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Word Smith: GATT

On April 2nd, 2025, the longstanding General Agreement on Tariffs and Trade (GATT) was smashed to smitherines by DJ Trump. President Trump announced a sweeping set of tariffs on what he called “Liberation Day.” He is aiming to reshape the international trading system built by the US after World War II under the trade liberalization framework of the GATT/WTO. The Trump Administration has stated that the new measures will protect American industries and workers; however, critics fear they will lead to higher prices and economic instability in the US and around the world.

In a White House Rose Garden gathering, President Trump announced new reciprocal tariffs, which were invoked under the same International Economic Emergency Powers Act (“IEEPA“) authority that he used for earlier tariffs on Canada and Mexico. The new tariffs impose tariff rates from 10 to 50% on imported products from every country, but new tariffs were not assigned to products from Canada and Mexico. Both countries were spared the burden of additional tariffs.

For Canada and Mexico, the existing fentanyl/migration IEEPA orders remain in effect, and are unaffected by this order. This means CUSMA (Canada/US/Mexico Agreement) qualifying goods enjoy duty free treatment, non-CUSMA are subject to a 25% tariff, and non-CUSMA qualifying energy and potash are subject to a 10% tariff. In the event the existing fentanyl/migration IEEPA orders are terminated, CUSMA qualifying goods will continue to receive preferential treatment (0% tariff), while non-CUSMA qualifying goods will be subject to a 12% reciprocal tariff. The 25% tariffs on steel, aluminum and certain derivatives remain unchanged, and the 25% tariff on certain autos and auto parts came into effect on April 3.

Details on the reciprocal tariffs

Under the President’s Executive Order, tariffs will remain in place until President Trump determines that the national emergency he has identified is resolved. President Trump also retains the power to increase tariffs if trade partners retaliate or decrease tariffs if perceived imbalances improve.

Distinct, individually calculated reciprocal tariffs on the affected 60 countries with which the US indicates it has trade deficits will come into effect on Wednesday, April 9 at 12:01 AM.

The Trump administration asserts that it calculated an aggregate value of tariffs imposed on US goods by each country, which is said to include the sum of real tariff rates, plus the value of currency manipulation and non-tariff barriers imposed against US imports in each country. Beginning April 9, a tariff of approximately half that value will be imposed on imports from each country. For example, the administration calculated that the European Union imposes an effective tariff rate of 39% on US imports. The U.S. will in turn impose duties of 20% on goods of EU origin.

The blanket 10% reciprocal tariffs that apply to other countries, excluding Canada and Mexico, is slated to begin on Saturday, April 5, 2025, at 12:01 AM EDT.

Examining the Emperor’s new clothes, it appears to be international blackmail draped in balance-of-trade garb. He’s trying to pull it off. We shall see how he looks as the deadlines come and go.

Remove the last T and you get GAT: Great American Tourist

With images like this, it is easier to remove the word GREAT from this moniker. As in MAGA. Our stature is greatly diminished in the eyes of the rest of the free world.