Liberation Day. It was supposed to mark
America’s economic independence. Instead, it kicked off a summer of chaos that ended
with your shoes costing 40% more and American manufacturers drowning in their own government’s
red tape. 3 months of threats and negotiations produced exactly what you’d expect. The entire
world quietly rrooting supply chains to avoid American ports. Today we’re digging into how the
trade war spiraled out of control, who’s getting rich off of the wreckage, and why September might
be even worse. My name is Nick and you’re watching the Coin Bureau. First things first, none of
this is financial advice. I’m just someone on the internet tracking how Liberation Day turned
into a liquidation summer. Do your own research, especially before making any trades based on some
YouTube videos. The tariff rates alone can change faster than we can actually edit. And if you want
more information and interesting content like this, don’t forget to smash that like button and
subscribe to the channel and ping that bell for good measure as well. Now, this year’s tariff
saga began with Trump’s campaign promises to restore American manufacturing through protective
trade barriers. The logic seemed straightforward. Make foreign goods more expensive and domestic
production becomes competitive yet again. Since April 2nd, what Trump christened Liberation Day,
we’ve been waiting for this to play out. But his manufacturing miracle, it hasn’t shown up yet.
Now, the Liberation Day announcement represented the most aggressive trade action in nearly a
century. A Trump unveiled his tariff spreadsheet with the theatrical flare showing threatened
rates ranging from 11% to 50% on dozens of trading partners. The highest rates targeted a
mix of strategic adversaries and geopolitical outliers. 41% on Syria, 40% on Laos and Myanmar,
and 39% on Switzerland. Switzerland. What followed was a 90-day negotiation period that felt more
like a hostage situation. Countries scrambled to cut deals while markets gyrated on every single
rumor. The whole spectacle culminated in the July 31st executive order that locked in the final
rates and triggered an immediate market meltdown. To understand why, we need to go way back to
April 2nd. Uh the April 2nd announcement sent immediate shock waves throughout global markets.
Trump’s tariff poster became the most expensive piece of cardboard in history as markets went into
freeall. The initial list showed America imposing an average tariff rate of 27%, more than 10 times
higher than the 2024 average of 2.5%. The 90-day grace period Trump granted wasn’t so much mercy
as psychological warfare. Countries had until July to negotiate exemptions or face economic
exile. Vietnam managed to secure talks for possible removal, but others weren’t so lucky.
The entire period demonstrated how uncertainty can be more damaging than the policy itself. The
absurdity peaked with Trump’s reciprocal tariff framework. As trade experts have noted, calling
these reciprocal was a bit of a misnomer. The rates weren’t based on what other countries
were charging America. They were calculated by dividing trade deficits by exports. It’s kind
of like calculating your restaurant tip based on how hungry you were before you started eating.
Now, Switzerland, with average tariff rates under 1% faced American rates of 39% because they
dared to run a trade surplus. The maths punished efficient exporters and rewarded inefficient ones.
Economists struggle to explain how making trade more expensive for everyone would boost prosperity
because the maths it wasn’t math in. So, after 3 months of threats and negotiations, the
final executive order dropped on July 31st. The definitive tariff schedule confirmed everyone’s
worst fears. It was trade policy by spreadsheet, maintaining crushing rates on major trading
partners while offering token reductions to countries that had prostrated themselves
during negotiations. The timing couldn’t have been worse. The order landed just as markets
were digesting disappointing earnings and weak economic data. August 1st saw sharp sell-offs. The
S&P 500 dropped 1.6% while the Nasdaq fell 2.2% 2% marking the worst day for markets in
months. But the stock market sell-off was just the appetizer. The currency markets went
haywire as the dollar paradoxically strengthened despite America declaring economic war on its
trading partners. Treasury yields fell sharply as investors sought safe haven assets and commodity
markets whipsared as traders tried to figure out which supply chains would survive. Real economy
impacts manifested immediately. Ford and GM, already struggling with the EV transition, watched
their input costs explode overnight. Apple warned of a $ 1.1 billion impact in the current
quarter alone. The National Association of Manufacturers reported that 89% of members faced
increase in costs, not from foreign competition, but from their own government’s protection. The
earnings calls following July 31st are revealing the damage in corporate speak. GM reported a $
1.1 billion hit from tariffs in Q2, contributing to profits falling 32 to 35%. CEO Mary Bar tried
to sound optimistic about quote adapting to new trade realities, but analysts weren’t buying it.
Small manufacturers are facing existential threats rather than quarterly disappointments. Unlike
corporate giants, they can’t absorb the sudden shock of a 50% tariff on essential inputs like
foreign steel. For firms with slim profit margins, these tariffs function as a death sentence
delivered by their own government. And companies aren’t bringing jobs back to America. They’re
actually fleeing American tariffs by moving production anywhere else. The agricultural sector
has discovered that export markets once lost don’t return very easily. China has already replaced
American soybeans with Brazilian supplies, and the European Union is accelerating trade deals with
South American countries. American farmers are finding themselves locked out of markets they’d
spent decades cultivating while simultaneously paying more for fertilizer and equipment. The
promised agricultural bailouts remain trapped in congressional gridlock. Farm state Republicans
face an impossible choice. Support Trump’s tariffs and anger constituents or oppose them and face
primary challenges. Most are choosing silence, hoping the problem will just go away by 2026.
Of course, many of the manufacturers crying about tariffs today are often the same ones who
spent decades shipping jobs to China. And there’s a certain poetic justice in watching companies
that hollowed out American industry for quarterly earnings now getting crushed by the consequences
of their own offshoring addiction. But the executives who made those decisions are lounging
on their yachts. Now, today’s factory workers and small manufacturers, the ones who stayed and
tried to compete, are the ones who are bleeding out. The tariffs arrived 30 years too late to
punish the actual culprits. A serious industrial policy would rebuild domestic capacity through
targeted investment and training. Instead, we got a consumption tax disguised as patriotism. The
tariffs, they don’t reverse de-industrialization. They actually accelerate it by making the
remaining American factories uncompetitive. It’s like chemotherapy that kills the patient
faster than the cancer. But while businesses and farmers bleed, the Treasury is collecting record
tariff revenue. In the first half of 2025 alone, the government collected over 87 billion in tariff
revenue, more than in all of 2024. A June’s haul of 26.6 billion was nearly four times January’s
intake. And this gives the administration its favorite talking points. Trump declared on
social media that tariffs were making America quote great and rich again, claiming that just
one year ago, America was quote a dead country, but was now the quote hottest country anywhere in
the world. The base loved it, but the fact that it was Americans who were paying those billions
was less advertised. Research on the initial tariff rounds revealed where exactly that money
was coming from. Chinese exporters lowered their pre-tariff prices by a mere 0.7%. The other 99.3%
fell on the American importers. The Treasury’s windfall comes entirely from American businesses,
dutifully passed on to American consumers. The average American household is facing $2,400 in
additional costs from Trump’s tariffs in 2025. Shoes and leather goods have jumped 40% and
apparel by 38%. The back tochool shopping season has become a financial nightmare for families
already stretched very thin. June CPI came in at 2.7% still within the Fed’s comfort zone.
But forward-looking indicators are screaming trouble. Import prices surged, producer prices
accelerated, and companies are warning of coming price increases as they work through pre-tariff
inventory. Housing costs, meanwhile, have exploded as Canadian lumber tariffs add thousands to new
home prices. Firsttime buyers, already priced out of the current market, are giving up entirely
as the American dream of home ownership retreats further into fantasy. Consumer behavior
is adapting predictably. A Walmart reports customers trading down to cheaper alternatives.
A dollar store traffic is surging as middleclass families join traditional lowincome shoppers.
The K-shaped recovery economists warned about has become undeniable reality. The Fed finds itself
trapped between inflation and recession. Raising rates to combat tariff induced price increases
would crush an already weakening economy. Keeping rates steady means accepting higher inflation. The
transitory debate has returned with a vengeance, except this time the inflation is policy induced
and seemingly permanent. Computer prices rose 1.4% in June. A seemingly modest increase that masks
the broader technology inflation building in the pipeline. Semiconductors already constrained by
supply chain disruptions are facing new price pressures from tariffs on components. Tech
giants like Apple and Microsoft are warning of significant margin compression, threatening
both innovation budgets and consumer pricing. Universities and research labs are reconsidering
international partnerships that had thrived for decades, suddenly finding collaboration
politically radioactive. Now Beijing’s reaction to all of this shows long-term thinking versus
Washington’s short-term chaos. Rather than engage in tit fortat escalation, China is accelerating
its dual circulation strategy, building domestic consumption while maintaining selective
international engagement. Beijing has its own leverage. The memory of how it used antitrust
law to bring Qualcomm to heal serves as a reminder for Silicon Valley. The possibility that Beijing
could crack down on patent enforcement has become an existential threat for tech firms reliant
on the Chinese market. Bricks expansion talks have gained sudden momentum. Indonesia, Nigeria,
and Thailand are expressing interest in joining a block that increasingly looks like a life raft
for countries caught in America’s crossfire. The DDOLization discussions that had been mostly
theoretical are gaining practical urgency. Chinese manufacturers are adapting rapidly.
They’re establishing operations in Vietnam, Mexico, and Malaysia to circumvent tariffs and
selling directly to American consumers through social commerce platforms, all while maintaining
market access as Washington fights yesterday’s war with tomorrow’s economy. Elsewhere, India
finds itself in a geopolitical vice. The Trump administration’s tariffs are explicitly linked
to India’s role in bricks with the president publicly calling India a quote dead economy and
citing its membership as justification for the penalties. What makes the punishment particularly
vicious though is its comprehensiveness. Other countries negotiating with Washington managed
to carve out exemptions for critical goods, pharmaceuticals, medical devices, electronics.
India got nothing, zero product level exemptions even for medicines that Americans rely on. And
this goes beyond trade policy into a sort of uh diplomatic mugging. The message is clear. Play
ball on Russia or watch your economy implode. The democracy Washington claims to champion is
being economically waterboarded for maintaining strategic autonomy. The policy has backfired
predictably. America’s attempt to isolate China is instead creating a coalition of the isolated
with India long courted as a counterweight to China now being punished for its membership
of a block where it actively wants to check China’s dominance. Meanwhile, India’s IT sector,
which exports $194 billion in services annually, is watching nervously as American companies pull
back on spending. The sector that had thrived on globalization is suddenly facing the prospect of
fragmentation with major outsourcing contracts under review and new deals frozen. But while
Main Street bleeds, Wall Street is finding ways to profit from the chaos. Unpredictable policy
shifts and tweet driven market swings create volatility that highfrequency trading desks
feast on. When every presidential tweet can move markets, algorithms are having a field day.
Private equity firms are playing on easy mode, waiting for distressed businesses to tap out. As
tariffs make input costs unaffordable, companies struggle with cash flow and PE firms swoop in
with rescue financing that strips assets and loads them with debt. Policy failure is great news
for the vultures of private equity. The contrast in corporate earnings tells the story. Financial
services thrive on volatility while manufacturers warn of catastrophe. The real economy and
the financial economy diverge further with tariffs accelerating the hollowing out of American
industry. Meanwhile, the dollar’s weaponization is motivating ddollarization efforts as central
banks reassess reserve strategies. Countries that tolerated dollar dominance as a necessary
evil are beginning to see it as an unnecessary risk. Europe, for one, isn’t rolling over. After
months of threats that saw potential tariffs climb to 30%, Brussels negotiated a cap at 15%.
But they kept their biggest gun holstered. The EU’s anti-coercion instrument, the trade bazooka,
gives them powers that make tariffs look quaint. We are talking about banning American companies
from bidding on European government contracts worth hundreds of billions of dollars, blocking
US investment in strategic sectors, even targeted import and export bans. The instrument was
designed after Trump’s first term to counter any economic bullying. The 15% deal papers over this
powder cake. European steel and aluminium still face 50% tariffs and French President Emanuel
Macron is calling the agreement quote unbalanced. If Brussels decides Washington is using tariffs
for political coercion, they could pull the trigger. The transatlantic relationship would go
from strained to severed. While bricks pay remains more PowerPoint than payment rail, existing
alternatives are scaling. China’s crossber interbank payment system was processing over
$90 billion daily by 2024. And these aren’t yet existential threats to dollar hedgemony. But the
direction of travel is unmistakable. Traditional US allies are building contingency plans. Canada
is exploring deeper Commonwealth ties. Mexico is strengthening regional partnerships. Even close
allies are pursuing agreements that hedge against American unpredictability. The legal challenges
to Trump’s tariffs regime have been mounting since day one. The entire structure rests on
the International Emergency Economic Powers Act or EA. The administration declared the US
trade deficit a national emergency and claimed authority to bypass Congress. EA was created in
1977 to restrict presidential power, not expand it. Congress passed it after discovering America
had been in a continuous state of emergency for 40 years under various wartime laws, giving
presidents a blank check. EA was meant to end that practice by requiring genuine emergencies
and regular congressional review. Federal appeals court hearings have exposed the novelty of this
interpretation. One judge observed that quote EPA doesn’t even mention the word tariffs anywhere.
The administration’s lawyer conceded that quote, “No president has ever read EA this way.” A lower
court already ruled Trump exceeded his powers. The case is now heading to the Supreme Court,
where justices will decide whether presidents can rewrite trade policy by declaring emergencies.
As of early August, the real economic impacts of Trump’s tariffs are beginning to manifest in
the US. The manufacturing PMI has registered 48% firmly in contraction territory. Services are
struggling to stay above 50. Consumer confidence is cratering as families feel the squeeze.
Corporate guidance is universally disappointing as CEOs have stopped pretending optimism is
justified. Capital expenditures plans are being slashed. The hiring freeze that began in tech is
spreading across other industries. Congressional Republicans facing brutal 2026 midterms are
beginning to distance themselves from tariff policies without criticizing Trump. Democrats
offer complaints but no coherent alternative. The bipartisan consensus on confronting China remains
intact even as methods prove self-destructive. The Port of Los Angeles is warning of disruptions.
While they’d managed the initial surge without a single vessel backed up, the July 31st
order changed everything. Importers racing to beat increases are creating demand spikes that
overwhelm infrastructure. The paperwork burden is meanwhile reaching epic proportions. Tariff
classifications are changing by executive tweet. Customs officials are struggling with constantly
revised guidance. Every shipment is becoming a compliance nightmare. The chaos of August 1st was
just the warm-up act. Trump has announced plans to raise the baseline tariff from 10 to 15 to 20%
with September bringing secondary tariffs of 40% on any country helping others dodging American
duties. The administration is investigating pharmaceutical semiconductors and copper for
targeted restrictions. Every sector keeping modern life functional is under review. Compliance
departments are hiring faster than tech companies are firing. At least there’s good news for some
sectors, I guess. Pen Wharton is projecting $5.2 trillion in tariff revenue over 10 years. Yale
estimates 2.7 trillion from 2026 to 2035. That’s trillions of dollars flowing from American wallets
to Treasury coffers, repackaged as patriotic duty. Financial markets are pricing in permanent
uncertainty. Credit spreads are widening. Yield curves inverting. The dollar’s apparent strength
masks reserve managers quietly diversifying. Smart money is positioning for regime change, political
or economic, whichever comes first. Private equity is already measuring distressed manufacturing for
coffins while preparing resurrection financing. Smooth holy parallels are impossible to ignore.
Those tariffs of almost a century ago didn’t cause the Great Depression, but guaranteed its
global spread. Modern supply chains make that look uh quaint. When just in time meets trade barriers,
failures cascade at fiber optic speed. So, here’s the first phase scorecard. 89% of manufacturers
are facing higher costs. Average households are down $2,400. Agricultural exports are in freeall.
manufacturing jobs disappearing faster than pre-tariff inventory. Global payment systems
quietly building alternatives to the dollar. But surely the next round of tariffs will fix
everything. I mean, they always do, right? Okay. If you enjoyed this trade war update, then you’ll
enjoy our latest video on the bricks. And that’s right over here. A spoiler alert, ddollarization
doesn’t need a unified bricks currency to play out. And if you’re not subscribed to the channel
yet, you can do that right over here. This is Nick signing off. Thank you guys very much for
watching and I’ll see you in the next video.
