Good morning, John.

One of the things about the way the news happens when Trump is in office is that there's so much of it that it is very difficult to keep track of anything. I've seen a lot of different people deal with this in a lot of different ways, but I've not seen them try to deal with it using the tried and true YouTube innovation of the tier list.

Do you want to explain to me all of the ways that the Trump Liberation Day tariff story has been weird and wild and at times apparently unhinged? I will not be able to listen. However, if you create a tier list of the craziest bits of the story by level of crazy, I'm in. Unfortunately, no one else was doing that job. So, I find myself having to do it- as complete as I can make it the Liberation Day tier list of crazy. I'm going roughly chronologically here because I don't know how else to do it. So, we're going to start on this "Liberation Day" in which the tariffs were announced and they were all called "reciprocal," which meant that our tariff rate would match their tariff rate, which included tariffs, currency manipulation, and trade barriers, which of course would be very difficult to calculate for one individual country, let alone 200 different countries. And they solved that problem by simply not calculating anything.

Instead of course, we all know this by now. They took the trade deficit and called that the tariff rate and then discounted it by cutting it in half for some reason. But even though we know that all of these countries do very different things and there's all kinds of different reasons why the trade deficit or surplus would be the amount that it is, they kept calling it "reciprocal." So, we're going to slide our little representation of reciprocal tariffs over here into E-tier, cause that's not crazy. It's just misrepresenting stuff in a dishonest way, which makes perfect sense if you feel like you can get away with it. And next, of course, we're going to talk about the equation.

So, when the "trade deficits aren't the same thing as tariffs" thing was pointed out, the administration said, "No, we  actually have an equation that we use." However, two of the terms in the equation cancel each other out. So, in fact, the equation is just the same thing as the calculation of a trade deficit, which is wild. Almost endearingly crazy. I'm going to slide that over into B-tier. Our first B-tier crazy thing. But actually, we got we got to clone this one. Let's pop them out because there's another crazy thing about this which is that all of these wild crazy letters, they didn't need to do that. Like this is a tau for tariff. It could have just been a T. And I love that. And that's going to have to be its own thing on the list. I'll just cut out the tau and, and just have that be the thing because we got to slide that into A-tier. That's A-tier crazy right there.

Now, we're actually going to do that again because this term here, they actually just swap these terms so you end up with a negative number, which doesn't make any sense, but that's not crazy. It's just bad math. So, we're going to put that in E-tier.

Okay, I'm done with the equation, though I am aware that there are other things that people pick apart about this equation, but you're getting bored with it. Next on the list, there's a group of islands on the tariff list that does not contain people. It is populated entirely by penguins. This seems to just be a mistake, but it also indicates that like not a huge amount of attention was being paid to something that has really tremendous global consequences for Americans and also everyone else. And let me tell you, if there weren't some really wild stuff coming, I would definitely put these penguins in the S-tier. But we're going to go A because we do need to leave some space for it to get crazier than this. Now, hilariously, US Treasury Secretary Howard Lutnick, we're going to pop him on here, defended this move, saying it was to close down ridiculous loopholes where a country will export something to another country with a lower tariff and then export from the Heard and McDonald Islands, which, for clarity, does not have people or ports, but whatever. Which I do think is pretty crazy, but it's mostly just dishonest and manipulatively covering up their mistakes. So, I'm going to go C-tier. Howard Lutnick goes down here in the C-tier.

But if you want to go deeper into why this is a silly argument, my favorite esoteric craziness of the tariff list is that the United Kingdom has half of the tariff of the European Union. And if you're worried about someone skipping out on a tariff by sending a product to a country with lower tariffs first and then exporting it from that country to the US instead of the original country. Let me introduce you to a country that has both ports and people. It's Northern Ireland. This is important because of the S-tier craziness that was Brexit. As far as trade is concerned, Northern Ireland is in both the United Kingdom and the European Union. The existence of Northern Ireland as a place that has both a 10% and 20% tariff because of the No-Deal Brexit. I'm going to call that A-tier crazy. So now you know one place that would really benefit from these tariffs. Everybody in the EU would be sending their stuff to Northern Ireland before it got exported to the US.

Next, this is not something that Trump intentionally did here, but it is a consequence of it. And I think that it is S-tier crazy. We're finally getting to the S-tier. Japan, China, and South Korea in response to all of this instability that has been created by a bunch of like not just this, but just no one knowing what's going on with the US anymore. They signed a significant trade agreement. And I just need to emphasize these countries do not like each other. They don't like each other so much that historically they have worked with other
trading partners in the West, like America and Europe, so that they do not have to work directly with each other. But now apparently we've pushed them to figure out their problems, which is great for China, that's for sure. World peace I guess. Uh, just the fact that this
picture exists, you guys, that is historically S-tier crazy.

Now, while we're in Asia I have given Vietnam its own spot in this tier list because they ended up with the highest average tariffs under the original tariff scheme. And this is wild. A 90% tariff on Vietnam is so crazy because they aren't a major competitor in the highest tech or strategic manufacturing. The reason we have a very large trade
deficit with Vietnam is because we have a really solid trading relationship with them which is working and that's kind of amazing given our history. And also Vietnam is a key partner in diversifying supply chains away from China which is exactly what US trade policy says that it wants. So, giving our trading buddy the harshest tariff treatment of everyone on the list, that is S-tier crazy. Almost as if this extraordinarily impactful policy was not well thought through. Which, if I had that as its own thing on the list, probably would also be an S-tier.

Okay, and back to the trade deficit thing. Do you notice how a lot of countries are getting 10% tariffs on this list? Well, I thought maybe those countries were like less consequential, not big trading partners, or maybe it was because they were really good trading partners that we that were allies that we had good relationships with. But looking at the list, there didn't seem to be any pattern that made sense to me. Well, it turns out that these are countries that we have trade surpluses with. They buy more stuff from us than we buy from them. And yet we're still saying that their base rate is 20% and we're going to have that to 10%. Like that's S or A. I'm going to call this A because it is it is crazy, but it's not like everything that's S-tier on this list is just so so weird and ridiculous. Speaking of close trading partners, the United States, Mexico, Canada Agreement, which is the trade agreement that replaced NAFTA, which Trump tore up to do all these new tariffs on Canada and Mexico, that was signed in a previous Republican administration, Donald Trump's first term. Here he is celebrating the signing of that agreement that he has now destroyed with the leaders of those countries. For anyone else, S-tier
crazy. For Trump, I don't know, C-tier, like not, not that weird, honestly. And also again, we got to leave room in the S-tier for stuff like this. So Trump loves tariffs for a lot of different reasons. One of them is that his adviser, Peter Navarro, also is a really big advocate for tariffs. Though this is not a universal thing in people in his administration. For example, Elon Musk recently called Navarro a moron. Now, Navaro has written several books in which he talks about why tariffs are good and he has cited this protariff economist who is named Ron Vara which is, yeah, an anagram for Navarro and yes it turns out that Ron Vara is not a person who exists so what do you do with a situation like that making up a pro-tariff economist for your book I think is like C-tier crazy but naming him like you're a teenage Lord Voldemort is S-tier crazy.

Next, this probably doesn't matter to anyone, but when they calculated the trade deficit they only did it on goods and not services. And of course, the US provides a lot of services for places elsewhere in the world. I think if you're going to calculate a trade deficit, you should include all of the things that we do, but whatever. We're going to put that in D-tier. Also going in D-tier is the cost of living is the thing that got Trump elected. And of course, putting a giant tax on a bunch of things is going to increase the cost of living. But like, what? I don't know. But I feel like, weirdly, even though that was of course the most important issue in the election, it is no longer the most important issue and it's not something people are thinking about very much, which okay, we're just going to put that in D-tier. But this next thing I think does matter. The reasons Trump has given for the tariffs are contradictory. So of course it would be fine to have multiple reasons for doing something, but not if one of the reasons makes it impossible to do the other reasons. So Trump has both said that the tariffs are going to be a thing that lasts forever and are going to like raise a bunch of money to help pay for his tax cuts and that they are a tool that he's going to use to get countries to do what he wants them to do. But in that case, he would have to make the tariff go away after they do what he wants them to do. And then they would not be raising money for his tax cuts. And in the same way, bringing manufacturing back to the US is a contradictory goal to using the tariffs for, you know, a negotiation purpose because then you have to let the tariff go and then manufacturing doesn't come back to the US. And manufacturing especially doesn't come back to the US if no one knows what is ever going to happen. Manufacturing doesn't really go anywhere because everybody was waiting around to see what happens next, which is a thing that we will get to. But the fact that the reasons given for the existence of the tariffs are not just like a list of reasons. There are a list of reasons that all contradict each other. I'm going to put that in B-tier because it does seem pretty crazy to me because it prevents anyone from having any idea what's going on, which I think is bad for most people. But next, uh, he cancelled them. So, this is I mean, wow! Like, the trade war with China is still happening, but as does seem to happen over and over. All this weirdness went on only for it to stop or get paused or to be something that's sitting out there, maybe going to happen, maybe not. Some countries seem to have offered some concessions, others definitely did not, but the result doesn't seem to have been positive. Now, cancelling them does seem to have been good. Uh, like it has prevented the sort of economic collapse that we seemed to be headed into. So, it is not crazy outside of the original context of him being the one who implemented the tariffs in the first place 9 days ago. So, I'm going to say this is this is E-tier crazy. Like it's actually that's the most sane thing that happened in all of this.

Now speaking of, there have been headlines that are like the stock market just had its biggest gain ever and I'd say those headlines are A-tier crazy. Like the, the unit of a day is arbitrary and everyone's retirement account is still worth like 6% less than it was last week. But let's talk about why the result of announcing and then pausing these tariffs hasn't been positive. Like, despite the tariffs probably going away, why have trillions of dollars of value in the stock market evaporated since April 2nd? And the first reason I'm going to give you is stability. So everything thrives on stability. I run a couple of businesses. Together they have around 100 employees. One of those businesses is import sensitive. One of them is not. But right now, both companies, including the one that isn't particularly sensitive to imports, have a lot more hesitation now than they did a month ago around investing in new product lines or new shows or whatever. Not just because we are unsure of what tariffs are going to be like, but because we're unsure of what the economy is going to be like. It's messy. It's really hard and confusing right now. And it's easier to sit on capital in an environment like that rather than make investments that you think are probably but maybe not going to pay off. Economies thrive on stability, including the American economy. And the current environment of intentional instability is bad. If it were being done for a purpose I understood, I think that maybe I'd get it. But for me, intentional introduction of instability in exchange for everything being put back the way it was a week ago for no apparent gain is S-tier crazy. And the same thing goes for trust. Now, President Trump believes that trade deficits are somehow the same thing as like not just losing money, but being stolen from. Even though obviously we as a country consume more than many of our trading partners because we have a lot of people. We're the third biggest country and those people consume a lot. We're the largest economy. So it makes sense that a lot of countries buy less stuff from us than we buy from them. But President Trump seems to believe that everything is about either winning or losing and there's no such thing as a mutual benefit which results in tweets like "DO NOT RETALIATE AND YOU WILL BE REWARDED". But this destroys trust. It destroys trust between the US and the rest of the world. It isolates us and it leaves other countries in an opportunity to come in as a more trustworthy potential partner. Degrading the long-standing trust that the United States has with much of the world destabilizes the global economy and weakens our strength in the world. And then postponing the tariffs, just like he's done a bunch of other times with other tariffs, just makes it look like no one can trust anything we do. This is S-tier crazy.

Okay, we are at the second-to-last thing. Just before cancelling the tariffs, Trump posted to his people on Truth Social, "THIS IS A GREAT TIME TO BUY!!!" He even signed it to make sure that we all knew that it came from him. One assumes that when he posted this, he knew he was about to make the market go up by 10 or 20%. This is so gross. It's basically saying, "Hey, use my social media platform that I own and that when the stock goes up, I get richer and I will help you do insider trading." I don't know that people understand this, but insider trading is theft. You are using information that you have to buy something from someone who does not have that information. And when the price goes up 30 minutes later, that's money that would have been theirs and is now yours. Insider trading is illegal because it is theft. And posting something like this when you know you're about to do something to make the stock market go up feels to me like encouraging theft. It is S-tier crazy. It is really bizarre behavior. And the only way I can explain it in my head is that Trump thinks that loyalty to him, like being a fan of him is the most important thing that exists. And it is it far exceeds loyalty to the country or to the Constitution or to the rule of law. And like you need to reward that loyalty more than you would reward loyalty to the rule of law. I don't know. Like I don't know. It's it's mindboggling. And the fact that it feels like this kind of theft is normalized is probably also why bets that the stock market was about to go up spiked just before the announcement was made, indicating that a bunch of people with insider knowledge of the Trump administration used that knowledge to steal a bunch of money from people who didn't have that insider knowledge. And that behavior I don't think is crazy at all. That's S-tier illegal. But if you don't think that you could ever get caught or prosecuted because your boss runs the Justice Department, that's not crazy. It's illegal. But if it doesn't matter when things are illegal or not, then it's rational behavior.

Which brings us to the last headline that I saw about all of this before I actually needed to start exporting this video. "Trump says he will consider exempting some companies from US tariffs." This is, this is how you create an oligarchy. You say to the big, powerful business people, "If you behave and do things that I like, I will use the power given to me by the American people to help you out and do the things that you like." Do small businesses get that help? Of course not. And that's great for the big businesses. It means that they have less competition. It's just terrible for consumers. But you see how all of these like formerly capitalist business owners don't actually have any ideological allegiance to capitalism. They will absolutely become oligarchs the moment you give them the chance. That is a top-tier disaster for the country. It's a top-tier power grab, but it's not crazy at all. It is people behaving rationally. And I really do believe that there is a, a bit of a logic here to some of what just happened. He destroyed a huge amount of value, but he has converted some small portion of that value to power that's just for himself. But because it's only for himself rather than spread out around many, many people, it's actually a lot of new power for Donald Trump because he gets to use these tariffs to strongarm companies into doing what he wants them to do.

But let's end with a couple of entirely non crazy things here. For example, Elizabeth Warren saying that members of Congress shouldn't be allowed to trade stocks. Yeah, do that yesterday. That's ridiculous. I don't like, why would you? Even if you don't, you aren't going to do it in a way that's shady. You're a public servant. You need to put that in trust and not touch it. Why even open up the discussion that you might be doing this, let alone actually have a track record of consistently beating the market, Nancy Pelosi. And another non-crazy thing, Republicans standing up in Congress and saying that the Constitution is pretty clear that the body with the power to levy new taxes on the American people is not the president, but instead is Congress. That's the second article. It's not even an amendment. That's not crazy at all, right? Like that's a good policy. Almost as if the framers of the Constitution, the founders of this country, thought there should be checks and balances on the power of different branches of government. Otherwise, perhaps a president might make some pretty bizarre choices that would result in some pretty bad outcomes for individual Americans while nonetheless consolidating power around him. John, just a note, I'm making this video on Thursday, April 10th, and releasing it on the 11th. And who knows what will have happened in those 24 hours. So, if I miss anything, I'm not surprised. Also, John, thanks to you and everybody who's been working with you on going to DC to lobby Congress to continue and escalate the fight against the most deadly infectious disease, not just of today, but of all time. We can and will still do great things as a species, and that includes one day having people not die of preventable diseases. You're amazing. I'm proud to be your brother and I'll see you on Tuesday.