The Morning After

Plus: Eric Adams' clown show, Matt Taibbi's lawsuit, and more...

Why does free trade matter? "Trade has undeniable human costs—dislocated and unemployed workers, some of whom struggle to find dignified ways to support themselves and who may be left with dreary lives without meaning," wrote economist Russ Roberts back in 2016. "What are the benefits? One benefit is obvious—less expensive clothes, toys, and gadgets. But if that's the end of the story, it's a pretty bad deal."

There's much more to it—economic revolutions, brought forth from new technology or expanded trade (or both), bring extraordinary benefits that ripple far beyond what most people see. The transition out of manufacturing employment—the decline of the Rust Belt that Vice President J.D. Vance claims needs to be reinvigorated—brings worries "that not enough of those manufacturing workers have found good alternatives. But, argues Roberts, "I don't think we know just how easy or how hard it has been for out-of-work manufacturing workers to find new jobs. What I do know is that the question of whether trade with China or the increased use of technology in manufacturing has been good for America isn't just about those lost jobs vs. cheap toys. What we have to remember is that spending less on toys (and clothes and cars and smartphones) creates a lot of opportunity elsewhere. That's why trade and innovation and growth matter. That's let the American workforce expand by 12 million jobs since 2000 even in the face of a horrific recession in 2008."

"Trade and innovation are really the same thing," Roberts notes earlier in the piece. "They are ways to get more from less. Ways to be more productive. Ways to increase our standard of living overall though not every single person will benefit. But when we find ways to get more from less, that means more resources available to expand opportunities elsewhere in the economy. That expansion is unseen." (The whole thing is worth a read.)

The Trump administration could stand to read some Russ Roberts (or some Eric Boehm, our resident trade guy).

Here's what happened following yesterday's insane tariff announcement: News emerged that the "reciprocal" tariffs weren't really reciprocal at all, and that the administration had lied about the tariffs levied on U.S. companies when seeking to make the case for the tariffs we're now imposing. Stocks plummeted globally. Recession forecasters updated their predictions, and not in a good way. And while we were sleeping, China retaliated, imposing 34 percent tariffs on all U.S. goods that enter their ports—going into effect April 10, a day after President Donald Trump is set to impose his most recent round of tariffs.

China also took a variety of other aggressive actions, signaling that trade relations have deeply soured, including restricting exports of seven types of rare earth metals; halting imports of poultry products from two major American producers; putting 11 defense companies of ours on an "unreliable entity list" due to their cooperation with Taiwan (whose independence the Trump administration accidentally alluded to, by listing it separately when announcing the tariffs); halting sorghum imports from an American company; and more. Basically, China went a bit scorched-earth.

"I think it's going very well," said Trump yesterday, assessing the fallout from his tariff announcement before jetting off to a golf tournament (truly). "The markets are going to boom, the stock is going to boom, the country is going to boom," he added. "The rest of the world wants to see if there any way they can make a deal."

If that's his game plan, OK: The idea is that this will bring other countries to the negotiating table to get them to remove any tariffs they levy on us. But it doesn't seem like this is what's going to happen. It seems like he's obsessive about trade deficits, and sees them as weak or undesirable, and that he wants to revitalize American manufacturing, not realizing or not caring about the degree to which Americans will be made poorer—in short-term budgetary terms and in long-term innovation terms—from his choice to cut us off from the rest of the world.

For more on this, watch this episode of Just Asking Questions on tariffs, starting roughly one hour in:

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Scenes from New York: Clown/Mayor Eric Adams to run for reelection as an independent, not a Democrat.

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QUICK HITS

• "The European Commission plans to present a proposal to cut back the General Data Protection Regulation, or GDPR for short, in the next couple of weeks," reports Politico. "Slashing regulation is a key focus for Commission President Ursula von der Leyen, as part of an attempt to make businesses in Europe more competitive with rivals in the United States, China and elsewhere." Finally, they learn! Bless the Europoors, may they come to see the error in their ways.
• "President Donald Trump said the US was close to unveiling a plan that would spare the Chinese-owned social media app TikTok from a US ban, with multiple investors involved in discussions for a deal," reports Bloomberg. The deal reportedly involves Oracle, Blackstone, and venture capital firm Andreessen Horowitz, but no details have been released yet.
• Matt Taibbi was called a "serial sexual harasser" by a sitting member of Congress during a congressional hearing at which he was a witness. So yesterday he filed a $10 million libel lawsuit against that member "for allegedly falsely accusing him of sexual harassment and amplifying her claim on her social media accounts," per National Review. "These statements are demonstrably false and were made with actual malice—either with knowledge of their falsity or with reckless disregard for their truth," reads the lawsuit.
• Journalist Daniel DiMartino explains in three minutes why tariffs will make you poorer.
• Yep:

Trump could've followed the Milei path, but he decided he'd rather be Juan Peron. https://t.co/iD3fxRFJ9f

— Zach Weissmueller (@TheAbridgedZach) April 3, 2025

• Beautiful:

Not every stock is down today. And yeah, I get it. pic.twitter.com/BGc9vzKJNb

— Joe Weisenthal (@TheStalwart) April 3, 2025