Today we talk about the tragedy of errors or perhaps it is a comedy of errors being unloaded at a port near you. The first ships that are being charged full tariff have arrived in America. The prices aren’t being paid by China. They are being paid by American companies that will be faced with the decision to pass those increases on to their customers. In some of the Chinese goods the increase is 145%. Inflation peaked under Joe Biden at 9.2%. The tariff on the entire world is 10% after the tariff rollback.
The ship had already begun loading goods bound for the US prior to Trump’s April 2 tariff announcement. When the ship reached California, it carried cargo with a total estimated value of at least $564 million, according to detailed bills of lading data from IHS Markit. About 40% of the goods were likely subject to the new 145% rate, according to Bloomberg News estimates. The data suggests importing companies face at least $417 million in new tariffs for all goods on the ship. That’s on top of preexisting import fees.
“It’s definitely affecting business,” said Tino Muratore, general manager of Worldlawn Power Equipment in Beatrice, Neb., which had lawnmowers and parts on the ship. “We don’t know if this is permanent [or] temporary… so we’re all in kind of a fog, if you will, and exploring other options.”
The cargo on board the Violet represents a microcosm of consumer goods and industrial supplies: fish, sneakers, forklifts, latex medical gloves, car windshields, pasta, wheelchairs and bras.”
My god. While little girls are forced to have two dolls to play with instead of thirty, big girls will be forced to do with two bras instead of 30. That means 28 days of the month there will be no bras. Trump is making America Great again. I don’t know how the old pumpkin son of a bitch did it, but he did. He is as wily as an Acme sponsored coyote. Trump actually said that about playing with dolls. This from Guy Chazan at the FT, “When Donald Trump announced this week that American children will have to make do with fewer toys at Christmas, unflattering comparisons were drawn to noted figures from history.
“It sounded like Marie Antoinette saying ‘let them eat cake’,” said Whit Ayres, a Republican pollster.
Economists and businessmen have been warning for weeks that the president’s 145 per cent tariff on China will raise prices for ordinary Americans. The White House has consistently pushed back on that narrative.
But on Wednesday the mask slipped. Trump said China had made a “trillion dollars . . . selling us stuff, [and] much of it we don’t need”.
He said people had been warning of empty shelves and “maybe the children will have two dolls instead of 30 dolls . . . and maybe the two dolls will cost a couple of bucks more than they would normally”. But “we have to make a fair deal”, he added…Trump’s enemies could hardly believe their luck. They mocked him on social media as a modern-day “Grinch who stole Christmas” and “Scrooge McTrump”. One television presenter, channelling the Sopranos, called him “Donny 2 Dolls”.
“‘Your family will have less, but it’ll be more expensive’ is definitely a solid economic pitch,” the stand-up comic Mike Drucker wrote on X.
Trump is not the first president to demand sacrifices of the American people. After the attack on Pearl Harbor and the US’s entry into the second world war, Franklin D Roosevelt called for a program of “self-denial”, with higher taxes and the rationing of goods.”
Jimmy Carter once said about household energy costs to put on a sweater. That is an apt comparison for the economic policies of this president, because as we are about to see, we are just getting started. Small business owners are about to get taken behind the woodshed. We saw how much the GM of Worldlawn Power Equipment in Beatrice, Nebraska was having to pay for his lawnmowers. How difficult will it be to sell a lawnmower at 145% markup? Let’s go back to Bloomberg’s article and see what else was on the Violet? Knitted apparel worth $117M and now it will cost $250M with $137 M in tariffs added to that. $230,000 worth of work gloves were going to Kansas City. Big Joe Forklift out of Nebraska paid an extra $109,000 because $95,000 of its pickers and warehouse equipment was loaded onto the ship two days after the maximum rate took effect. Toys and Sports equipment worth $18M had $11M in new tariffs added to them including $323,000 in basketballs heading toward Cincinnati now got $469,000 in new tariffs added to them. How about fish and seafood? “Michael Kotok, president of Arctic Fisheries, a seafood distributor based in Buffalo, N.Y., had 103,000 pounds of frozen cod on the Violet. “Our margin is slim,” said Kotok. “We have to pass that cost along. While Kotok said he intends to pass the tariff costs onto his customers, existing fixed-price contracts limit his ability to do so.
“In the administration’s attempt to put the screws to other nations, they put the vise on American businesses,” Kotok said, “many of whom will not survive.”
That is a business owner speaking. That is someone who paid the tariff. One that will have to pass on the costs to stay in business. Why would anyone think that these businesses are going to pay all of the tariffs? Why would anyone think that China was going to pay any of the tariffs? The people that will be paying the tariffs are the cod buyers, the basketball owners, and anyone in desperate need of a lawnmower.
So, what will happen? Well, this is the first 10 minutes of Econ 101, prices will rise, and people will buy less. Do you expect people to rush down to the lawnmower store and bait shop and buy a new lawnmower cause the price is 145% higher? Did you fall off a radish truck?
Of course not. What’s going to happen is that there will be suppliers buying one heck of a lot less lawnmowers, basketballs, and forklifts. What happens when that happens? Businesses don’t just wake up in the morning and go buy stuff, they plan meticulously when making business survival decisions, so they won’t be able to order more. They can’t pay to have lawnmowers sit with price stickers at 145% higher than normal; people aren’t going to buy them. So, they order less, wait. Those businesses are already ahead of you and me. The next batch of chips to leave after the tariffs were fully enforceable are going to arrive on America’s shores with about 60% less cargo. Empty or no stops at all.
Remember when we had supply chain issues during Covid? How did that work out for the small businesses? Did they prosper or suffer? When a case of dolls does get shipped across the ocean, is Walmart going to get them or the small doll shop? More from Chazan” Trump’s comments are part of a flurry of statements from the White House belittling the trade with China. “The American dream is not contingent on cheap baubles from China,” Scott Bessent, Treasury secretary, said in March. “We are focused on affordability, but it’s mortgages, it’s cars, it’s real wage gains.” Such comments have horrified toymakers. “I’ve been attacked by my own government,” said Rick Woldenberg, chief executive of Learning Resources, an Illinois-based company that makes toys and educational products and has been manufacturing in China for four decades.
“To denigrate what we’re doing and say these things are trivial and unimportant and people should make do without them — it’s just demeaning,” he added. “We don’t think we’re just creating heaps of plastic for people.”
Big names in the industry have seen big stock market declines. The share price of Mattel, maker of Barbie dolls, has fallen 18 per cent since “liberation day” in April, when Trump unveiled his reciprocal tariffs. Isaac Larian, chief executive of MGA Entertainment, the largest toymaker in the US, said the tariffs will be “disastrous”, predicting a “30-40 per cent drop in sales.”
Let them eat cake, our first billionaire president sounding very much like the king he thinks he is. Kings get to choose which industries win and lose. Our government is supposed to, not by loopholes in executive orders, but by legislative policy. But with Congress not doing their job for decades, we have a willing king for a day or 4 more years in Trump. Policy, we do not have.
Here is what is coming next. This is coming from Kit Norton at investors.com, “President Donald Trump’s trade war policies are expected to bring about a 35% decline in cargo arriving at the Port of Los Angeles by next week as “essentially all shipments out of China for major retailers and manufacturers have ceased,” according to Port of Los Angeles Executive Director Gene Seroka. The Los Angeles Port head added on Thursday that U.S. exporters are also getting “hit hard” by retaliatory tariffs amid Trump’s trade war. Seroka said the sectors include agriculture, heavy-duty manufacturing and information technology services.
“U.S. ag exporters are having an especially challenging time, so much so that in March, China bought more soybeans from Brazil in one month than ever in their history,” Seroka said. The warnings from Seroka come amid continued back and forth over tariffs and possible deals between the U.S. and China. The uncertainty has led to a decrease in shipping volumes from China to North America, with cancellations currently at 50%, according to global logistics firm Flexport.”
Businesses are flat out cancelling orders. They know they can’t pass these costs on to consumers and they don’t want to eat the cost, much less cake. How is Trump country going to react if the farmers don’t get a bailout? What if they get the lawnmower treatment or the toy manufacturer treatment? In addition to less dolls, we can’t bail you farmers out, but thanks for voting for me and falling hook line and sinker for the shyster out of New York conning you into believing he is a conservative and shares your values. Soybean prices are down 40% in the last three years, are grocery prices down that much? I know wheat has lost over 50% of its value and corn also over 35% of its value. What part of flyover country is becoming great when our export markets are getting closed off? The one good export we have is food and we are screwing that up, and that doesn’t help the trade deficits now do they? But if business is bad for small businesses and farmers, let’s juxtapose that with the King himself, not Ray Zalinsky, the auto parts king, but the Donald himself.
How has business been going for Donald? Business has been good. This from Josh Meyer at USA Today, “On his second day in office, President Donald Trump was asked if he would continue selling products that benefited him personally, after sales of a new Trump “meme coin” had soared to as much as $20 billion in value.
“I don’t know much about it, other than I launched it. I heard it was very successful,” Trump replied. “I haven’t checked it. Where is it today?”
“You made a lot of money, sir,” a reporter replied. “Several billion dollars, it seems like, in the last several days.”
“Several billion? That’s peanuts for these guys,” Trump said gesturing toward a group of tech billionaires at the White House event…Last week, another of the Trump family’s crypto ventures, World Liberty Financial, announced that one of its digital coins is being used by an Abu Dhabi investment firm for a $2 billion investment in cryptocurrency exchange Binance. Democratic lawmakers and crypto analysts said the deal was a conflict of interest that could earn World Liberty at least $27 million per year…Last month, amid White House Correspondents’ Dinner festivities, Donald Trump Jr. co-hosted a launch party for his “The Executive Branch,” a private club costing more than $500,000 to join.”
Politico, quoting people familiar with the venture, said its goal was to “cater to the business and tech moguls who are looking to nurture their relationships with the Trump administration.”
Perhaps the farmers can all get together and send one person to the Executive Branch to hang out with the tech moguls and other billionaires which at this point is the President. It sure is fun seeing lifelong liberals all have a place to hang out and discuss how much they money they are making while the government is printing trillions of dollars, the average person is losing purchasing power, and no one seems to be the wiser. I’d personally change the name to Lifelong Liberals Liquors and Lies.
But if his personal business is going good, his professional job is not. This from Pepe Escobar at ZeroHedge, “So, predictably, Captain Chaos did blink first. As much as he – and his sprawling media circus – could not possibly admit it. It all started with “tariff exemptions” – from smartphones and computers to auto parts – on products imported from China. Then it veered towards carefully manicured leaks implying tariffs “could” be reduced to a range between 50% and 65%. And finally a terse admission that if there’s no deal, a “tariff number” will be unilaterally set.
China’s Ministry of Commerce was unforgiving: “Trying to trade away others’ interests for temporary gains is like bargaining with a tiger for its skin – it will only backfire”. And it got fiercer. The Ministry was adamant that any Trump 2.0 claims of any progress on bilateral negotiations have “no factual basis” – de facto depicting the US President as a purveyor of fake news. Tigers, tigers burning bright: the image does not recall poetry superstar William Blake, but Mao’s legendary depiction of the US Empire as a “paper tiger” – a flashback that struck me over and over again last week in Shanghai. If the US Empire was a paper tiger already in the 1960s, the Chinese argue, imagine now.
And the pain will increase, not only for the paper tiger: any dodgy deals made by foreign – vassal – pussycat governments at the expense of Chinese interests simply will be not be tolerated by Beijing…
Last week in Shanghai I was reminded over and over again – by academics and business people – that the weaponized Trump Tariff Tizzy (TTT) goes way beyond China: it is a desperate offense ordered by the US ruling classes against a peer competitor that scares the hell out of them.
The best Chinese analytical minds know exactly what’s going on in Washington. Take for instance this essay originally published by the influential Cultural Horizon magazine breaking down the “triangular power structure” of Trump 2.0.
We have all-power Trump forming a “super-establishment”; Silicon Valley money politics, represented by Elon Musk; and the new right-wing elite represented by VP J.D. Vance. End result: a “governance system that is almost parallel to the federal government… In a nutshell: Captain Chaos definitely does not have the cards – which as even South Pacific penguins know, are all made in China.”
Made in China, it got me thinking back to a podcast I listened to a few months back. I went back and found it and relistened to the part in question. Peter Schiff spoke about just how dangerous it would be to get into a trade war with the world. He was mocking Trump saying that foreigners would have to say goodbye to America if they didn’t agree to his terms. These numbers give some context on how dependent we are on imports. This from his podcast on December 1, 2024- He lists what we don’t make anymore- consumer electronics 90-95% imported, 70-80% of our furniture, 95% of the toys, 85% of toys come from China alone, footwear is 99% imported, bicycles are 99% imported, auto parts are 70% imported, sporting equipment 80-90%, jewelry and watches 80-90%, pharmaceuticals 70-80%, hand and power tools 70-80%, luxury goods 90%, batteries 90%, office supplies 80%, plastics 65-75%, kitchen and tableware 80-90%, stationary and art supplies 80%, camping gear 85-90%, musical instruments 75-85%, pet products 70-80%, cosmetics 60-70%, small vehicles (scooters, snowmobiles etc.)- 85-90%, home improvement goods 60-70%, building materials 50-70%, household appliances 50-60%, medical equipment 70%, coffee 100% imported, and 85% of our seafood is imported. We are dependent on other countries and the ships aren’t coming in with goods anymore. Schiff was making the point that the world is making the stuff, and we are sending back printed money that is based on our debt financing which they are buying from us. They get paper, we get goods. Which is more valuable? Perhaps we send Trump coin? Then Ivanka can get three dolls for Christmas this year, but sadly we may be all out of bras.
Sincerely Yours,
C Thomas Printer
Also born on this date… the Montanan, Gary Cooper.
Thank you for listening today and you can find all of our articles and more on our website cthomasprinter.com.