Damn. I was all geared up for liberation.
Note to readers unfamiliar with my sometimes sarcastic articles: This post is dripping with heavy sarcasm.
Great Liberation Postponed
Trump proclaimed April 2 as “Liberation Day” on which he would announce specific tariffs on each of 200 countries.
I had my flags out and firecrackers ready.
And as my lead chart clearly shows, we desperately need liberation from Canada.
White House Narrows April 2 Tariffs
Alas, the Wall Street Journal says White House Narrows April 2 Tariffs
The White House is narrowing its approach to tariffs set to take effect on April 2, likely omitting a set of industry-specific tariffs while applying reciprocal levies on a targeted set of nations that account for the bulk of foreign trade with the U.S.
President Trump has declared his April 2 deadline to be “Liberation Day” for the U.S., when he will put in place so-called reciprocal tariffs that seek to equalize U.S. tariffs with the duties charged by trading partners, as well as tariffs on sectors like automobiles, pharmaceuticals and semiconductors he repeatedly said would be enacted on that day.
Those sector-specific tariffs, however, are now not likely to be announced on April 2, said an administration official, who said the White House is still planning to unveil the reciprocal tariff action on that day, though planning remains fluid.
The White House didn’t respond to requests for comment on if or when any of those tariffs are still planned to go into effect.
The focus of the reciprocal action now looks to be more targeted than originally thought, according to people with knowledge of the planning, though it will still hit countries that account for most of the U.S.’s imports.
The administration is now focusing on applying tariffs to about 15% of nations with persistent trade imbalances with the U.S.—a so-called “dirty 15,” as Treasury Secretary Scott Bessent put it last week.
Though it will hit most imports coming into the U.S., the administration’s “dirty 15” approach is still a narrower one than many observers anticipated when Trump ordered federal agencies to design reciprocal tariffs in February, directing them to evaluate trading relationships with virtually every U.S. trading partner. The White House had previously considered grouping trading partners into three tiers of high, medium and low tariffs, but turned away from that plan in recent weeks in favor of giving each targeted nation an individualized tariff number.
Trump told oil executives last week during a meeting at the White House that he didn’t want to grant exceptions on tariffs, according to a person who attended the meeting, but said he would consider occasional ones.
When one attendee asked about steel and aluminum exemptions, Trump wouldn’t commit to any, this person said. When U.S. Trade Representative Jamieson Greer spoke to the oil executives, he said he wasn’t interested in doing exemptions because they felt like they granted too many in the first Trump administration. Commerce Secretary Howard Lutnick also told the oil-industry executives that he didn’t expect exemptions, the attendee said.
Trump previously gave automakers a temporary reprieve from tariffs on Canada and Mexico, before pausing those levies more broadly for all products that comply with the USMCA trade agreement. But on Friday, he lamented that people had criticized him for backing down, and hinted that his approach to tariffs could shift in the coming days and weeks.
Once you give exemptions for one company, “you have to do that for all,” Trump said, adding that “the word flexibility is an important word. Sometimes there’s flexibility, there’ll be flexibility.”
Key Word Flexibility
Proving beyond a shadow of a doubt how flexible he is, no one knows month-to-month, week-to-week, day-to-day, or even hour-to-hour what Trump will do.
Tariffs on Canada, Mexico, Autos, Oil, and China have all been on-and-off, and scaled up and down depending primarily on what mood Trump is in.
Trump is even flexible on being flexible as this important quote shows. “Sometimes there’s flexibility, there’ll be flexibility.”
We have gone from tariff tiers to tariffs for all 200 countries the US trades with, flexible of course, maybe.
Spotlight Canada
Looking at all this data, I just don’t know how Canada can treat us this poorly.
My gosh, oil imports alone were about $103 billion. Factoring out oil the US actually had a trade surplus with Canada of $39 billion. Wait, what?
Yes, that’s correct. But who needs Canadian oil anyway?
Trump Claims “We Have All the Oil We Need”
On February 2, I noted Trump Claims “We Have All the Oil We Need” True or False?
Well if, Trump says it true then it must be. Nonetheless, I did a fact check on the idea.
It turns out US refiners can’t handle the quality of oil we have and need imports to get by. See link for details.
But Trump has the solution.
Should the US Import Oil from Venezuela Instead of Canada?
On March 22, I asked Should the US Import Oil from Venezuela Instead of Canada?
The answer to this question is seemingly obvious, but ….
But “Trump Considers Extending Chevron License to Pump Oil in Venezuela”
This makes perfect sense because Venezuela is a much better neighbor than Canada.
The “Beauty” of the Plan
If we let Venezuela supply US oil needs, but nobody else, then we can reduce our trade deficit with Canada.
Of course, our trade deficit would rise with Venezuela.
And we would have to ship the oil here instead of using pipelines already in place in Canada.
Q: Since a total halt of Canadian oil would eliminate the US trade deficit with Canada, could we eliminate tariffs on Canada?
A: Don’t be silly. To do that Canada needs to become the 51st state.
Clear Explanations
The Harmonized Tariff Schedule of the U.S., which details individual rates on particular commodities, has about 13,000 line items. The U.S. trades with roughly 200 countries. For those doing the math, that’s a 2,600,000 matrix.
How can that possibly not be great?
For discussion, please see A Clear Explanation of How Reciprocal Tariffs Will Work
Q: What do we call this?
A: Winning, silly. Anything and everything done by Trump is winning by definition.
How Much Will Lumber Tariffs Increase the Price of a Home?
In case you missed it, please consider How Much Will Lumber Tariffs Increase the Price of a Home?
Lumber tariffs are already close to 15 percent. Trump will tack on another 25 percent.
Drats! Complete Liberation Postponed
I was ready with firecrackers and blowhorns. I even have a Canadian flag to burn as part of my great liberation personal ceremony plan.
But it’s important to be flexible, even on flexibility itself, so that no one can count on anything, ever.
Everyone knows, the market loves uncertainty. And this is why not knowing if Trump will honor any deal he signs is such a great thing.
Trust is so overrated.
By the way, Cheese Was a “Key Achievement” of Trump’s USMCA Trade Agreement
Trump is complaining about Canada’s cheese tariffs. In 2018, he was bragging about cheese. [Seriously, many times]
There’s no sarcasm in this sentence: Apologies to Canada.