FT News Briefing
Swamp Notes: The costs of Trump’s tariffs
Apr 5, 2025
Ed Luce, the U.S. national editor and columnist for the Financial Times, dives into the implications of Trump's latest tariffs. He argues that these measures risk isolating the U.S. from the globalized economic system it helped establish. Luce explores the perplexing nature of these tariffs, suggesting they could lead to increased prices and inflation domestically. The conversation also highlights how these policies are reshaping international alliances and may provoke retaliatory actions from trade partners.
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Quick takeaways
- Trump's tariffs, calculated by oversimplified parameters, reflect an isolationist approach that confuses global economic relations and reduces trade reliability.
- The shift towards a 'recoupling' of nations with China highlights changing dynamics in global trade, undermining U.S. influence and economic stability.
Deep dives
Understanding Tariff Calculations
The recent tariffs introduced by President Trump have raised confusion among economists due to their questionable basis. Trump’s tariffs, varying from 10% to over 50% depending on the nation, appear to be calculated crudely by examining trade surpluses rather than utilizing a comprehensive approach. For instance, Brazil faces a minimal 10% tariff even with high trade barriers against the U.S., while the European Union, which has a significant trade surplus with the U.S., incurs a steeper 20% tariff. This oversimplified methodology reveals inconsistencies and is seen as reflective of an ‘us against the world’ stance that undermines the complexity of global trade relations.
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