This piece originally appeared at Second Best.
After so much talk about the tariffs being “priced in,” it turns out the markets had radically underestimated Trump’s commitment to the bit. And while I was astonished at the stupidity of the “methodology” the White House used to calculate the tariffs announced last week, I was less surprised than many by their sheer size and scope.
As I tweeted a month earlier on February 2:
This is not an endorsement, but I think the "Trump just likes tariffs"-take is missing the forest for the trees.
I think there's a p(=30%) chance that we are instead witnessing the first (albeit somewhat clumsy) phase of a deliberate strategy for controlled de-dollarization.
People will dismiss this as 5D-chessing Trump's economic ignorance, but I've been in or around this world (libertarian-populist fusionism) for over a decade, know many of the relevant thinkers and theories, and have a reasonable track record at interpreting the context clues.
Naturally, many people read this and immediately concluded that I endorsed the tariffs and thought Trump was playing 5D chess. Sigh… As I made clear then and many times since, this was my attempt to issue a warning — a kind of public service announcement — that Liberation Day could have much farther-reaching implications than somewhat more expensive imports.
