Trump likes the Liberation Day metaphor because it evokes American GIs parading tanks down the Champs-Élysées and throwing nylons and cigarette packs at cheering French crowds. But it’s an especially inapt way to describe the initiation of a trade war. The liberation of Paris marked an end to hostilities, not their beginning. To whatever extent August 1944 was about sharing the bounties of American commerce, April 2025 will be about not sharing them. Make your own goddamned nylons and cigarettes.
Consider the Value-Added Tax, or VAT, on which many European countries depend, with rates typically around 20 percent. The VAT, which taxes goods at every stage of production, is passed on to the consumer, to whom it is for all practical purposes a sales tax. Here in the U.S. we have sales taxes too, at the state and local level, but state and local taxes combined never reach 10 percent, much less 20 percent. From this, Trump concludes that “a VAT is a tariff.”
I laughed out loud when I saw that the February 13 White House memo listed among the regulatory policies the U.S. will consider trade restrictions “government-tolerated anticompetitive conduct of state-owned or private firms” (italics mine). That sounds more like a justification for European nations to slap additional tariffs on us, given that antitrust regulation is considerably weaker in the U.S. than in the European Union. Trump gave us a preview of his commitment to policing antitrust this week when he fired the Federal Trade Commission’s two Democratic commissioners. “The president wants the FTC to be a lapdog for his golfing buddies,” said one of these commissioners, Alvaro Bedoya, on social media. That was slightly unfair; Trump also wants the FTC to be a bulldog against his political enemies.
I think it’s reasonable to conclude that Powell is not on Team Trump. That makes it a solid 40–50 percent likelihood that Trump will fire Powell before long, or at least claim to have done so. Firing Powell would be illegal, just as Trump’s firing of the FTC’s Bedoya and various other administrative personnel at independent agencies was illegal. Unlike those firings, a Powell firing would freak out the financial markets. But Trump’s persistence in trying to replace tax revenue with tariff revenue, and in manufacturing reasons to do so, is freaking out the markets already, and Trump doesn’t seem to mind. Liberators don’t sweat the small stuff.
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