Ivo Vegter: Even penguins aren’t safe – Trump’s clown-show tariff war begins - Biznews

Ivo Vegter

Tomorrow, Trump’s promised global tariffs on everyone take effect. Even penguins on uninhabited islands are in his cross-hairs.

On 2 April 2025, a day he called “Liberation Day” with Orwellian flair, US President, Donald Trump, announced the imposition of a minimum of 10% “reciprocal tariffs” on imports from all countries, except for a very short list that includes Russia.

American importers will be saddled with a 30% tariff on all imports from South Africa, with the exception of goods already covered under other tariff orders, such as motor vehicles, steel and aluminium.

These tariffs will go into effect tomorrow, 5 April 2025.

I’m not going to repeat the explanation of how idiotic trade tariffs are, both in principle, and in the particular case of the United States. I’ve done so on more occasions than I care to count.

(And in answer to a recent comment that mocked the notion that little ol’ me knows better than “Trump, his entire cabinet and the raft of advisers available to him,” why, yes, I do. As I’ll explain further, he’s a moron, and he employs obsequious fools.)

On the validity of the pro-tariff argument, I’ll just leave this well-sourced rebuttal to an op-ed in the Wall Street Journal that defended Trump’s tariff war.

As for the impact, markets around the world, including in South Africa, are crashing as I write this, and the US dollar is tanking.

Unpopulated islands
Among the victims of this idiotic trade war are thousands of penguins who call the remote Heard and McDonald Islands their home. These islands, consisting of two ice-covered volcanoes connected by a narrow isthmus, lie in the Southern Ocean, roughly halfway between Madagascar and Australia, but closer to Antarctica than either of those. It is included on the list of countries and territories against which US import tariffs are to be raised, though its human population is zero.

That’ll teach them to sell their shit to Americans! (I kid. The US no longer relies much on guano, and instead imports the vast majority of its fertiliser from Canada. Farmers on both sides of the border are already suffering steep price increases thanks to Trump’s tariffs.)

What the penguins of remote Southern Ocean islands have ever done to Trump to provoke his ire, we’ll probably never know. Perhaps he is intimidated by their superior grasp of basic economics.

Tiny territories
It is unclear where Trump’s flunkies got their list of countries and territories. It includes the European Union (which gets a 20% tariff) and doesn’t list its 27 members individually. Even so, the list contains 185 names, while the United Nations recognises only 193 countries, plus Palestine and Vatican City (both of which escaped tariffs).

The US list excludes countries against which sanctions, trade embargoes or tariffs are already in place, such as Mexico, Canada, Cuba, North Korea, Russia, and Belarus (but not China, which gets an additional 34% slapped on all its exports).

Trump’s list includes a number of tiny territories that formally fall under larger nations, such as the aforementioned Heard and McDonald Islands (Australia). Other small Australian territories targeted are the Cocos (Keeling) Islands (population 593), Christmas Island (pop. 1,692), and Norfolk Island (pop. 2,188). Tokelau, which falls under New Zealand and has a population of 1,647, is included, but Niue (pop. 1,681) is not. The Falkland Islands, which is a British territory with 3,662 people, is on the list, as are Montserrat (pop. 4,386) and St. Helena (pop. 4,439), but Ascension and Tristan da Cunha are not. Saint Pierre and Miquelon (France, pop. 5,819) are on the list, but Saint Barthélemy (also France, pop. 10,562) is not.

If you think the list of targets is confusing, wait until you find out how Trump’s minions calculated the appropriate “reciprocal tariff”.

Reciprocal tariffs
If you think it’s based on the tariff that each country charges, on average, for American imports, you’d be wrong. After all, it isn’t true that South Africa charges, on average, 30% import tariffs on US goods and services. Nor does it charge 60%, as the Trump administration actually claims. European Union countries don’t charge 20%, which the US is now charging for European imports, nor does it charge 40%, as the US claims. Lesotho charges neither 99%, nor the 50% its exports will now attract. Taiwan levies neither 64%, nor the 32% the US is raising as a “reciprocal tariff”.

So, if the tariffs are not “reciprocal” to the import tariffs charged on American goods by target countries, what are they reciprocal to?

Veteran financial journalist James Surowiecki claims to have an answer: “Just figured out where these fake tariff rates come from. They didn’t actually calculate tariff rates + non-tariff barriers, as they say they did. Instead, for every country, they just took our trade deficit with that country and divided it by the country’s exports to us.”

He explains: “So we have a $17.9 billion trade deficit with Indonesia. Its exports to us are $28 billion. $17.9/$28 = 64%, which Trump claims is the tariff rate Indonesia charges us. What extraordinary nonsense this is.”

Surowiecki is the author of The Wisdom of Crowds, so it’s only appropriate that the crowd backed him up by running the numbers on numerous other countries. In all cases, the tariff the US levied is half of the ratio between the US trade deficit with, and US imports from, the country in question.

Trump and Oprah
If you read Trump’s memorandum, it is clear that it isn’t actually about tariff and non-trade barriers at all, but about trade deficits, which Trump views as unfair.

I’ve explained before why trade deficits aren’t a bad thing at all.

If the US imports more from, say, South Africa than South Africa imports from the US, that doesn’t mean South Africa is taking the US for a ride, as Trump imagines. Yes, more money flows from the US to SA than vice versa, but that is only one half of the picture, in any case. In return for that money, more goods (and services) flow the other way, and the American buyers of those goods value them higher than what they paid for them.

Even if South Africa imported nothing at all from the US, the US wouldn’t be losing anything by importing stuff from SA.

In fact, only poor countries with weak economies are forced to export goods to earn currency to pay for their imports. Rich, productive countries, like the US, don’t have to do that. They can pay for imports from the money they generate themselves, using their own currency, because US trading partners are quite willing to accept US dollars in payment.

If anything, being able to sustain a trade deficit is a signal of economic strength and prosperity, not weakness.

This is the elementary misunderstanding under which Trump labours. Any first-year economics student could set him right about this, but Trump has believed this nonsense for decades.

He explained exactly this crackpot theory to Oprah Winfrey way back in 1988. Winfrey, herself not a noted economist, thought he sounded quite presidential. That he actually became president, twice, while continuing to believe this rubbish, is an indictment of the US political establishment.

People who don’t understand basic economics shouldn’t be in charge of major economies. In fact, classical liberals correctly believe that this can be avoided only by ensuring that no government, whether populated by idiots or not, should be in charge of the economy.

Even funnier
Trump’s obvious economic ignorance isn’t even the funniest thing about all this.

Kush Desai, the deputy White House press secretary, took issue with Surowiecki, and responded: “No we literally calculated tariff and non tariff barriers.”

He added a copy-pasted bit of text that contained a formula full of Greek letters, which presumably was either meant to look intimidating, or demonstrate how clever Trump’s economy minions really are. “Look, there’s a formula, with a tau, an epsilon, a phi, and a delta. It’s even got indices! Impressive, no?”

The thing is, nobody with even a modicum of undergraduate knowledge of economics (or mathematics) is scared of Greek letters. Once you understand the explanation, all Desai did was confirm exactly what Surowiecki claimed in the first place.

To quote Surowiecki: “This is truly amazing. The Deputy White House Press Secretary is claiming that I’m wrong, and that the ‘tariff rates’ on Trump’s chart were calculated by ‘literally’ measuring every country’s tariffs and non-tariff trade barriers.

“To prove it, he screenshots the formula the USTR [Office of the US Trade Representative] says was used to calculate the reciprocal tariffs we imposed on other countries. And when you back out the Greek symbols, what is that formula? Trade deficit/imports – exactly what I said it was.

“I don’t know if the Deputy Press Secretary was misinformed, or is just being misleading. Either way, the Trump administration did not ‘literally calculate tariff and non tariff barriers’ to determine the tariff rates it’s imposing on other countries. As I said, it divided our trade deficit with a country by our imports with that country, and then multiplied by 0.5 (because Trump was being ‘lenient’).

“Oh, and if our trade deficit/imports with a country is less than 10%, or we have a trade surplus with a country, Trump slapped a flat 10% tariff on that country.”

Clown car off a cliff
You’d think Desai would delete his post, red with embarrassment, but the Trump administration appears to be immune to embarrassment. I suppose you have to be immune to embarrassment if you’re driving an economic clown car off a cliff.

Rohit Krishnan, a San Francisco-based technologist and investor who wrote a book about artificial intelligence (AI) for CEOs and policy makers, discovered that four different generative AI engines, when given a simple and plausible AI query that incorporates Trump’s misconception about trade deficits, all produce exactly the naïve answer the White House’s “experts” came up with.

“This might be the first large-scale application of AI technology to geopolitics,” he wrote.

I’m not sure what is scarier: the thought of Trump blowing up the world economy, the thought of an AI chatbot doing it for him, or the thought of the MAGA faithful defending their cult leader no matter how idiotic he gets. What a time to be alive.

Ivo Vegter is a freelance journalist, columnist and speaker who loves debunking myths and misconceptions, and addresses topics from the perspective of individual liberty and free markets

https://www.biznews.com/rational-perspective/2025/04/06/ivo-vegter-penguins-trumps-clown-tariff-war

This article was first published on the Daily Friend.