|

09 April 2025

Andrew Donaldson writes on Trump’s tariffs, and their effects

A FAMOUS GROUSE

THERE is an up side to all this gilded imbecility, which may or may not be of much consolation. But, for what it’s worth, here goes: the world’s 500 richest people lost a collective $536 billion in the first two days of stock market trading after Donald Trump’s “Liberation Day” announcement last week.

Freedom from free trade is proving a costly business; this was the biggest two-day loss of wealth ever recorded by the Bloomberg Billionaire Index.

Those whose personal wealth was drastically reduced happily include those who had poured millions into Trump’s re-election campaign. They did so, ironically, to avoid being lumbered with the raised taxes that a Democrat administration may have levied, but now … well, the fates can be so very cruel.

Top of the losing pile is Elon Musk. According to the index, he lost $31 billion last Thursday and Friday. True, the Tesla chief executive was already seeing his fortune nosedive into free-fall thanks to his controversial, high profile role in the Trump administration. This brings his total losses this year to $135 billion. He’s still the world’s richest man, worth $298 billion, but there’s no denying he’s hurting.

He has, after all, factories in China, now facing a staggering 104 per cent tariff on some exports to the US, and has since become something of a free trade advocate, directly calling for a reversal of the tariffs.  He’s also fallen out with Trump’s trade adviser, Peter Navarro, calling him a “moron” and “dumber than a sack of bricks”. The Dogebag has since apologised — but only to the bricks, though.

Also among the top losers were Mark Zuckerberg, whose wealth shrank by $27 billion when Meta stock plunged by almost 14 per cent last week as Trump’s tariffs hit the tech sector; Amazon founder and Washington Post owner Jeff Bezos whose two-day loss of $23.5 billion brings his total loss for the year to $45 billion; and long-time Trump supporter and Europe’s richest man, Bernard Arnault, who lost $11 billion on Thursday and Friday.

Of course, it’s not just Trump’s billionaire backers who’re suffering as trillions of dollars disappear from the global economy. Daily Maverick put it thus: “If you have exposure to equities through a retirement fund or other investments, Donald Trump has ‘liberated’ you from your wealth. You are probably poorer today than you were this time last week and when inflation heats up because of the rand’s collapse your savings will erode further.”

International manufacturers are in a quandary, as confusion reigns. Supply chains are in disarray. Export plans have been put on hold as anxious industry leaders try to make sense of new arbitrary trading terms. Jaguar Land Rover, for example, is pausing its shipments of UK-made cars to the US. The company is one of Britain’s biggest producers, selling some 400 000 vehicles annually. Exports to the US account for almost 25 per cent of those sales. According to the Institute for Public Policy Research, more than 25 000 direct jobs in the car manufacturing sector could be at risk as exports to the US are predicted to fall.

In the US, the backlash is growing. The threat the tariffs pose to pension plans and retirement savings has further fuelled anti-Trump sentiment. Millions of Americans in all 50 states took to the streets at the weekend to protest the tariffs ans well as the administration’s cuts to welfare, science, health, education and culture programmes and its mistreatment of immigrants.

Rolling Stone reported that, contrary to a “right-wing fantasy” promoted by Musk, these protesters were not paid to attend demonstrations by liberal billionaire George Soros, but did so of their own volition, “to defend American democracy out of an enduring sense of patriotism”. There was some irony about Musk’s claim, the magazine added, seeing as it he who has randomly doled out million dollar cheques to those who have attended his Maga rallies.

But it is not just the “loony left” or the woke who are up in arms. Leading Republicans are asking themselves how they ever got into this mess. (Answer: they voted for it.) In the Senate, a group of Republicans have come out in support of a bi-partisan bill that would require the president to notify Congress within 48 hours of issuing any new tariffs and that Congress explicitly approve any tariffs within 60 days. The bill also would allow Congress to end any tariff at any time. The Trump administration, meanwhile, is threatening to veto the bill.

The man-child himself appears unconcerned about the damage he is inflicting on the world economy and took to X to address his critics: “The United States has a chance to do something that should have been done DECADES AGO. Don’t be Weak! Don’t be Stupid! Don’t be a PANICAN (A new party based on Weak and Stupid people!). Be Strong, Courageous, and Patient, and GREATNESS will be the result!”

If “panicanism” is a movement, then it is one that sprang into being in the Rose Garden at the White House last Wednesday afternoon. It was here that Trump, “wearing so much orange make-up that you could hardly see his lips”, as one sketch writer noted, fired the opening salvo in his trade war against the world.

And why not? The world had, after all, been rather beastly to the US. “For decades, our country has been looted, pillaged, raped and plundered by nations near and far — both friend and foe alike,” he said. “Foreign cheaters have ransacked our factories. Foreign scavengers have torn apart our once beautiful American dream.”

Oh dear. As the late Christopher Hitchens had once observed, “You’re a despot if you can make your subjects feel sorry for you.”

Several commentators have observed that what followed was like an afternoon TV game show. As one wit remarked, “What tariff did your country win?”

And like any game show, the premise here was seemingly uncomplicated: “Reciprocal,” said the marmalade master of ceremonies. “That means they do it to us, and we do it to them. Very simple. Can’t get simpler than that.”

Or rather, it can’t get any more idiotic than that. The bizarre method used to calculate the tariffs has shocked the world’s leading economists. For each country, the White House looked up its trade in goods deficit for 2024, then divided that by the total value of imports. This was then halved and, presto, tariff!

Take China, for example: goods trade deficit — $291.9 billion; total goods import — $438.9 billion; after division — 67 per cent; halved for tariff — 34 per cent.

Those countries, like the UK, which didn’t have a large deficit, well, they’d just get an arbitrary ten per cent baseline, ensuring they don’t escape the tariff dragnet. Thus the farcical situation that the Australian-administered Heard Island and McDonald Islands, atolls in the Antarctic Ocean inhabited only by penguins, were hit with a ten per cent tariff.

The rest of it was just as weird. The fun began once Trump was handed a huge chart and he ran through the “contestants” in a rambling huckster delivery:

“European Union? They’re very tough. Very, very tough traders. You know, you think of the European Union, very friendly. They rip us off. It’s so sad to say, it’s so pathetic. Thirty-nine per cent. We’re going to charge them 20 per cent, so we’re charging them essentially half. Vietnam? Great negotiators, great people. They like me. I like them. The problem is they charge us 90 per cent. We’re going to charge them 46 per cent tariff.”

On and on it went. South Africa was hit with a 31 per cent tariff. “They have got some bad things going on in South Africa,” he offered. “You know, we are paying them billions of dollars, and we cut the funding because a lot of bad things are happening in South Africa.”

The big loser of the day was tiny Lesotho. One of the world’s poorest nations, it was hit with a whopping 50 per cent tariff, the highest levy on Trump’s list of targeted economies. Its top exports are diamonds (worth $539 million in 2023) and clothing (about $240 million). Exports to the US in 2024 amounted to about $237 million — mainly for those most iconic of American clothing brands, Calvin Klein and Levi’s jeans. According to a BusinessLive report, one factory outside Maseru churns out some 440 000 pairs a month. Imports from the US are negligible.

The Trump tariff could potentially wipe out nearly half the country’s exports, resulting in a death blow to its economy. It now faces a future of grinding, total poverty.

Interestingly (in a grim way), it was just last month that Trump mocked Lesotho as a country that “nobody has ever heard of”. This was in his now infamous “transgender mice” speech in which he announced sweeping cuts to international aid projects.

Struggling to pronounce the country’s name, the president said, “Eight million dollars to promote LGBTQI+ in the African nation of Lesotho, which nobody has ever heard of.”

According to an Agence France Presse report, vice president JD “Captain Eyeliner” Vance and other members of the US cabinet thought this rather hilarious. But Lesotho has one of the highest rates in the world of HIV/Aids, which the US has sought to address by providing medication and other social support, including raising awareness among sexual minorities who face stigma. Since 2006, the US has committed more than $630 million to anti-HIV/AIDS efforts in Lesotho.

Last year, the US also signed a $300 million deal to promote health and crop production in Lesotho through the Millennium Challenge Corporation, which awards US funding to developing countries that meet standards on democracy and good governance. But, given that he regards Lesotho as another of those “shithole countries” in Africa, it’s not surprising that Trump believes this is a waste of money.

Unsurprisingly, Lesotho is one of more than 70 countries who have urgently scrambled delegations to Washington and there grovel before Trump in a bid to secure some relief from all these punitive measures.

These are countries, according to Karoline Leavitt, the harpish White House press secretary, that have got “filthy rich” off the backs of American workers. “The jig is up,” she said.

Indeed, it is. If anyone’s dancing, it’s a funeral waltz. Those delegations to Washington are likely to return to wrecked economies with nothing more substantial than empty talk of “deals” and “continued good relations” with a once valued trading partner.

These will be exercises in futility. Trump has made it clear he’s sticking to his guns. Being a narcissist, what he will enjoy, though, is being the centre of attention as the world kow-tows to the Grifter King, the American idiot. Vengeance is his, at last.