👁️ Trump's Tarrifs: The Horror of Unknowing

A psychoanalysis of ignorance, nihilism, vengeance, and control.

No news roundup today. Just The Only Story.

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I spent about the first half of yesterday in a haze of terror, watching markets crash in response to Trump’s tarriffs. I’m still pretty fucking freaked out.

Obviously, I was far from alone: plummetting markets are less the cause of panic than a reflection of it. They’re our only truly trusted source of information anymore.

Markets are also, in accord with one premise of this newsletter, increasingly batshit crazy, because of the decline of the broader information ecosystem. The 8% rally following a mangled quote suggesting a 90-day tarriff pause upends any comforting illusion of their logic. The fact that the DJIA closed essentially flat yesterday, after plummetting 3% in 15 minutes on the open, makes the same point.

(On that note, let me interject some actionable advice: Think hard before selling American assets after last week’s sharp, emotional 10% selloff. Selling into a market collapse is almost always a terrible, terrible mistake. Personally, I’m already gradually buying.)

“Hang tough, it won’t be easy.” Image via Yahoo News.

Market chaos reflected not uncertainty about the impact of the Trump tarrifs, but uncertainty about what the hell was going on - uncertainty about there being any kind of rationality at all at the top. The source of the tarriff numbers has been stubbornly unclear, and what we’ve discovered about the method is not reassuring. It’s similarly hard to take the White House’s explanation of the motives for the tarriffs seriously, in part because there are multiple conflicting claims about the policy goals.

Before I was drawn into the Sam Bankman-Fried book (coming in October), I was beginning to think about the Horror of Economics. We now live in a world structured by rules and policies that are basically just ideas agreed upon. This creates a cloud of uncertainty and a vertiginous anxiety for many people - all of us, in fact, to some degree. It’s impossible to fully understand a system this complex, or to master its inevitable uncertainty.

It’s on days like yesterday when this becomes most clear: the source of lived horror is the unknown, and now we are heading squarely into that unknown.

But it’s not quite as unknowable as it seems. I don’t mention it much here (because really, who cares), but before I got obsessed with finance and economics circa 2008, I was an academic social scientist. One of my big areas of interest was the degree to which people do not understand their own motivations.

An economic policy has psychological as well as practical goals, and the apparent chaos in this case can be somewhat softened by looking at the emotional needs of those who created or support these tarrifs. That’s not to say the answers are pretty, but they are there and that’s something.

After a brief overview of the material situation, below I run through what I’ve seen of a few different silent but animating motives for support of the tarriffs:

Control, Vengeance, Nihilism, and Ignorance.

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Why Tarriffs?

Donald Trump has been talking about tarriffs for a long time, and the basic idea behind them is fairly orthodox economics. If NAFTA-style global free trade led to the export of manufacturing to countries with cheap labor, then imposing punitive tarriffs should reverse that. The implementation here is obviously inept, and there are more specific barriers to “reshoring” American manufacturing, but the broad idea is not insane.

(There is an entirely different analysis to be written about the refusal of a certain class of Trump 2024 supporter, many of them in crypto, who seem to have completely dismissed the idea that the tarriff promises were anything more than hot air. I hope they’re enjoying their 24% drawdown.)

But Trump’s actual understanding of tarriffs and trade balances is disastrous. In essence, he believes that giving anyone money means you are getting ripped off. That was certainly true in his own business life, where he was notorious for simply stiffing contractors.

This misunderstanding is at the root of the assignment of insane tarriffs to places like Vietnam and Bangladesh. As Matt Levine summarizes the logic, “if a country exports more goods to the US than it imports from the US, that is necessarily unfair, and if you can’t find a tariff that explains the disparity, you can simply assume a secret mystery tariff.”

The reality, of course, is that the U.S. buys more raw materials from poor countries than it sells McKinsey consulting contracts back to them.

One apparent source of this disastrously misinformed take, or at least someone who has reinforced it, is Peter Navarro, Trump’s trade advisor. Navarro has become the proximate cause of the awaited and inevitable rift between Trump and Elon Musk, who this morning called Navarro a “moron” and “dumber than a sack of bricks.”

Which are both pretty fair, even coming from K-hole Elon. Above all, Navarro is the source of the idea that the U.S. is fighting back against nebulous “non-tarrif barriers” that justify the insane numbers the admin has pulled out of a hat. He also completely aligns with Trump’s existing simpleminded understanding that a trade deficit means you are being robbed, instead of simply meaning that you are the richest country on Earth.

Navarro is representative of the much broader decline in the caliber of people around Trump since 2016. While they’re not exactly equivalent, compare Navarro to Steven Mnuchin, arguably the savior of the last Trump admin’s legacy. Navarro is an election denier and conspiracist, and while he was an economics professor at UC Irvine for two decades, his beliefs about trade are considered extremely fringe within his profession.

Or, as one tweet put it succinctly, “Downgrading from a bunch of Goldman guys in the admin to Cantor Fitzgerald was a major and obvious red flag in hindsight.”

Why Not Tarriffs?

Here’s a shocking admission: I agree in principle with many of the goals of the tarriffs. So does Bernie Sanders, in fact. Re-industrializing America is good for economic, social, strategic, and even environmental reasons. I spent the COVID pandemic writing about America’s fragile, just-in-time supply chains, and praised the Biden administration’s efforts to rebuild manufacturing supply through Federal contracting.

But tarriffs will not get us there. There are a few reasons.

• Basic Specialization Theory. It’s hard to see from 2025, but globalization made the world rich, for the very simple reason that it unlocked every nation’s highest value-adding potential. This includes everything from the population’s education level to what kind of trees and minerals are around. Did you know that the U.S. exports chopsticks to China? Because we have the trees! Throwing up tarriffs that interfere with that kind of natural, inherent efficiency are de-growth policies, full stop.

• Predictability and Timing. The big reason tarriffs won’t magically re-industrialize the U.S., though, is the same reason they crashed the stock market - not because they exist, but because they cannot be trusted. Tarriffs are deep economic guiderails, things that structure huge decisions. Those decisions require huge lead time, and they have to offer predictable return on investment, which requires certainty that the tarriffs will still be there tomorrow. These tarriffs were imposed through emergency executive order by a President with no popular mandate or straightforward ideology. Not only could Congress cancel them literally at any time by overriding emergency Presidential powers, Trump himself could plausibly reverse himself and frame it as some kind of win.

The Psychopathology of Tarriff Obedience

Probably my greatest influence in social science is Jacques Lacan, a French psychoanalyst who saw the incredible perversity of human action with staggering clarity (even if he didn’t write with the same clarity).

The most important phrase that Lacan ever coined was les non-dupes errant, or “It is those who are not fooled who are mistaken.”

To be rational, to gain understanding, we must process the irrational.

Tarriffs as Control

Religious scholar Laura Robinson has observed that pro-tarriff men “think that the point of tariffs is to cause economic hardship *specifically for American women.*” The logic of this seems to be that professional women don’t have real jobs, and that tarriffs will destroy the professional class, rendering more women dependent on men, who won’t be required to change at all.

Or, as one grim and sincere harbinger put it, “you do not solve low birth rates by giving money to women, you solve low birth rates by taking money away from women.”

Tarriffs as Vengeance

More broadly, the assumption is this: Destroying the economy will at least mean *I* have more power and control over whatever’s left. And there are some very comprehensible reasons for this sentiment.

Globalization has objectively had unequal impacts across class lines. Professionals benefitted broadly, and the working classes suffered. But it’s interesting to note that Trumpist logic doesn’t leave much if any space for laying blame on the very wealthy, who have benefitted the most.

Here it’s important to point out that the Left was correct about this. This systematic hollowing out was exactly what The Battle of Seattle was meant to be a warning against. But that was also when the Democrats had already truly given up on working people.

Anti-World Trade Organization protests, 1999. Wikimedia Commons SSA.

Tarriffs as Boredom (and Nihilism)

The more you look, though, the more it becomes clear that the opposite motive is also true: yes, the working class has good reason to be angry at the elites that engineered globalization. But most Trump supporters are not working class.

For many of them, the target of rebellion is not suffering, but comfort. Yes, this is idiotic - most of them have no idea what working in a factory actually entails, and broadly these fantasies are of how good it would be for other people to have more traditional jobs.

But they’re not wrong when they diagnose the lack of meaning and purpose that comes with the office-email job complex. They’re fulfilling the coda to Fukuyama’s End of History: the warning that “if men cannot struggle on behalf of a just cause … they will struggle … for the sake of struggle … out of a certain boredom.”

We have resorted again and again to war as the source of that meaning-making struggle, but this time we had a choice. It was again the Democrats who largely abandoned what would have been a righteous struggle: to make sure American prosperity is shared. They left the field open to a figure like Trump, and one arrived, making absurd promises of a thing that an actual progressive movement could have pursued in a more substantive and informed way, if it had ever been allowed to exist.

Now, after the fact, in the face of a crash caused by knee-jerk policies imposed by people who don’t understand what they’re doing, we’re seeing a different sort of nihilism: right-wingers like Benny Johnson suddenly claiming that money and material comfort don’t actually matter.

Tarriffs as Ignorance

Ignorance isn’t quite the right word here. What we’re dealing with is proud ignorance, ignorance weilded as a weapon and a shield, a corrolary to nihilism that (rightly) equates understanding with caring. And caring means you’re a soy libtard, so of course ignorance is strength.

One fascinating meta-narrative was theorizing that the tarriffs had been calculated using AI. Whether this is true or not is unknown and likely to remain so, but Brian Merchant rounds up all the evidence: major LLMs produce results that look a lot like what Trump imposed. AI expert and AGI debunker Gary Marcus also found it plausible.

It’s extremely plausible, and we’ll probably never know the truth. Regardless, this is what the future looks like: The people in the Trump administration don’t have a critical understanding of AI, and neither do most Americans. As Merchant puts it, “the AI industry has created a permission structure for use cases like this one, with its ‘incredibly capable’ AI systems, and AGI just on the horizon.”

Everyone is already letting AI do their homework, and we will get more insane outcomes like this. More importantly, just like the Trump administration, and just like lazy American college students, people will lie about it. More than that - if you object to the spread of broken AI logic through society, you’ll be the bad guy.

The cloud of unknowing isn’t new, though. The misintepretation of a question about a “90 day pause” - a question itself posed out of a hungry desperation to make anything make sense - led to a massive market spike that probably both made and lost people a lot of money. Pure, unreasoning chaos. But that’s just the kind of fake news we’ve been living with for more than a decade, thanks to the last tech boondoggle, Facebook.

One group that (sort of) benefits from this chaos, and has been growing for years? Traders. Both coplaying, money-losing day-traders, and the actual professional kind. The point of being a trader, at least in the contemporary sense, is to have no convictions or ideas, to simply watch the chart. Traders love volatility. Wallstreetbets loves uncertainty.

And everybody loves ignorance. You can see it in the wildly unrealistic timelines for American re-industrialization. The funniest example is probably Treasury Secretary Scott Bessent arguing that there’s ‘no reason’ for the market to be panicking.

There is a deep satisfaction available simply in the refusal to understand.

You get to keep that satisfaction, even as you starve.