Injecting the Economy With Bleach¹

As I write this, Wall Street stock indexes have dropped to levels they haven’t hit since the COVID days of 2020. This is in response to Trump’s Rose Garden chat April 2 where he introduced his so-called “reciprocal” tariffs on more than 180 countries. Although only Congress can set taxes, Trade Promotion Authority laws originally enacted in 1974 acknowledge the role of the executive branch in actually negotiating trade agreements. Trump imposed the tariffs without Congress’ participation by invoking the 1977 International Emergency Powers Act (IEEPA).

In his first administration Trump used the IEEPA to threaten to impose a tariff between 5 and 25 percent on Mexico if they did not take action regarding the so-called “illegal immigration crisis.” A month later he withdrew the threat after Mexico agreed to crack down on immigration from Central America. IEEPA was used by President Barack Obama to impose sanctions on foreign-based hackers targeting the US, and by President George W. Bush to block assets of terrorists who were foreign nationals. In January 2025 the NY Times reported presidents had invoked the IEEPA a total of sixty-nine times, thirty-nine of which were still in effect.

Trump’s use of the IEEPA to institute tariffs is likely to face challenges in court, however, as no previous president has used it for that purpose. Presidents have instead imposed tariffs in a national security context using Section 232 of the 1962 Trade Expansion Act. Presidential actions under Section 232 are predicated on an investigation by the Secretary of Commerce into the national security impact of a specific import. The investigation can take 270 days and the president has 90 days to respond, after which they can take a range of actions or no action. Actions could include tariffs or quotas. A recent Congressional Research Service report raises some questions concerning Trump’s use of the IEEPA for tariffs without Congress’ participation, including the suggestion that the law’s intended purpose is to facilitate the president enacting the will of Congress.

Some of the data on the chart of tariffs by countries does not initially appear particularly exceptional. The European Union is saddled with a 20% rate, while China receives a 34% rate, and Japan 24%. On the surface, nothing especially remarkable other than the rates are high. However, Vietnam is hit with a 46% rate, the Falkland Islands with 42%, and the small entities of Lesotho in Africa, and the French territory of St. Pierre and Miquelon are assigned the highest overall tariff, 50%. A default tariff rate of 10% was imposed even on entities that do not trade with the US, with results that might be laughable in another context including the now well-publicized 10% on Heard and McDonald Islands, which are populated entirely by penguins, and 10% on “British Indian Ocean Territory,” where nearly all the humans are US military personnel on the Diego Garcia base. Also, the White House and the US Trade Representative published different tariff values for some countries, leading Switzerland, for one, not clear on what was expected from them.

An initial hypothesis as to why the list of countries included territories and entities that do not trade with the US, was that it had been constructed by a reverse lookup of top level Internet domains (Heard and McDonald Islands: .hm, British Indian Ocean Territory: .io, etc.). Further research concluded that the tariff country list is just based on the ISO 3166-1 standard country names, which is also the source of the two-letter top level Internet domains.

Trump’s visual aid for his Rose Garden chat showed two columns of numbers next to each country/territory: one labeled “Tariffs Charged to the U.S.A.,” and one “U.S.A Discounted Reciprocal Tariffs.” Observers noted immediately that the numbers did not make sense as tariffs are usually understood. Vietnam, for instance, was displayed with “Tariffs Charged to the U.S.A” 90%. This seems intuitively wrong, and in fact is way off base, as the government’s own data shows US exports to Vietnam face average tariffs of approximately 15%.

Journalist James Surowiecki worked out that, rather than use actual existing tariff and trade data,  the administration had simply taken half of the US trade deficit with a country divided by its exports to the US. He used the example of our $17.9 billion trade deficit with Indonesia, which exports $28 billion to us. 17.9/28 =  .639 or roughly 64%, which, divided by 2, yields the 32% shown on the chart.

The White House dressed up the basic formula (trade deficit / imports) with additional Greek letter variables multiplied in the denominator (eta and phi). However they were predefined as reciprocals (4 and .25), yielding 1 when multiplied hence no effect on the result.

Techdirt’s Mike Masnick compares this to “calculating your coffee shop’s markup by dividing how much coffee you buy from them by how much coffee they buy from you.” Since few of us sell coffee to our coffee shops, and since dividing by zero is commonly not defined, Masnick’s analogy illustrates the calculation’s potentially nonsensical quality. Alternatively, in some number systems dividing by zero yields a positive or negative infinity. In this case the coffee shop’s markup would be considered infinite – also probably not a useful value on which to base policy.

Yahoo Tech found that asking a Large Language Model (LLM) such as ChatGPT to “calculate U.S. tariffs on other countries in an ‘easy way,’” yields a result similar to the formula the White House used.

Masnick uses the following hypothetical scenario to describe Trump’s fundamental mischaracterization of tariffs:

Imagine you want to buy a toy at a store which costs $50. You pay for the toy and walk away with it. The President looks at that transaction and says ‘wait, you paid the store $50 and the store paid you nothing, therefore the store is stealing from you. To “fix” this, I’m going to tax the store $25. From now on that same toy costs $75.

A fifth grader who Masnick regaled with his story recognized the illogic immediately, objecting that if he paid for and received something from the store, the store was not stealing. “And taxing the store seems stupid,” the youngster added.”[T]hen everything is more expensive. Why would anyone do that? That can’t be how it works.”

Speaking recently to Public Notice’s Thor Benson, UC Davis historian Eric Rauchway put the Trump tariffs in context. The McKinley era, which Trump seems to revere without any clear basis, was a time of “broad social protests.” “Many of the protesters thought tariffs were the cause of ... misery,” Rauchway said. “A tariff is a regressive tax,” he continued. “It hurts people more the less money they have.” To counter the regressive effect, a key objective of progressives at the time was to bring back income tax. An income tax had been in place during the Civil War and the Lincoln administration, but the Supreme Court ruled it unconstitutional. It was eventually restored by the 16th Amendment in 1913. “That allowed the federal government to fund itself with income taxes rather than tariffs,” Rauchway said. “That relieved a lot of people’s sense of unfairness toward the federal government.”

Rauchway also opined that Trump seems not to understand the difference between “a tariff for revenue and a tariff for protection.”

If you set a tariff at three percent, you collect three percent on all of your imports. That’s great. If you set a tariff at 300 percent, then nobody buys imports, so there’s no revenue collection. The president seems to believe he can impose prohibitively high tariffs and collect revenue, which you can’t do.

In a recent social media post Sen. Chris Murphy (D-CT) suggested that trying to understand the tariffs as economic policy is “dangerously naive.” The tariffs are “[a] means to compel loyalty from every business that will need to petition Trump for relief.” The founders limited and checked the President’s powers, Murphy wrote, because they had observed “how kings and despots used spending and taxes to control their subjects.” Trump wants to use spending and taxation like King George did in 18th century, to reward loyalty and punish dissent. “He is using access to government to bully universities, law firms and state and local governments into loyalty pledges.”

Murphy concludes:

The tariffs aren’t economic policy. They are political weapons.

But as long as we see this clearly, we can stop him. Public mobilization is working. Today, a few Republicans joined Democrats to vote against one set of tariffs.

The people have the power.

Acknowledging Murphy’s analysis, American Prospect’s David Dayen has a simpler version. He denies that Trump’s actions are in fact any kind of policy. A policy, he argues, would consider whether a potentially tariffed item could be produced in the US, whether other government policies created an incentive to do so, etc. Dayen notes that even in the McKinely era, tariffs were cut on one of the biggest revenue producers: sugar. But Trump’s actions are something else, Dayen suggests. “What Trump is doing is a sanction policy,” Dayen says, “only he’s doing it against the whole world at once for the assumed harm of ‘ripping off’ the United States for decades.” Decrying the extent to which sanctions have become part of US geopolitical strategy, Dayen goes on to compare Trump’s policy to “a mob boss moving into town and sending his thugs to every business on Main Street, roughing up the proprietors and asking for protection money so they don’t get pushed out of business.” “It’s a mentality fit for someone repeatedly linked to organized crime,” he observes.

Historian and journalist Josh Marshall goes further. In Marshall’s view MAGA and Trump do not understand the limitations of American power. Their simplistic framing of history and current events does not acknowledge the extent to which the US role in international affairs is usually less “acting in charge” and more “consulting and asking.” To small MAGA minds this looks weak and “leads everyone to take advantage of us….” Marshall calls the US “custodian of a global system that on balance works quite well, at least for the other advanced economies of the world.” “The US is first among equals more than a dominating power.” Moreover, Marshall writes, Trump does not understand the dollar’s role as global reserve currency, or the extent to which that makes trade deficits both “in some ways inevitable and also sustainable. Nor does he understand the advantages that role provides to the US, including “being able to borrow and borrow and have it mostly not matter.”

Trump’s notion of the deal, Marshall reminds us, is binary. Unlike the common structure of a commercial deal where a product manufacturer purchase parts from a supplier, with the result that when the product sells both companies profit, in Trump-land when there’s a winner there’s a loser. Marshall uses a used-car model, where if I sell you my car for more than it’s worth I win and you lose.

The only way for me to win in fact is for you to lose. I only know I won when I can see that you lost. This kind of deal only works if it’s a one-off. I don’t care if you’re mad. I don’t need to sell you another car.

And Trump’s career is “heavily based” on the latter kind of deal, which “is only possible with some degree of razzmatazz, coercion or deceit,” Marshall reminds us. This, he says, is what the tariffs represent. “Trump is pulling on the economic powers of the world to bum rush them into a newly subservient global trading regime. But really there is no plan.”

This is the most consistent pattern of the Trump era, the quest to divine some underlying plan or theory when all it really is is a degenerate huckster following his gut.

Speaking to The New Republic’s Greg Sargent, congressional scholar Norm Ornstein compared Trump’s public attitude toward the tariffs to his initial response minimizing the potential impact of COVID. Warning that we could be in for the economic equivalent of the 400,000 unnecessary COVID deaths caused by the Trump administration’s action and inaction, Ornstein called on Republicans to “basically just stand up and scream at him, saying, You cannot do this anymore.” Ornstein pointed to the elections held this week, focusing particularly on two districts in Florida where Republicans have typically won by a 30 percent margin, but this time managed only 15 percent. “... [T]hat had to leave every House Republican who won by 15 percent or less quite nervous…,” Ornstein said. “They see the direction that things are going. So you’ve got pressure points with some of these Republicans.”

Referring to the bill to roll back tariffs on Canada, mentioned in the quote above from Senator Murphy, which passed the Senate on April 2 with four Republicans voting with Democrats, Ornstein suggested a so-called “discharge petition” would be needed for it to pass the House. (In a discharge petition a majority of the House signs a petition to bring a measure to an up-or-down floor vote.) In addition to the Canada measure Ornstein urged Democrats to put forward a broader one “to block all of these outrageous tariffs and save the economy—and get Republicans on the record about whether they’re for it or against it.”

In Ornstein’s view “[m]ost Republicans in Congress know that this is not just folly; it’s dangerous, destructive, and horrifying folly that could lead to a global depression.” But he was pessimistic about a broader measure passing unless secret ballots are permitted, because “Senate Republicans are weak when it comes to defying Donald Trump.” Even if such measures were passed, Trump could still veto them, which would then require a two-thirds vote of each house to overturn – something Ornstein admits is unlikely. Sargent concurred, but urged Democrats to proceed anyway so as to, at a minimum, create a clear message that “Republicans and Trump are making your prices higher … to fund more tax cuts for the super rich.”

Meanwhile, in the “strange bedfellows” department, on April 3 the New Civil Liberties Alliance, identified by Sourcewatch as a “right-wing litigation group,” filed suit in Federal court in Florida, charging that Trump’s broad tariffs exceeded his presidential authority. Apparently even the Koch Brothers are alarmed.

¹ Salon.com's Amanda Marcotte has drawn the connection between Trump's suggestion that injecting bleach might cure COVID and his current tariff fantasies. On social media site Bluesky she wrote "He's incredibly stupid but insists he's the smartest man who ever lived. That conflict creates a rolling narcisstic injury that predicts his behavior."