For years, I've been criticizing the ridiculous economic notions of socialists and communists. Today, that club has a new member.<\/p>\n
Trump imposes tariffs on uninhabited islands based on false information<\/big><\/p>\n Yesterday, Trump signed an executive order<\/a> imposing tariffs on a multitude of countries on<\/strong> what he has called \"liberation day\"<\/a>. 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<\/a>.<\/p>\n The surprises soon arrived. For example, the last part of the list includes the Heard Island and McDonald Islands<\/a>, an Australian territory with no inhabitants<\/a> 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<\/strong>, so in revenge they impose a tariff with that percentage. It's completely absurd.<\/strong><\/p>\n It also imposes tariffs on countries with free trade agreements with the US.<\/big><\/p>\n There's another slightly ridiculous case. For example, Trump also imposes a 10% tariff on the Cocos Islands<\/strong>, an Australian territory in the Indian Ocean with 544 inhabitants<\/a> and whose economy depends almost entirely on Australia<\/strong>, since its agriculture is almost subsistence-based, tourism is scarce, and its only known export product is stamps<\/strong>. The White House claims that they impose 10% tariffs on US products there, but this is false, since Australian law applies there.<\/p>\n In fact, the first part of the White House list includes Australia with 10% tariffs<\/a>. 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<\/a> 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:<\/p>\n This is against the spirit of our two nations\u2019 enduring friendship and fundamentally at odds with the benefits our economic partnership has delivered over more than 70 years. Australia has no tariffs on goods from the United States.<\/strong><\/em><\/p><\/blockquote>\n In fact, The US also has free trade agreements with several other countries<\/a>, including Canada, Israel, South Korea, Chile, Colombia, and Costa Rica, countries on which Trump has also imposed tariffs<\/strong>. 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.<\/p>\n Trump's trap: he presents what is a trade deficit as a tariff<\/big><\/p>\n 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<\/strong>. The executive order<\/a> clearly exposes the trap from its very title:<\/strong><\/p>\n \"Regulating Imports with a Reciprocal Tariff to Rectify Trade Practices that Contribute to Large and Persistent Annual United States Goods Trade Deficits<\/strong>\"<\/em><\/p><\/blockquote>\n As the text makes clear repeatedly, this is not just about tariffs, but about trade deficits<\/strong>, 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<\/a>:<\/p>\n 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<\/strong> with that country and divided it by the country's exports to us.<\/p>\n So we have a $17.9 billion trade deficit with Indonesia.<\/strong> 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.<\/strong><\/em><\/p><\/blockquote>\n An economic nonsense with exclusively political ends<\/big><\/p>\n 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<\/strong> and surprising in a well-known businessman, but not in a politician who believes that anything goes to get votes.<\/p>\n 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<\/strong>, 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,<\/strong> but it will allow Trump to sell this nationalist narrative to that segment of his electorate that has no understanding of macroeconomics.<\/p>\n Trump favors Russia and punishes Ukraine with his tariffs<\/big><\/p>\n On the other hand, curiously, the White House does not impose any tariffs on Russia, but it does on Ukraine<\/strong> (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<\/a>, in 2024 the US imported Russian goods worth $3 billion<\/strong>, 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<\/strong>, so according to Trump's nationalist theses, imposing such tariffs on Russia would be justified.<\/p>\n
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