Trade Deficit = Whip Hand

Donald Trump makes the textbook economics explicit:

The countries that deem US tariffs on their goods to be too high can just stop doing business with America altogether, President Donald Trump has suggested. He further insisted that his latest trade policies have made the US “strong,” bringing “billions of dollars a day” into its coffers.

On Wednesday, the US president slapped stiffer “reciprocal” tariffs on nearly 90 nations, only to announce a 90-day pause and a “substantially lowered Reciprocal Tariff during this period, of 10%,” in a post on his Truth Social platform several hours later. The pause however does not apply to China, with which the US has engaged in a tit-for-tat exchange of ever-higher tariffs, with most of Beijing’s imports now subject to a 145% duty.

Speaking to reporters aboard Air Force One on Friday, Trump proclaimed that “ultimately, we pretty much can do what we want to do. We can set the tariff, and they can choose not to deal with us, or they can choose to pay it,” he explained, asserting that “if they think it’s too high, they don’t have to do business with us.”

It’s a simple and obvious power equation. When you have nothing to lose, and you’re the one who owns the market in which everyone is interested, then you’re in control. No country with a trade deficit with the USA has any leverage at all, because the US is obviously better off not trading with it than continuing to trade with it on the basis of the system that has impoverished and hollowed-out the US economy.

This is why the threats of returning the favor are so empty and stupid. The USA would BENEFIT from pure autarky, so trade restrictions are not a viable threat. The President’s move is brilliant, because it not only protects the US markets, it prevents US companies from leaving the USA as well.

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Mailvox: Vox Dai Responds

Edward Feser wrote a critique of President Trump’s new tariffs and his trade policy. A reader asked ChatGPT to respond to his critique as if it was me. And apparently AI now does non-fiction nearly as well as it does fiction.

1. Feser’s Overemphasis on Prudential Moderation over Existential Necessity

Vox Day might begin by pointing out that Feser’s argument is essentially one of technocratic prudence—tariffs might be useful in moderation, if well-targeted, in the right economic climate, with good timing, and clear justification. Vox would call this academic dithering in the face of civilizational crisis. From his view, America is not merely suffering a mild imbalance of trade—it is being gutted by decades of globalist betrayal that have systematically offshored its manufacturing capacity, hollowed out its industrial base, and turned its working class into wage-serfs of the service economy.

“Feser speaks as if we are tweaking dials on a functioning machine. The machine is broken. Or more accurately, it’s been sabotaged.”

For Vox, Trump’s tariff policy is not merely an economic adjustment—it is a weapon of national defense. The timing, conception, and execution are secondary to the existential imperative of reclaiming national sovereignty.

2. Feser’s Appeal to Order Is Misplaced When the Existing Order Is Corrupt

Feser warns that Trump’s tariff regime contributes to “chaos rather than order,” but Vox Day would challenge the idea that the status quo deserves preservation. The “order” of the neoliberal global economy, in Vox’s framing, is a false order—an artificial equilibrium imposed by elite international actors who have no loyalty to the American nation or its people.

“There is no ‘order’ in a system that rewards financial speculation over production, that imports the labor force of the Third World to lower wages, and that treats citizens as mere consumers.”

Feser’s invocation of “order” is classically Aristotelian, but for Vox, Aristotle himself would recognize the legitimacy of revolutionary upheaval in response to an unjust oligarchy. In that light, disruption is not vice but virtue.

3. Misdiagnosing Trump’s Popular Support as Fanaticism

Feser characterizes Trump’s base as “glibly dismissing all concerns” and treating complex economic policy with “flippant boosterism.” Vox would see this as an elitist dismissal of populist wisdom. Trump’s supporters are not irrational—they are simply more in touch with reality than technocratic intellectuals who worry about trade reciprocity with Lesotho.

“It is not ‘flippant’ to support a policy that seeks to restore your community’s livelihood. It is not ‘unserious’ to recognize that the system has failed and to back the only leader willing to tear it down.”

Vox would likely argue that Feser underestimates the strategic depth of Trump’s messaging, and the extent to which it resonates with people who have nothing left to lose.

4. Feser’s Focus on Legality Ignores the Regime Question

Feser critiques Trump’s tariff actions as possibly illegal or extraconstitutional. Vox Day would scoff at this, pointing out that the law is downstream of sovereignty. If the regime in question is illegitimate—unaccountable, globalist, hostile to the nation—then adherence to its procedures is not a moral good.

“The Constitution is not a suicide pact. The post-WWII economic order is not sacred. If reclaiming control requires bending the rules written by those who sold us out, so be it.”

Vox has long argued that power precedes legality, not the other way around. Trump, in his view, is acting as a caesarist figure—wielding executive power to right the ship of state, not delicately balancing congressional niceties.

5. Feser’s Economic Assumptions Are Still Liberal, Even If Postliberal

Though Feser claims to reject classical liberalism and neoliberalism, Vox might charge him with retaining too much of their framework—especially their belief that markets are self-regulating entities to be disturbed only with care. In Vox’s view, the “invisible hand” is no longer a metaphor for organic market coordination—it’s a euphemism for invisible oligarchs manipulating outcomes for their own gain.

“Tariffs aren’t ‘inefficient’ if the market itself is rigged. Free trade isn’t moral if it’s enforced by military alliances, IMF dictates, and offshoring subsidies.”

Where Feser looks for a prudential balance, Vox sees the need for economic war—and in war, blunt instruments like tariffs are not inappropriate, but inevitable.

6. Missing the Meta-Political Stakes

Ultimately, Vox would say that Feser misses the forest for the trees. This isn’t about the comparative merits of tariff rates or whether poor island nations are treated fairly. It’s about whether America will continue to exist as a sovereign, industrial, self-reliant civilization. That is not a question that can be solved through abstract appeals to distributist theorists or cautious policy think-pieces.

“You don’t use a scalpel to excise a gangrene-stricken limb. You use an axe.”


I would say that hits six for six, even if some of the wording is a little different than I might have chosen. I do love that reinterpretation of Smith’s Invisible Hand, though. I’ll see if it missed anything and add it in a subsequent post; I suspect Mr. Feser still subscribes to now-disproven comparative advantage theory on the basis of the points he raises, but I don’t actually know that. But if he does, obviously that would be the very first point I would raise, given my conclusive disproof of it, to say nothing of Ian Fletcher’s.

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104 and Counting

Tariffs on Chinese goods are going to 104 percent.

China now faces another 50% in tariffs after Beijing missed a noon deadline to withdraw the retaliatory import taxes it imposed on the United States.

The new tariffs will go into effect at 12:01 am, the White House said. That brings the total tariffs on all goods from China coming into the United States to 104%.

Trump placed a 34% increase on China when he announced his tariff plan on Liberation Day. That was on top of 20% import taxes rolled out earlier this year on Beijing.

The president, on Monday, pledged another 50% tariffs after Beijing responded to his tariff threat with a 34% increase on U.S. goods coming into China.

Well, the Chinese can’t say they weren’t warned. I warned them, on their state TV, nearly nine years ago, that President Trump would wage, and would win, a trade war against them. None of the Chinese or Hong Kong economists agreed, of course, but what was obvious then is even more obvious now.

When you’re running a trade surplus, you can’t win a tariff battle. Reciprocal tariffs are not a viable weapon for the country doing most of the exporting, because the importing country benefits from protecting its manufacturers.

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The Ultra-Rich Condemn Robin Hood

A host of American financiers and billionaire investors have criticized President Donald Trump over the sweeping tariffs he announced last week, calling the measures “poorly advised” and warning of serious consequences for the US economy.

In other news, the American Society for Surprise Sex condemned the President’s new executive action establishing stronger penalties for rapists, with automatic life-in-prison for anyone convicted of sexual assault on a minor. ASSS spokesman George “Rape Rape” Martin decried the measure, calling it: “poorly conceived” and warning that it would have a depressive effect on novelists who are struggling to complete their books.

This meme fairly well characterizes the state of popular and media discourse about the tariffs.

Free trade is an absolute evil and an obvious lie. Both Ian Fletcher and I have conclusively, and separately, proven that it cannot deliver the promised benefits while the costs will eventually be unsupportable for any nation. If, for some reason, you are still a believer in the concept of free trade, I suggest reading my three-part critique of Henry Hazlitt’s orthodox case for free trade, in which I point out the multiple errors in the argument that was presented as the best possible case for free trade.

If you want more detailed demolitions of the concept, read WHY FREE TRADE DOESN’T WORK by Ian Fletcher and ON THE QUESTION OF FREE TRADE by me and Dr. James D. Miller, PhD.

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China Hits Back

Even though the trade war is not the war that China can win right now.

China will soon impose an additional 34 per cent tariffs on all American imports in retaliation for Donald Trump’s 34 per cent levy. Beijing announced the measure today, the most serious escalation in a trade war with Trump that has fed fears of a recession and triggered a global stock market rout.

The new tariff, which comes into effect on April 10, matches the rate of the ‘reciprocal’ tariff imposed by Trump this week. The levies are in addition to the existing tariffs already imposed on US goods.

US exports to China totalled $143.5 billion last year, according to Office of the US Trade Representative data. Oilseeds and grains, including soybeans, machinery and aerospace products were America’s top exports to the country. The US imported $438.9 billion worth of goods from China last year, with top imports including electrical and electronic equipment, machinery, toys, and plastics.

I don’t know why China is doing this, since the balance of trade surplus means that the more US-China trade declines, the more it will hurt China rather than the USA. All I can think is that China isn’t actually concerned about the inevitable trade war, but is more interested in gradually turning up the heat in a conflict that it knows to be unavoidable.

Time would appear to be on China’s side in this regard. It has been 25 years since Bill Clinton announced the United States-China Relation Act of 2000 that opened the floodgates of US-China trade.

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It’s Just the Opening Bid

The “tariff rates” to which the God-Emperor 2.0 utilized to generate his newly-announced tariffs aren’t actually anything of the sort.

Flexport’s team was able to reverse engineer the formula the Administration used to generate the “reciprocal tariffs.” It’s quite simple, they took the trade deficit the US has with each country and divided it by our imports from that country.

This makes a lot more sense, because Switzerland doesn’t have a 61 percent tariff on anything. Which means that we’re in the realm of rhetoric here, not dialectic, and I suspect what the God-Emperor intends is for everyone to simply accept a 10-12 percent tariff rate without any reciprocating tariffs on their own imports.

I’ll admit, I’ve seldom been more wrong than seeing the initial tariffs being graduated UK-EU-CH instead of the other way around, as I was expecting. But Trump’s usual tactic is to slap his interlocutor into accepting his framework, then offering a much more palatable deal that would have looked unattainable before the metaphorical slap in the face.

Regardless, he’s doing the right thing if he wants to rebuild America’s industrial capabilities again.

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The Trump Tariffs

They’re hitting Switzerland harder than we expected, and the UK considerably less than we expected, but this will not interrupt our plans nor is it likely to change our book prices. If we have to, we can obviously increase our manufacturing in the USA, but some of the improvements in the coming payment systems should cover most of the increased costs for us. And, as with all things Trump, wait two weeks before attempting to analyze anything.

Regardless, we’re on top of it, we’re prepared for it, and we’ll deal with it in whatever way least disrupts our subscribers.

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Protecting the Automotive Industry

The God-Emperor 2.0 is slapping 25 percent tariffs on all foreign cars. It’s about two decades too late for this, as GM already went bankrupt back in 2009, but it might start turning things around for the USA’s beleaguered industrial capabilities. Regardless, it’s time to buy domestic if you need a car; hopefully they’ll start making real cars that run on gas and don’t have all that worse-than-useless computer gadgetry in them.

Donald Trump has warned the European Union and Canada they can expect to contend with ‘large scale tariffs’ if they seek to do ‘economic harm to the USA’ in an unsettling post early this morning. The US President plans to impose a 25% tariff on imported cars and light trucks starting on April 3, and earlier this month rolled out an increase in tariffs on all steel and aluminium imports from the European bloc.

This prompted the EU to retaliate with a series of duties on US industrial and agricultural products from April 1, setting the foundation of what could prove to be a damaging trade war.

Posting on his Truth Social platform this morning, Trump declared: ‘If the European Union works with Canada in order to do economic harm to the USA, large scale Tariffs, far larger than currently planned, will be placed on them both in order to protect the best friend that each of those two countries has ever had!’

The EU retarderati clearly has absolutely no understanding of its lack of power and influence. The EU can no more win a trade war with the USA than it can win a shooting war with Russia, and here its leadership is blithely proceeding to enter into both. This is, of course, because the EU “leadership” is nothing more than Clown World puppets who know nothing about either military history or economics and will simply repeat whatever rhetoric they are instructed to repeat, as many times as they are told to repeat it, no matter how obviously nonsensical it is.

Kaja Kallas, the Vice-President of the European Commission, is exemplary of the absolute ineptitude of the current EU puppet-leaders. She combines ignorance with vacuity, a complete lack of experience with accountability, and a pretty woman’s unfamiliarity with being told no. She’s the High Representative of the European Union for Foreign Affairs and Security Policy, which is supposed to be the highest diplomatic position, but she’s been acting as if she’s the prime minister of a belligerent party, which isn’t at all the same thing.

At this point, I won’t even be surprised if both the USA and Russia break ties with Europe in the coming years, just to give the poor European nations a chance to break free of their satanic would-be masters and their fake, unelected “democracy” and their self-destructive economic and immigration policies.

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Europe is the Enemy

The God-Emperor 2.0 is threatening 200 percent tariffs on alchohol imports from Europe:

President Donald Trump is threatening a massive 200 percent tariff on champagne and wine from Europe in the latest escalation of a bitter trade war.

The president lashed out at the ‘nasty’ European Union after it announced tariff hikes on American imports in retaliation for Trump’s increases on steel and aluminum.

The tit-for-tat measures have raised the stakes in Trump’s ongoing trade war, sparking fears of a recession in the United States and a shock to the global economy.

In his latest salvo Trump threatened ‘a 200% Tariff on all wines, champagnes, & alcoholic products’ after the EU raised tariffs on American goods including whiskey. Many Republican states in the U.S. produce whiskey.

Writing on Truth Social, Trump said: ‘The European Union, one of the most hostile and abusive taxing and tariffing authorities in the World, which was formed for the sole purpose of taking advantage of the United States, has just put a nasty 50% Tariff on Whisky.

‘If this Tariff is not removed immediately, the U.S. will shortly place a 200% Tariff on all wines, champagnes, & alcoholic products coming out of France and other E.U. represented countries. This will be great for the Wine and Champagne businesses in the U.S.’

Trump’s move would drastically raise the prices of European wine for Americans.

The president himself does not drink alcohol.

He’s not wrong about the EU’s protectionism, and this tariff would have a tremendous impact on European wine production, which is already suffering from a trade war between French and Spanish winemakers. I don’t see how the EU can even attempt to fight this, they’re just going to have to choose if they are content with domestic production or not.

I, for one, pledge to do my part to support Spanish and Italian winemakers. If I have to increase my wine consumption to make up for the loss of the US export market, so be it.

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Free Trade and Strategic Crisis

Big Serge has an excellent post on the history of naval warfare that happens to touch lightly on the strategic crisis facing the USA today with regards to the production of steel and the post-WWII lack of industrial capacity that has weakened the US military.

At the core of the great naval developments occurring around the turn of the 20th Century was a systematic erosion of Great Britain’s strategic position. This strategic decay was of course a multivariate process which included the emergence of new great powers like Germany, Japan, and the United States, and the evolving industrial dynamics of the world. At its heart, however, the problem was very simple: in the latter half of the 19th Century, industrial technologies began to diffuse from Great Britain to the rest of the great powers, to the effect that British supremacy in industry and critical military technologies became an open question.

A brief perusal of the relevant economic statistics betrays a clear and sustained erosion of British supremacy. In 1880, Britain still accounted for nearly a quarter of global manufacturing output and was by far the leading industrial nation of the world. By 1913, it had fallen in absolute terms well behind Germany and especially the United States, which now boasted nearly 2.5 times Britain’s output. Already by 1910, Britain (formerly the world’s premiere steelmaking nation) produced only half as much steel as Germany and barely a quarter of American steel output.

The immense economic advantages enjoyed by the United States need little enumeration. America occupies a uniquely providential economic geography, being blessed with a pair of accommodating seaboards saturated with natural harbors, an internal Mississippi waterway that is both dense and far reaching to accommodate internal trade, superb growing regions, peaceful borders, and ample deposits of virtually every mineral resource thinkable. In short, it is a country with bountiful mineral and agricultural resources, internal waterways for moving them about, harbors for exporting them abroad, and no meaningful security threats.

The German case, however, bears closer scrutiny. Whereas the United States was characterized by boundless space, free of meaningful external security threats, Germany was intensely bounded in the middle of Europe, birthed into a firestorm of potential enemies all around it. German economic might was little like the American story, characterized by the uninterrupted exploitation of a vast geographic bounty, and more the product of powerful and aggressive German institutions – both of corporations and the state.

The German population grew rapidly into the 20th Century (German birthrates were forever a point of hand wringing for the French). The German population grew from some 49 million in 1890 to 65 million by 1910 – an increase of 32%, compared to an increase of just 3% in France (from 38.3 to 39.5 million) and 20% in Britain (37.3 to 44.9 million). Simultaneously, the consolidation of an impressive educational apparatus ensured that this growing population was highly literate and productive. Around the turn of the century, many European armies still reported high levels of illiteracy among recruits. In Italy, some 33% of recruits were deemed illiterate: the corresponding figure was 22% in Austria-Hungary and 6.8% in France, but a mere 0.1% in Germany. The rapid growth of such a young and educated population benefited not just the German army, but also the burgeoning roster of German industrial enterprises like Krupp, Siemens, AEG, Bayer, and Hoechst. Such firms dominated the emerging 20th Century industries like chemicals, optics, and electrics, and the intensive adoption of agricultural modernization and chemical fertilizers made German agriculture the most productive in Europe on a per-hectare basis.

The explosion of two industrial powers who could not only compete but even outstrip Britain (and one of them right in the heart of Europe) could have no effect other than directly undermining Britain’s strategic position. Matters were made worse, however, but the proliferation of advanced naval technology around the world – in many cases directly abetted by British firms.

In 1864, British military leadership had made the fateful decision to keep artillery production in the hands of the state-owned Woolwich arsenal, despite the emergence of private industrial firms, like the Armstrong company, who were capable of making state of the art naval artillery. Cut out of British government contracts, this let manufacturers like Armstrong with no choice but to seek foreign buyers. When Armstrong built an armored cruiser – the O’Higgins – for the Chilean government, it set off serious alarm bells about the basis of British naval supremacy. The O’Higgins was fast enough to easily outrun any capital ship of the day, but her powerful 8 inch guns made her more than capable of sinking targets in the lower weight class. This suggested a distinctive use case as a commercial raider, able to evade enemy battleships while preying on merchants. Chile, of course, was hardly a rival to Great Britain, but Armstrong’s exploits did not end there. All told, Armstrong would build 84 warships for twelve different foreign governments between 1884 and 1914, and frequently supplied technical systems more advanced than those in use by the Royal Navy at the time – for example, the powerful main battery of the Russian cruiser Rurik, launched in 1890.

The prospect of fast cruisers – optimized for speed and striking power at the expense of armor – was particularly alarming to Britain owing to emerging patterns of agricultural production. The advent of efficient steamships had drastically lowered seaborne transportation costs – a fact that was of the first importance for Britain, as it allowed for the mass import of cheap grain from places like North America, Australia, and Argentina, at costs far below the levels at which British farms could compete. As a result, between 1872 and the end of the century wheat acreage in Great Britain dropped by about 50 percent, and already by the 1880’s some 65 percent of Britain’s grain was imported from overseas. The prospect of swift enemy cruisers capable of intercepting grain shipments while evading the British battle fleets now assumed a potentially existential importance, as for the first time in history London contemplated the possibility that the interdiction of its trade could bring the island to the brink of starvation.

This raised the possibility of a dangerous asymmetry: might it be possible to nullify Britain’s centuries-old naval supremacy without building competing battleships at all? French naval theorists certainly thought so, and it was proposed that France could out-lever Britain on the seas with a fleet comprised entirely of fast cruisers and torpedo boats. Such a program had the additional advantage of being very cheap, with dozens of torpedo boats available at the cost of a single armored battleship. This financial calculus was particularly important to France: after the disastrous defeat at the hands of the Prusso-Germans in 1870-71, it was natural that building out the army should be Paris’s primary concern. Therefore, a naval program that promised to outmaneuver the British without eating into funds for the army had irresistible allure. In 1881, the French allocated funds for 70 torpedo boats (halting the construction of armored battleships), and in 1886 the new Minister of Marine, Admiral Aube, launched a new building program for 100 additional torpedo boats and 14 swift cruisers designed to raid enemy shipping.

Taken together, the decay of Britain’s naval supremacy is easy to sketch out. Great Britain had become uniquely vulnerable to asymmetrical warfare at sea, owing to its growing dependence on imported grain, at the same time that technical changes in the form of the torpedo and the fast cruiser gave her enemies the potential to exploit this vulnerability. To make matters worse, the diffusion of the industrial revolution to continental Europe and the United States raised the prospect that Great Britain might no longer be able to simply out-build her enemies. In a sense, the comforting and familiar dynamic of the blockade was now reversed: instead of a powerful British battlefleet insulating the home islands from invasion and blockading enemy ports, the home islands now faced starvation at the hands of fast and cheap enemy raiding vessels armed with torpedoes and modern naval artillery.

The parallels of British decline and the subsequent US decline should be fairly obvious. As Admiral Mahan wrote in The Influence of Sea Power Upon the French Revolution, “we may profitably note that like conditions lead to like results.”

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