Trump's nonsense and traps with tariffs: he punishes Ukraine but not Russia

For years, I've been criticizing the ridiculous economic notions of socialists and communists. Today, that club has a new member.

Trump and the Russian invasion of Ukraine, a predictable failure to which he contributed
Trump's shameful attitude towards Zelensky: rudeness to the victim and praise to the aggressor

Trump imposes tariffs on uninhabited islands based on false information

Yesterday, Trump signed an executive order imposing tariffs on a multitude of countries on what he has called "liberation day". The full list of countries and territories with the corresponding tariffs imposed by the US was published at 10:32 p.m. CET by the White House Rapid Response 47 channel.

The surprises soon arrived. For example, the last part of the list includes the Heard Island and McDonald Islands, an Australian territory with no inhabitants and which has a large colony of penguins, which - obviously - do not export any products to the United States. According to the White House, these islands (which have no commercial relations) impose 10% tariffs on the US, so in revenge they impose a tariff with that percentage. It's completely absurd.

It also imposes tariffs on countries with free trade agreements with the US.

There's another slightly ridiculous case. For example, Trump also imposes a 10% tariff on the Cocos Islands, an Australian territory in the Indian Ocean with 544 inhabitants and whose economy depends almost entirely on Australia, since its agriculture is almost subsistence-based, tourism is scarce, and its only known export product is stamps. The White House claims that they impose 10% tariffs on US products there, but this is false, since Australian law applies there.

In fact, the first part of the White House list includes Australia with 10% tariffs. The list claims that Australia imposes 10% tariffs on US products, but this is false. Australia has had a free trade agreement with the United States since January 1, 2005. Following Trump's announcement that he would impose tariffs on the United States, Anthony Albanese, Prime Minister of Australia, said on March 12:

In fact, The US also has free trade agreements with several other countries, including Canada, Israel, South Korea, Chile, Colombia, and Costa Rica, countries on which Trump has also imposed tariffs. Obviously, these tariffs are a violation of the international treaties signed by the US, but the current president of that country seems to care very little about the treaties.

Trump's trap: he presents what is a trade deficit as a tariff

How does Trump justify this nonsense? Well, he doesn't do so like many of his followers, who claim that these tariffs are reciprocal: they are not. The executive order clearly exposes the trap from its very title:

"Regulating Imports with a Reciprocal Tariff to Rectify Trade Practices that Contribute to Large and Persistent Annual United States Goods Trade Deficits"

As the text makes clear repeatedly, this is not just about tariffs, but about trade deficits, that is, the negative difference between the US's exports (what it sells) and imports (what it buys) from other countries. American journalist James Surowiecki commented last night:

Just figured out where these fake tariff rates come from. They didn't actually calculate tariff rates + non-tariff barriers, as they say they did. Instead, for every country, they just took our trade deficit with that country and divided it by the country's exports to us.

So we have a $17.9 billion trade deficit with Indonesia. Its exports to us are $28 billion. $17.9/$28 = 64%, which Trump claims is the tariff rate Indonesia charges us. What extraordinary nonsense this is.

An economic nonsense with exclusively political ends

So, with these tariffs, Trump is not seeking reciprocity, but rather inventing data with the absurd purpose of preventing the US from importing more than it exports to any country: it is something purely ridiculous and surprising in a well-known businessman, but not in a politician who believes that anything goes to get votes.

It's normal for a country not to always have a trade surplus with every country it interacts with. Everything will depend on the products each country needs or sells. These tariffs lack economic logic and seem designed to sell a nationalist ideological narrative to Trump's voters, a narrative that blames other countries for all of America's problems. It's an unrealistic and ridiculous narrative, which will cause serious damage to the US economy, but it will allow Trump to sell this nationalist narrative to that segment of his electorate that has no understanding of macroeconomics.

Trump favors Russia and punishes Ukraine with his tariffs

On the other hand, curiously, the White House does not impose any tariffs on Russia, but it does on Ukraine (10%). Some have claimed that this is because the sanctions imposed by the US imply that this country does not have commercial relations with Russia, but this is not true: according to the US government itself, in 2024 the US imported Russian goods worth $3 billion, while US exports of goods from the US to Russia were $526.1 million. Significantly, the US trade deficit in goods with Russia was $2.5 billion in 2024, so according to Trump's nationalist theses, imposing such tariffs on Russia would be justified.

In contrast, according to the US government, US goods exports to Ukraine in 2024 were $1.7 billion, an increase of 60.7% ($635.9 million) from 2023. At the same time, US goods imports from Ukraine totaled $1.2 billion in 2024, a decrease of 10.1% ($133.8 million) from 2023, likely due to the Russian invasion. Thus, The US achieved a trade surplus with Ukraine of $497.0 million in 2024, an increase of 282.2% ($769.7 million) compared to 2023.

According to the thesis of that executive order, Trump would have more reasons to impose tariffs on Russia than on Ukraine, especially considering that the Ukrainian people are fighting for their survival and that Moscow is waging a war of aggression against its southwestern neighbor. Trump's imposing tariffs on Ukraine but not on Russia demonstrates a clear arbitrariness in governing, in which economic arguments don't matter and what ultimately prevails are the president's likes and dislikes, which have already become very clear in recent weeks in relation to that war.

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Photo: Reuters.