“That’s not a knife…That’s a knife!” - J Paul “Crocodile” Dundee

President Trump dropped the hammer last night; now, it’s a mad scramble.

There has been a myopic focus on tariffs, with insufficient attention paid to non-tariff barriers (NTBs).  If the ‘Golden Rule’ applies to trade, it must take into account all unfair barriers to U.S. exporters.

The Rules for Fighting Back

Conflict has existed between people and nations since the dawn of time, and it will likely persist indefinitely. This is why nations spend trillions of dollars annually on military preparedness.

It's interesting, however, that there are rules governing the conduct of war.

There are also rules for prizefighting that were created in 1867 by John Graham Chambers and published with the sponsorship of John Sholto Douglas, the 9th Marquess of Queensberry, and his Amateur Athletic Club.

I bring this up because the initial reaction from globalists to Trump’s tariffs is that they are not grounded in fairness. The amounts being levied are excessive and, hence, more than reciprocal.

This is almost laughable, coming from the same individuals who have not only argued for the status quo of unfair trade relationships but also ridiculed anyone who dared to think outside the box.

President Trump and his team are trying to right the ship, which means pushing back forcefully in unanticipated and serious ways. The new measures mean nations have to make quick decisions. 

Come to the table or try to “fight” back, which does nothing for their exports. There is no way to replace the U.S. market. If these nations don’t cut deals fast, it means a recession or worse.

New Tariff Rules: Making it a Fair Fight

Reciprocal tariffs take effect on April 9^th and will be added to other existing tariffs.

The level of these tariffs is driving the apologists mad. It is worth noting that these levies do not precisely match the tariffs being charged to the U.S., even if they include non-tariff barriers.

This is where the White House is fighting to win.

The question is, how did the administration arrive at these numbers?

The rule is counter-punching, which focuses on our trade deficit with other countries.

Take the trading partner's trade deficit with the U.S. and divide it by that nation’s exports to the U. S.

• Vietnam: Exports 136.6, Imports 13.1
• Deficit = 123.5
• 123.5/136.6 = 90%

According to the head of the White House Council of Economic Advisors, Stephen Miran, all those non-tariff trade barriers and other schemes (“cheating”) can be summed up in the trade deficit.

With that in mind, the reciprocal tariffs are 50% of the trade deficit, which is why President Trump describes his counter-punch as “lenient.”

Markets were slammed on the news.

I think we will see a wave of deals by April 9th, but ultimately, the administration wants higher tariffs as official offsets to tax cuts, which I hope will be fast-tracked.

It's remarkable to see the level of outrage from a president doing exactly what he said he would do concerning trade, the border, and soon other parts of his agenda.

In fact, the approach to tariffs should come as no surprise, considering a paper Miran published last year (see below). Miran is my special guest on Making Money today.

Link to paper

Today’s Session

All morning long, the globalists have been telling Americans that they have it too good to mess around with the current system.

I heard a knucklehead say that Europe sends up wine, cheese, and Mercedes in return for paper, as if that paper doesn’t represent a lifetime of sacrifice, blood, sweat, tears, and energy to acquire.

Moreover, he ignores that the same paper will be returned to the United States to buy our buildings, farms, and other assets.

Meanwhile, the wine and cheese are gone, and the Mercedes has lost most of its resale value.

From overnight action, early key supports are:

• S&P 500: 5501
• Nasdaq Composite: 16710

Comments

When they are fearful, be greedy ! mike just on 4/3/2025 8:55:38 AM

I scanned down the list of tariffs for all the countries, and the thing that stood out to me was that we are now charging them exacting what they have been charging us all along. What's not fair about that? Would you want to play poker with someone that was dealt twice as many cards as you to pick a hand from on every game? Trump is only making the game fair! Larry Minter on 4/3/2025 11:06:01 AM

Globalist knuckleheads...FIGHT, FIGHT, FIGHT! It's the American spirit, all our fathers before us. No more fighting for paper, we fight for our God-given future! Greg T. on 4/3/2025 11:15:13 AM

Great summary from Charles on fair trade and how the US has been on the short end for too many years. One thing I don't understand is that even some good publications like the WSJ don't seem to understand that we don't have fair and free trade today and if we don't do something it will continue to worsen. Mike M on 4/3/2025 12:55:56 PM

Judge Boasberg coming with the national injunction in 3... 2... 1... ? Michael Supplee on 4/3/2025 1:04:43 PM

Here's a message for haughty Canada. "O.K. Canada, how about we stop paying you $200 Billion per year and you pay us $200 Billion a year?" Are you starting to understand fairness and the golden rule a little better now? Bill Baumner on 4/3/2025 3:31:59 PM

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