Kooky Economic Decisions From Trump’s “Brain Trust”

The Trump Administration announced the beginning of a 25% tariff on goods from Canada and Mexico, our #1 and #3 trading partners.    

The Premier of Ontario has announced retaliatory tariffs on exports of energy to the US.  In 2023, Canada provided 58% of hydrocarbon volume imported by the US. In other words, Canada provided over half of total US hydrocarbon imports valued at $165 billion. More specifically, in 2023, Canada provided 60% of the crude oil and close to 100% of the natural gas imported by the US. Canada also supplies 95% of the natural gas liquids (NGLs) imported by the US. Canada was the source of 85% of the electrical energy imported by the US. And by the way, the Northeast US is disproportionately dependent on these imports.  I don’t think the Ontario Premier nor the new Prime Minister are messing around here.  Stay tuned for more pain directed at the US consumer.

The US imports approximately $320 billion worth of merchandise from Mexico annually.  That represents 16% of the cars sold in the US and a higher percentage of auto parts.  Mexico is the 2nd largest source of vegetables imported by the US including $2 billion worth of tomatoes, in addition to large quantities of other vegetables, fruits, nuts, and beer.  The former and the latter being very close to my heart.  I do not think the President of Mexico is a pushover.  Stay tuned.

Then the man who knows “much,” said he could not rule out a recession.

The stock market has lost over 5% in the last week.  The market value of all publicly traded companies in the US is $62.2 trillion. That is close to a $3 trillion loss or $18,000 for every person employed in the US. In the first 6 days of trading in March. Take a look at your IRA or 401K.  Are you still happy?  I would guess not.  Oops.  The market just dropped another 4 % over the last couple of days while editing.  So think about a $5-$6 Trillion loss or $36,000 for every person employed.

Then let’s add the cost to us as consumers.  If all cars imported from Mexico and Canada received a 25% tariff, the average price of a car sold in the US would increase by 5% or roughly $1,500 per car.  Mexico and Canada represent about 25% of the US total imports of agricultural products.  Simple math would show that the prices of all imported agricultural products will increase by over 6%.  The US imports roughly 15%-20% of its food supply.  Smart, huh?

If we were to deport all the undocumented workers, there will be an impact on the food supply.  The USDA estimates that half of the 1.2 million agricultural workers are immigrants. That’s about 600,000 people of which the USDA estimates that 228,000 are undocumented. Deport them and our domestic food supply is threatened…and will get much more expensive.  And if there are (as reported by the Trump administration) 13 million undocumented people in the US, the agricultural workers represent about 2% of the total undocumented.  I think this would call for some nuanced decision making as opposed to the meat ax approach that this Administration has taken with just about everything.

The US Federal government employs (or employed) approximately 2 million civilians.  That is about 1.2% of the total workforce. If salary averaged $100,000 then firing all employees would save $200 billion.  It seems like a lot, but as the target was to achieve $2 trillion annually, firing every single civilian employee would only achieve 10% of the goal.  And as firing all employees is not possible, let’s say 20%….that’s 2% of the goal.  Seems like all the billionaire brainpower is focused on the needle and not the haystack.

All of this simply reinforces my belief that this administration is more about positioning than progress.  It also confirms my belief that the President does not “know” as much as he claims to and that he doesn’t give a damn about you or your retirement plan. Trump and Musk don’t need 401K plans.  The odds are you do.  And if you do not have one and are going to rely on Social Security and Medicare, watch out. The Destructive Duo are gunning for those programs as well.

Think about these questions:

• Do you think cutting aid to impoverished countries exacerbates the undocumented immigrant crisis?  I do.
• Do you think cutting USAID programs makes the US population safer?  I don’t.
• Do you think cutting fundamental scientific and medical research is going to really save money long-term?  I do not, in fact I believe the opposite.  I think cutting fundamental scientific and medical research imperils our competitiveness and puts our population at risk of disease.
• Do you think betraying the Ukraine, let alone NATO, makes the US safer?  No, I think pandering to Putin puts the US in a subservient position and will yield nothing but an increase in Putin’s aggressiveness – which is not in this country’s best interest.
• Do you think allowing our national parks and forests to be despoiled is good for the population or the country?  I do not.  I think it is sacrificing the long-term for short-term signaling. I also think it is incredibly stupid.
• Do you think firing all the US inspectors general and stopping the cyber safety team and eliminating anti-corruption requirements will make government work better for the people?  I do not.  I believe it signals an open season for bribery, corruption, and opens the door for foreign interference in our basic systems. Which is, of course, what the billionaire hunt club is asking for.
• Do you think that cutting off funding for those agencies and NGOs that help legal immigrants get settled in the United States is anything but vindictive?  I think that’s exactly what it is.  Not only vindictive, but unfair and inhumane as well.

I do not think what is going on is good for very many people.  I think it is bad for the country, and ultimately, will be bad for even the people that voted for this administration and for the states in which they live. I hope that buyers’ remorse really takes hold before the 2026 elections.