Liberation Day tariff hangover

Inside the WHAT THE TRUCK?!? newsletter: the industry reacts to Liberation Day tariffs The post Liberation Day tariff hangover appeared first on FreightWaves.

Apr 3, 2025 - 22:27

Welcome to the WHAT THE TRUCK?!? Newsletter presented by Truckstop. In this issue: Liberation Day tariff aftermath and more.

The tariffs are here … now what?

BREAKING: China has rebranded to avoid American tariffs pic.twitter.com/Mkgo4nAozO— Chase Passive Income (@chasedownleads) April 3, 2025

Across the board — As promised, President Donald Trump dropped a bombshell on the shipping world when he announced his initial slate of reciprocal tariffs during Wednesday’s Liberation Day press conference.

White House

“April 2, 2025, will forever be remembered as the day American industry was reborn, the day America’s destiny was reclaimed and the day that we began to make America wealthy again.” – Trump during a Rose Garden event at the White House

FreightWaves reports, “Trump’s plan includes a baseline 10% tariff on trade partners, as well as 25% tariffs on certain imported vehicles and auto parts arriving into the U.S.” In addition, the White House published the new tariff policy, which includes an exemption for products and shipments that comply with the United States-Mexico-Canada Agreement.

But wait, there’s more. Trump says these reciprocal tariffs are only “kind reciprocal.” What he’s talking about is the comparison between the tariffs charged against the U.S. and the U.S. discounted tariff on the list of reciprocal tariffs above.

That image comes with some controversy, especially if you’re in trade and familiar with tariffs. After all, none of the countries on the tariff list actually charge the stated tariff rates across all U.S. imports. So, what is the math behind it?

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.

So we… https://t.co/PBjF8xmcuv— James Surowiecki (@JamesSurowiecki) April 2, 2025

Shortly after Trump’s Rose Garden event, James Surowiecki thought he had cracked the code to the tariff math. The formula he used was (exports – imports) / imports.

Flexport's team was able to reverse engineer the formula the Administration used to generate the "reciprocal tariffs."

It's quite simple, they took the trade deficit the US has with each country and divided it by our imports from that country.

The chart below shows the… pic.twitter.com/01bUpfKgk8— Ryan Petersen (@typesfast) April 3, 2025

Ryan Petersen’s team at Flexport then mapped out every country on the tariff list using that formula and found that it matched up.

No we literally calculated tariff and non tariff barriers.https://t.co/GiWRU6gJDv https://t.co/TmzN1wcC2b pic.twitter.com/sjV9apMJ4F— Kush Desai (@KushDesai47) April 3, 2025

White House Deputy Press Secretary Kash Desai clapped back against the shoddy math allegations by posting the formula they used. … However, when you look at what the values are set to, you’ll see the formula reduces back to what Surowiecki deduced.

Some are also wondering if the whole implementation was government by vibe coding as multiple popular large language models gave similar answers to how they’d impose these tariffs.

This might be the first large-scale application of AI technology to geopolitics.. 4o, o3 high, Gemini 2.5 pro, Claude 3.7, Grok all give the same answer to the question on how to impose tariffs easily. pic.twitter.com/r1GGubcz8c— rohit (@krishnanrohit) April 3, 2025

The inclusion of Heard Island and McDonald Islands, a territory with a population of zero and only inhabited by penguins, has led to questions about how much thought was put into this.