	9.2%
Unemployment	24.5%	12.7%

* International Monetary Fund, World Economic Outlook database October 2024

WHAT THEY MEAN:

As President Zelenskyy returns to Kyiv, some thoughts on Russia’s war, the Ukrainian cause, the White House’s revival of isolationism and appeasement, and the dangers it poses for America and America’s friends:

Three years ago this week, we noted that Russia’s invasion of Ukraine was one of very few attempts since World War II — arguably only the second, together with Saddam Hussein’s invasion of Kuwait in 1990 — by one UN member to attack another and attempt to wipe it off the map. From this point of departure, we made three points about the event and the appropriate American and Allied response to it. Here they are, shortened a bit for space:

(1) The post-World War II ban on wars of conquest is the foundation of international order, whether one’s point of reference is international law and the UN Charter, or the logic of peace and security.  Respect for it is essential to international achievement in any field, from peaceful settlement of disputes among countries, to scientific and medical progress, environmental protection, economic policy, and international security.

(2) Russia’s violation of this ban in the attack on Ukraine was then, and remains now, especially dangerous as the action not of the rogue dictator of an isolated minor power, but of a permanent member of the UN Security Council. Should it succeed, we can expect more such events and a much more dangerous world. Should it fail, conversely, the taboo on wars of conquest will be stronger and future imitators more effectively deterred.

(3) The Biden administration and allies from Australia, Korea, and Japan to Canada, the EU, and the UK were right to respond with economic and military aid for Ukraine, and extensive sanctions on Russia. Hindsight from 2025 can dispute some of their specific choices, especially on weapons provision. But whether from the moral or the national-interest perspective, their decision to stand with Ukraine was correct.

It remains so now. Ukraine has used its support well. Its army defeated Russia’s initial attack on Kyiv in 2022 and holds the line in the east. Its very modest navy — mainly a collection of small boats armed with ingenious home-built naval drones — defeated Russia’s Black Sea Fleet in 2023, sinking a third of its capital ships and forcing the rest to shelter in port ever since.  And on the home front, as the IMF data above show, Ukraine’s economy has grown by about 20% since the low of 2022, with unemployment and inflation both cut by half; its start-up tech community has created ex nihilo an internationally competitive high-tech defense industry; and its Black Sea victory has reconnected Ukraine’s agricultural heartland to customers in Europe and the United States. More basically, Ukraine’s public is not about to buckle, its government is stable, and its defense is a just cause.  Americans have no reason to reassess our commitment.

The Trump administration, to our great dismay, has taken a different approach, vividly displayed in Friday’s White House meeting.  In the past month it has refused to condemn Russia’s invasion, opened direct talks with Russia without the presence of Ukrainians or European allies, and now has made an open attempt — including stopping military aid — to coerce Ukraine itself. This is full of risk — above all for Ukrainians, next for U.S. allies such as the Baltic states and Poland, and finally for Americans too.

The administration’s recycling of the term “America First” for its approach is evocative and instructive.  The first group to use this name, the “America First Committee,” was an organization created in September 1940 – that is, during the Battle of Britain — with a specific goal: to prevent Franklin Roosevelt from aiding the U.K. with ships, planes, industrial supplies, and food through the “Lend-Lease” program. Its roughly 800,000 members varied — some were sincere pacifists, others convinced isolationists and worried college students, and some admired dictators as “strong” and “decisive” personalities and considered fascism the energetic “wave of the future.” All of them were wrong, and some of them were bad. Their failure in 1940 was good for the world and America alike.

Eight decades later, Friday’s White House meeting – as well as the administration’s extraordinary decision to oppose the UN’s February resolution condemning Russia’s invasion of its neighbor – recall the ugliest part of this earlier America First movement.  The February meeting by the Secretary of State and National Security Advisor with Russian officials in Saudi Arabia — likely about Ukrainian land among other things and, we repeat, without Ukrainians present — echoes the naivete of the Committee’s pacifist/isolationist members: won’t a few concessions appease an aggressive power?  Could it hurt to try?  The obvious point of reference is the 1938 Munich Agreement, where the leaders of the two big European democracies — the U.K.’s Chamberlain and France’s Daladier — conceded Czech land to an aggressor in the hope of avoiding conflict. Here’s the classic in-the-moment verdict from an opposition MP:

“[Our people] should know that we have sustained a defeat without a war, the consequences of which will travel far with us along our road; they should know that we have passed an awful milestone in our history, when the whole equilibrium of Europe has been deranged, and that the terrible words have for the time being been pronounced against the Western democracies: ‘Thou art weighed in the balance and found wanting.’

“And do not suppose that this is the end. This is only the beginning of the reckoning. This is only the first sip, the first foretaste of a bitter cup which will be proffered to us year by year unless by a supreme recovery of moral health and martial vigour, we arise again and take our stand for freedom as in the olden time.”

Churchill was speaking of a fait accompli. By contrast, Mr. Trump’s venture has so far not succeeded.  Americans of both parties who have a greater sense of realism, who appreciate the danger of appeasement and isolationism, and who are more willing to be guided by right and wrong, may be able to prevent a second such outcome. They need to try.

FURTHER READING

PPI on Ukraine:

Tamar Jacoby leads PPI’s Kyiv-based New Ukraine Project.

… and recent pieces on Friday’s White House meeting and the February UN vote as an warning of the possible end of U.S. global leadership.

PPI President Will Marshall (July 2024) on Ukraine and NATO.

Ben Ritz on the modest budget impact of aid to Ukraine, and the very high cost failure might bring.

And Ed Gresser on economic trends and the impact of Ukraine’s Black Sea naval victory, with a point of departure in Ukraine’s large society of beekeepers and their 11-tons-of-honey-a-day American market.

Primary sources:

The UN Charter. Core sentence: “All members shall refrain in their international relations from the threat or use of force against the territorial integrity or political independence of any state, or in any other manner inconsistent with the Purposes of the United Nations.”

President Zelenskyy’s Victory Plan, October 2024.

Ukrainian Ambassador Sergiy Kyslytsya at the UN Security Council, February 2022.

The Ukrainian Embassy has updates on home events and U.S.-Ukraine relations.

The State Department’s release on Rubio goals for Russia talks.

… Rubio/Waltz do their best to explain in Riyadh.

And a look back:

The Franklin D. Roosevelt Library remembers Lend-Lease.

Historian Susan Dunn on Roosevelt, Willkie, Lindbergh, the America First Committee, and the 1940 presidential election.

Churchill on the Munich Agreement, 1938.

And from an earlier generation, British historian A. L. Rowse recalls the 1930s in Appeasement: A Study in Political Decline. Two apposite quotes:

“The fundamental reason for the Second World War was the withdrawal of the United States out of the world-system: that, more than anything else, allowed the aggressors to get away with things.  Not all the mistakes this country [i.e. the UK] was responsible for in the 1920s and 1930s equaled the one enormous and irreparable error the United States made in contracting out of responsibility.”

“Whatever concessions were justifiable to Weimar Germany, no concessions should ever be made to Hitler.  That this was the right line to adhere to all the evidence now proves: hold the ring around Hitler’s Germany, and the break will come inside.”

ABOUT ED

Ed Gresser is Vice President and Director for Trade and Global Markets at PPI.

Ed returns to PPI after working for the think tank from 2001-2011. He most recently served as the Assistant U.S. Trade Representative for Trade Policy and Economics at the Office of the United States Trade Representative (USTR). In this position, he led USTR’s economic research unit from 2015-2021, and chaired the 21-agency Trade Policy Staff Committee.

Ed began his career on Capitol Hill before serving USTR as Policy Advisor to USTR Charlene Barshefsky from 1998 to 2001. He then led PPI’s Trade and Global Markets Project from 2001 to 2011. After PPI, he co-founded and directed the independent think tank ProgressiveEconomy until rejoining USTR in 2015. In 2013, the Washington International Trade Association presented him with its Lighthouse Award, awarded annually to an individual or group for significant contributions to trade policy.

Ed is the author of Freedom from Want: American Liberalism and the Global Economy (2007). He has published in a variety of journals and newspapers, and his research has been cited by leading academics and international organizations including the WTO, World Bank, and International Monetary Fund. He is a graduate of Stanford University and holds a Master’s Degree in International Affairs from Columbia Universities and a certificate from the Averell Harriman Institute for Advanced Study of the Soviet Union.

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