Liberation Day?

These days have one thing in common; something very specific happened on that day and history recalls those specific events by acknowledging and celebrating them on the day they happened. People remember them because they actually happened. These are the “I remember exactly where I was when I heard . . .” days.

President Trump has declared April 2, 2025, as Liberation Day. WTF?

According to the Associated Press, April 2 is at least the third “liberation day” that he has declared.

• At a rally last year in Nevada, he said the day of the presidential election, Nov. 5, would be “Liberation Day in America.”

• He later gave his inauguration the same label, declaring in his address: “For American citizens, Jan. 20, 2025, is Liberation Day.”

We should note that in a speech to Congress of March 4, 2025, he said that he scheduled the tariffs for April 2 because he was superstitious about April Fool’s Day.

I’m not making this up.

His repetitive use of the term shows just how much importance Trump places on tariffs, an obsession of his since the 1980s. Dozens of other countries recognize their own form of liberation days to recognize events such as overcoming Nazi Germany or the end of a previous political regime deemed oppressive. Trump sees his tariffs as an equivalent opportunity to provide national redemption, but the slumping consumer confidence and stock market indicate that much of the public believes the U.S. economy will pay the price for his ambitions.

“I don’t see anything positive about Liberation Day,” said Phillip Braun, a finance professor at Northwestern University’s Kellogg School of Management. “It’s going to hurt the U.S. economy. Other countries are going to retaliate.”

Over the past couple of days, Trump’s advisors and allies have attempted to placate people who are concerned that Trump has single-handedly tanked the American economy and the post World War II global trade regime. They admit there may be some disruption, sure, but that it’s like a kitchen or bathroom remodel. It’s messy for a while but then it’ll be better and probably enhance the resale value of your house.

Not exactly.

Let’s talk about the difference between a kitchen remodel and Trump’s gutting of world trade.

• Kitchen remodels begin with a shared recognition that the kitchen doesn’t meet the occupants’ functional or aesthetic needs. Anyone who has watched HGTV knows the buzzwords: open floor plan, kitchen island, granite countertops, a backsplash, pot filler over the stove, stainless steel appliances, an all-white color scheme.

• Then the owners begin the design work, either by themselves or with a designer from Home Depot or a more professional and expensive expert. They lay out the options, cost everything out, and develop a budget with identified priorities. The budget will include labor costs if they are not planning a DIY reno, and also an emergency set-aside in case they find asbestos, termites, or a cracked foundation. They’ll get estimates on how much time everything will take.

• The design will include specifics like including grandma’s hutch in the design and NOT PAINTING IT WHITE, making sure there’s room for the large dining room table you imported from Italy, and ensuring safe storage space for the fine china (both regular and holiday-themed). Everyone involved knows that if you make a mistake – if you paint the hutch or cut down the table to make room for a banquette, you can’t undo that. The damage is done.

• Then the reno process begins. Someone acts as general contractor (either one of the homeowners or a hired contractor) to make sure the plumbing, electrical, carpentry, flooring, and other elements of the design are ordered and prioritized so that everything is ready to be installed or remodeled at the appropriate time.

I don’t think I have to spell out how overturning the global trade regime is not like a kitchen remodel, but I will.

• No economists or experts on world trade agree with Trump that the kitchen needs remodeling. Trump has a singularly uninformed notion of how international trade works and is committed to his assumptions in the face of contradictory economic and historical data.

• The design work, if done at all, was shoddy. It was based on incorrect assumptions about trade and essentially took a sledgehammer to the existing situation without any concern for either functionality or aesthetics. Trump and his band of merry men in the White House made up some calculations about the size of required tariffs on the nations of the world (including uninhabited islands but not Russia, strangely enough) and then displayed them on a chart unworthy of any presentation any of us have ever attended (too small to read, jarring color contrasts).

• This reno process is now proceeding without a general contractor. That’s how international trade happens – it’s not exactly Adam Smith’s Invisible Hand, but it’s multi-nodal and episodic. The decision processes of individual countries are not identical, and things will move in fits and starts.

There’s one more crucial difference between a kitchen remodel and an international trade war: the collective psychology of producers and consumers around the world plays a significant yet indeterminate role.

See, economics is both art and science, both math and psychology. In economics, peoples’ perceptions of what might happen can actually bring about the result they think they are hedging against. I’ll give you a few examples:

• If people fear that inflation will rise, they spend their money now to take advantage of today’s lower prices. This increased demand will cause prices to go up — just as they feared.

• If people fear that the economy is entering a recession or depression, they will hold on to their money to carry them through the bad times. By withholding their expenditures, they are helping to create the recession or depression they feared.

• I’ll give you an example. A couple of days ago I was talking to a friend who is planning to move into a local retirement community – you know, the type where you buy into the place essentially with the proceeds from the sale of your house and commit also to paying a monthly fee that amounts roughly to your Social Security or thereabouts. They were going to pull the trigger earlier this week, but are now holding off because they’re not sure about the value of their house, the reliability of their social security payments, or the value of their stock market holdings as things are tanking this week.

The financial markets are in free fall this morning because people are selling, in the expectation that the markets will continue to fall and they should get out now while they can still recoup most of the value they have in the markets.

• And let’s not lose track of what is likely to happen next. People like Trump and Musk who posses f**kit money – as in, “I’ve got more money than God so I don’t give a f**k if I lose some today because I’ll get it back next week.” They’ll be among those selling today, crashing the markets. And then they’ll buy back in next week at the lower prices. This collective action will stimulate the markets, taking the prices back up – at which point they’ll sell again. Lather, rinse, and repeat.

This is not a kitchen remodel, folks.