The Global Economy Held Hostage

Six months ago, the US economy was the envy of the world. Plus, our weekly tech tip.

Scroll down for the Digimentors Tech Tip from Robert S. Anthony. Want to advertise to our ~15K subscribers on LinkedIn and Substack (with a 40% open rate)? Here’s our sponsorship kit. Email me: sree.sreenivasan1@gmail.com

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THE UNPREDICTABILITY OF THE TRUMP ADMINISTRATION IS COSTING US EVERYTHING.

Trump’s absurd tariff spree, backtrack, and cash out are all well-trod ground at this point. The initial tariff announcement was a bright flashing light to our trading partners, American businesses of all sizes, and the U.S. Congress—if you want anything at all, it goes through Trump.

The initial salvo of this unilateral trade war sent an absolute shockwave through the global economy, wiping out $10 trillion in wealth worldwide. Turns out that, if you are trying to change the fundamental makeup of the U.S. economy—which is exactly what Trump is trying to do—you’re trying to change the entire global economy.

Anyone caught off guard by any of this simply has no excuses. I’ve seen a lot more “I didn’t vote for this” material floating around the algorithms lately, which is a net good, of course. But, if you have not learned to take Donald Trump completely literally by now, I don’t know what to tell you other than Google is just sitting there, and it’s easy to filter by date.

• Here’s a tweet from 2018 in which Trump calls himself “a tariff man”

• Here’s a CNBC interview from March 2024 in which he expounds on why he “is a big believer in tariffs.”

• In February 2024, when asked if he would consider imposing 60% tariffs on Chinese goods if elected, Trump said, "No, I would say maybe it's going to be more than that."

• On April 18, 2011, CNN Money reported: Trump's call for a 25% tariff on Chinese goods is winning him a lot of attention as he weighs a presidential run in 2012.

You get the idea. There are literally thousands of examples of Trump saying very plainly that this is something he was not just willing to do, he was eager to do. He’s wanted to do it forever. He said he would do it. Then he did it.

If this sounds familiar, it should. The cruelty being meted out by every federal agency with even the most tangential role in administering America’s immigration system is, again, something Trump has said he would do for his entire political career.

When he says he is going to at least try to do something, believe him. His politics are more than transparent, they are policy right now. His public brand has been “What next?” for 30 years, and somehow, the smartest people in the room are shocked every time.

Now, it’s the American economy held ransom, full stop. Kiss the ring, maybe you’ll get some exemption, maybe not, who knows? And that’s just it: No one knows! This CNBC piece lays out a pretty grim scenario for every industry. This headline — Trump tariffs on China will soon bring ‘irreversible’ damage to many American businesses —doesn’t pull punches. This anecdote can be applied to literally every aspect of your daily life:

Stephen Lamar, CEO of the American Apparel & Footwear Association, said the sudden policy changes and high tariffs are disrupting supply chains at a level not seen since the pandemic.

“With prohibitively high tariff levels on U.S. imports from China, many companies have no choice but to cancel orders,” said Lamar. “The constant switchbacking means new tariff costs are not accurately presented or predictable until the goods arrive at the port, and the high rates are generating bills that can’t be paid. That is not a risk or burden small business can sustain.”

Lamar said with no alternative sourcing on the horizon for many of these companies, particularly small businesses, this sudden lack of orders will immediately translate into lost sales and widespread product shortages. “An extension of the trade war pause to U.S. imports from China is needed now before the damage is irreversible,” Lamar said.

Think about food imports, think about cheap clothes that people rely on in many cases. Dollar stores have replaced grocery stores across rural America, and many people simply lack options and rely on cheap imported consumer products. A lot of that comes from China. Much more of it comes from somewhere else.

The fact that all of that stuff comes from somewhere else and is cheap is a pretty good thing for Americans. In the short and medium term, it’s certainly better than a haphazard attempt to somehow try to—let alone want to—to somehow re-shore industries the U.S. has very little contemporary experience with.

To boot, the self-described “party of fiscal responsibility” is passing budget resolutions that will enact tax cuts that will add at least $6 trillion to the federal deficit. It’s crucial to understand that the U.S. deficit means that our public purse is financed. Trillions of dollars of debt are controlled by the very allies the administration has been confrontational with at every available opportunity. When U.S. Treasury bond yields start moving, that’s the market saying it doesn’t think it can trust the United States anymore. The dollar as the global reserve currency underpins America’s often-extreme levels of influence in even the most mundane of world issues. Undermining this makes your life more expensive almost immediately.

Manufacturing takes massive amounts of capital investment and, more crucially, time. With sweeping tariffs, the government essentially has to pick its champions and support them unequivocally for as long as it takes. This is not the story even the most run-of-the-mill Republican has run with since Ronald Reagan. Free people, free markets—rhetorically, anyway—has been the base-level thesis of GOP politics for my lifetime. The lack of meaningful Congressional action on tariffs—yet another abdication of its power as a co-equal branch of government—is really a double-down on this agenda of economic destruction.

This is coming at the expense of everything that makes us an actual society—publicly-funded education and research, food assistance and pensions, public health… the list goes on and on.

The U.S. economy needs to transform, but in the exact opposite direction. The insanity of all of this is that the Biden administration did a better job than any other major country—by a wide margin—rebuilding after Covid.

Now, don’t confuse this with a sort of “everything was perfect before, let’s just do that again” take. That is decidedly not the case. This remarkably simple chart tells the story of a country that became explicitly antagonistic to “The American Dream.”

“The haves and the have-nots” should be replaced by “the haves and those who participate in the gig economy out of necessity.” That’s the reality.

Over the last 25 years, the share of wealth owned by the top 0.1% has doubled to nearly 14%. That is a transfer of wealth from the bottom to the top that no democracy can endure. This is from the St. Louis Fed:

Now, we have extreme economic inequality mixing with a patronage network retrofitted onto political and legal systems that are bending under the pressure of their innate reliance on cooler heads prevailing.

A closing thought for now, about bringing manufacturing back to the US from China. If you listen to Apple’s Tim Cook, America doesn’t have the infrastructure and trained workers China does. And, therefore, making it ready is likely to be impossible.

— Sree | Twitter | Bluesky | IG | LinkedIn | FB | YouTube / Threads | Spread | TikTok

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LISTEN TO SOMETHING: Autocracy in America

Few know more about the rise and rise of modern autocracy than Anne Applebaum and Peter Pomerantsev. Last September, they launched a six-part podcast series on how would-be autocrats come to seize power across all facets of government. The entire series is good, with short, digestible episodes that lay out how dictator-types go about coopting the security forces, the courts and the economy.

We’re at the “Join the Kleptocracy” phase now, so feel free to start at episode 4 of Autocracy in America to get up to speed.

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TECH TIP | Mado: Throwing Shade While Embracing the Sun

By Robert S. Anthony
Each week, veteran tech journalist Bob Anthony shares a tech tip you don’t want to miss. Follow him @newyorkbob

Sometimes bright ideas just need a little sunshine, and sometimes the bright idea has to do with managing the sunshine. That’s the case with Mado, a high-tech smart window shade which takes its power from a low-tech source: the sun.

The Mado AI-powered C-Series motorized shade was designed to be both easy to install and use, but smart enough to connect with smart home services, said Andrew Einaudi, CEO and co-founder of Mado Dynamic, during a recent Techfluence virtual press-only event.

Unlike standard manual or motorized window shades, Mado doesn’t require drilling or tools. It also doesn’t require batteries or an electrical connection. Instead, the unit has a solar panel which keeps its internal lithium-ion battery charged for months at a time, said Einaudi, who noted that the unit can also be charged with a standard phone charger via a USB-C port.

Instead of tools, the unit comes with an adjustable tension rod marked like a ruler. Once hand-tightened to the window frame, the user reads the measurement from the tension rod and uses that number to trim the shade, also marked like a ruler, with an included guillotine-style chopper. Once the shade is trimmed, the shade mechanism is mounted atop the tension bar. Slide-out plastic pieces on the top and bottom of the shade fill in any gaps.

The Mado shade, available in light-filtering and blackout versions, comes in four sizes: small (for windows 24 to 36 inches wide; $279), medium (36 to 48 inches; $314), large (48 to 60 inches; $349) and extra-large (60 to 72 inches; $384).

Raising or lowering the shade can be done with a simple remote control, a nice feature for older users, but the unit also comes with a mobile app which can automate shade operations by connecting to smart home services from Google, Amazon, Samsung and Apple, said Einaudi. Once the app knows the user’s location, it can “balance energy savings and health benefits by integrating window orientation, sun path, weather, time of day, seasonality, and home/away status,” according to the company’s press release.

Mado, a crowd-funded Kickstarter startup project shown at CES in Las Vegas in January and at SXSW in Austin, Texas in March, has already raised more than $226,000 in pledges, well beyond its $37,000 funding goal. The unit is expected to ship in September.

Did we miss anything? Make a mistake? Do you have an idea for anything we’re up to? Let’s collaborate! sree@sree.net and please connect w/ me: Twitter | Bluesky | IG | LinkedIn | FB | YouTube / Threads | Spread | TikTok