That’s transshipping: President Donald Trump announced Thursday evening that he would set new tariff rates on roughly 67 countries, which they could negotiate over the course of one week. The rates are supposed to go into effect on August 7.
New tariff rates for Laos, Myanmar, and Syria were set at 40–41 percent. Iraq will be hit with a 35 percent tariff. Switzerland will face a 39 percent tariff. The baseline tariff rate on all countries remains set at 10 percent—unless we have a trade deficit with them, in which case it is ratcheted up to 15. Anything that Customs and Border Protection (CBP) can credibly claim has been “transshipped”—which, to them, appears to mean passing partially manufactured goods on to another country before they are shipped off for good, in order to avoid higher tariff rates from the original sending country—will be tariffed at 40 percent. “Transshipped has a current, actual legal meaning: it means the Country of Origin is improperly labeled,” writes Charles Benoit, an international trade attorney, on X. “If a good is labeled as Product of Vietnam, but is deemed transshipped because there was insufficient transformation in Vietnam, then the product is no longer considered a Product of Vietnam, but some other country (China).”
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“We have a large range of ‘Rules of Origin’ already, and have for many decades,” continues Benoit. “Some are very weak and easy to meet! E.g., our Rule of Origin for GSP [Generalized System of Preferences] Beneficiary countries. It’s just 35% content, and you can count all sorts of non-material spending towards that 35%. Others are much tougher, like the USMCA [United States–Mexico–Canada Agreement] Automotive Rule of Origin. Lots of room for creativity here.”
There’s going to be a lot of money and time spent on compliance, in other words, and possibly disputes between CBP and manufacturers regarding the provenance of goods.
Since transshipping is illegal today, what is going to change? Trade becomes more uncertain, other than compliance costs — those are going up for sure. pic.twitter.com/aGZqmgrjfH
— Steven Okun (@Steven_Okun) August 1, 2025
A second executive order raises tariffs on Canada for goods not covered under the USMCA trade agreement, from 25 percent to 35 percent, claiming Canada has failed to curb fentanyl in-flows.
As Reason‘s Eric Boehm points out, the legal authority that Trump is claiming remains bogus:
Remember: The legal authority for these tariffs rests on the claim that Trump is responding to an “unusual and extraordinary threat.”
But apparently that emergency doesn’t require an actual response until October? It makes zero sense, you guys. https://t.co/A4hvrSitcY
— Eric Boehm (@EricBoehm87) August 1, 2025
The White House continues to offer multiple, often contradictory justifications for why it has started a global trade war. “Some trading partners have agreed to, or are on the verge of agreeing to, meaningful trade and security commitments with the United States, thus signaling their sincere intentions to permanently remedy the trade barriers,” says the first executive order. “Other trading partners, despite having engaged in negotiations, have offered terms that, in my judgment, do not sufficiently address imbalances in our trading relationship or have failed to align sufficiently with the United States on economic and national-security matters.”
Remember, some MAGA types will claim that tariffs are necessary to jumpstart revitalized American manufacturing (which has not happened); others will claim this is how we get new revenue streams and fund government spending (which is, at best, a very long way off); still others will claim that it’s about correcting trade imbalances (which aren’t generally much of an economic problem); while still others will say that other countries are ripping America off and engaging in deceptive trade practices. But look: Team MAGA seems to have decided that settling on a clear, cogent narrative as to why we’re starting a trade war doesn’t matter. And the American consumer has not yet felt the full effects of our new tariffed reality. So for now, it’ll be businesses at home and abroad that must be responsive to the ever-changing whims of the president (and customs authorities), unable to plan for the future and anticipate what costs of doing business look like in the coming months and years.
Postmortems: Now that a few months have past since the great Elon Musk/Donald Trump breakup, and DOGE has winded down, many pundits seemingly antagonistic to the very mission of government-cutting have decided to take…well, not quite a victory lap, but an opportunity to issue scathing indictments of the engineers’ decision to wean other countries off of U.S. foreign aid.
The Bulwark‘s Jonathan V. Last spends several paragraphs talking about 23-year-old DOGE engineer Luke Farritor, indicting him for the crime of being “privileged”—he was homeschooled, and used AI to decode an ancient scroll (winning the Vesuvius Challenge), and was recruited into the University of Nebraska’s Raikes School, and got an internship at SpaceX—before holding Farritor personally responsible for the dismantling of the U.S. Agency of International Development (USAID).
In this case, privilege seems to mean being smart and idiosyncratic and having parents who allowed you to do all the coding your heart desired. I’m not sure when that became a bad thing, or when Farritor claimed to have been a scrappy underdog who’d long been ignored and neglected.
“Now that USAID is gone, people are dying who otherwise would not have. This is a simple fact. How many? Who knows. One epidemiologist says that 300,000 people have already died because USAID cut off services. And maybe that’s right. But maybe the number is only—can you believe we would say ‘only’?—100,000 or 50,000,” writes Last (headline: “The Boy Genius Who Killed 14 Million Poor People”). “Fifty-thousand, by the way, is the total enrollment at the University of Nebraska. So in one of our optimistic scenarios, Farritor only helped kill the entire population of his alma mater….On TNL I said that Farritor’s actions are within shouting distance of war crimes and maybe that’s going too far. But if so, how would you describe the moral culpability for a man who casually destroys a program that will result in the deaths of millions without even achieving his stated aims of saving money?“
Nowhere does the article contend with the question of what America’s obligation to the rest of the world is, or whether American taxpayers supported these expenditures, or whether the taxpayers were in any way served by these expenditures, or why the many international aid organizations that exist couldn’t step up to fill the void. I am sympathetic to the notion that pulling USAID funds all at once was a bad call, as it failed to allow for transition time or for other organizations to pony up and maintain service, but not to the idea that the DOGE engineers are essentially culpable of “war crimes.” Imagine the theatrics if the Trump administration (or any future admin) tries to touch Social Security—which will, at some point, be necessary.
Scenes from New York: “Zohran Mamdani skipped the vote on the one bill he passed this year as a state lawmaker,” reports The New York Post. The legislation, which came up for a vote on June 13 (when Mamdani was campaigning for mayor), would “extend enhanced public input requirements for certain regulatory decisions made by state agencies” and passed easily with only one person voting against it.
Looked at one way, this is a good thing: The less socialists do, the better. Looked at another way, Mamdani is politically inexperienced and committed more to advancing his own career path through the halls of power than to passing laws. It says something about his character that he’s so uninterested in doing the job of state assemblyman.
QUICK HITS
- Here’s Kyla Scanlon talking with Ezra Klein about the attention economy, the end of predictable progress, and how badness functions, as described by C.S. Lewis in The Screwtape Letters. “It’s this demon called Screwtape. And he’s writing these letters to his demon nephew, Wormwood. It’s all about how you demonize this human. Wormwood has a human within his care. His whole thing is to bring him into hell and away from God. And the way that you demonize someone—you’d think you’d want them to go kill somebody, right? That’s how you would think of it. But it’s really just keeping that person stagnant. All of Screwtape’s letters to Wormwood are about keeping him from feeling anything. Keep him in one place, don’t let him fall in love or get passionate. Just keep him baseline and bored. Don’t let him do his prayers. Let him forget all meaning and purpose within his life. That’s when he will come to us, the demons. And toward the end, Screwtape gets mad at Wormwood, and they eat each other, essentially. It’s a good metaphor for how badness moves through the world.&tag=reasonmagazinea-20”
- “President Donald Trump on Thursday reestablished the Presidential Fitness Test for American children, a fixture of public schools for decades that gauged young people’s health and athleticism with 1-mile runs, sit-ups and stretching exercises,” reports the Associated Press. “‘This is a wonderful tradition, and we’re bringing it back,’ Trump said of the fitness test that began in 1966 but was phased out during the Obama administration.” With all due libertarian apprecation for not wanting to impose federal standards, I have to say that I can’t get upset about expecting children to meet minimum standards of physical fitness.
- “In the past decade, the number of Bangladeshi Americans who have flocked to the [New York City] Police Department’s ranks has exploded, marking the latest chapter in the long story of immigrant groups who have found a home—and a foothold in America—in the nation’s largest police department,” reports The New York Times.
- “The unemployment rate, which Fed Chair Powell said earlier this week is the ‘main number’ to watch, also edged up, even as the labor force shrank for a third straight month,” reports Bloomberg on July’s numbers. “The main takeaway from the jobs report is that labor demand appears to be falling faster than labor supply—the labor market is not ‘solid,’ as Powell characterized it earlier this year, and we expect him to revise his opinion accordingly. We see growing chances of an earlier rate cut than our December base case.”
