Robots did not overtake the world. But what about artificial intelligence?

Labor markets have been upended over the centuries by technological change.  Only John Henry could compete with the steam-powered drill, and he paid dearly.  In the not too distant past, there have been concerns about the impact of software and robots on wages and employment.  Now the big worry is artificial intelligence.

Stanford economics PhD student Michael Webb has developed a framework that can evaluate the impact of new technologies on different occupations by matching words between patents and job descriptions.  Looking at data between 1980 and 2010, he found wages and employment declined the most in jobs that were most exposed to competition from software (broadcast equipment operators) and robots (forklift drivers).  These are jobs that do not require a college degree.

Based upon patents related to AI, Webb finds that the occupations most likely to be endangered include clinical laboratory technicians, chemical engineers, and optometrists.  All of these jobs require post-secondary education.  Overall, the risk of displacement from AI is greatest for those with college and graduate degrees.

Technical change and globalization have resulted in the loss of a number of middle class jobs.  AI could be coming after the upper income brackets.

Economic actions to fight the coronavirus

The expected economic damage from the coronavirus is starting to become apparent.  Many sectors of the economy have shut down or will do so soon.  Within 48 hours of Governor Cooper’s announcement that closed bars and restaurants in North Carolina, 18,000 people filed for unemployment benefits.  This is more than the number that filed in all of February.  These numbers will only accelerate in the coming weeks.  

The need for economic action is now, but what actions will best serve our citizens?  Many in Washington are calling for a replay of the actions that were effective in past recessions, including cuts in payroll taxes, direct payments of $1000 to all citizens, bailouts to specific companies, and lower interest rates.  

The generals of our economy are fighting the last war.  Although everyone no doubt will like having Washington send them an extra $1000 to $2000, most of those checks will be saved, not spent because most of the service economy is shut down.  Payroll tax cuts will help those with jobs to a small extent but will do nothing for those out of the labor force.  A further problem with these approaches is that they are not targeted toward those who will have the greatest need, especially those unable to work and without savings to tide them over.  Owners of small and medium size businesses are at risk as well.  

From an economic perspective, I see three challenges that can be addressed through wise policies: public health, income maintenance and financial stability.  On the public health front, Congress needs to make sure that Dr. Anthony Fauci and his colleagues get whatever they say they need, including test kits and vaccine research support.  The bill passed last week is a good start.  

Income maintenance can be achieved through a variety of actions, but the primary focus should be on expanding the eligibility and generosity of unemployment benefits and making paid sick leave more widely available.  The average unemployment benefits check in North Carolina is $250 per week and they run out after 20 weeks.  Thanks to actions taken by the NC General Assembly to reduce benefit generosity in 2013, the state system has $4 billion in the bank.  It is time to put that surplus to work.  

The Federal Reserve will need to think outside the box on financial stability.  Job one will be to maintain liquidity in financial markets, just as it did in the Great Recession.  But the virus poses an additional challenge.  Businesses such as airlines and hotels were healthy a month ago and will be healthy again in six to 12 months.  Owners of hair salons and local restaurants operate on thin margins and many have little in the way of savings to fall back on.  What can we do to keep them going in the interim?  

Some politicians are calling for direct payments to the companies.  A better idea would be to loan Delta Airlines and Marriott Hotels the funds needed to pay off loans and roll over bonds over the coming months, with the Fed or Treasury accepting planes and buildings as collateral.  The Fed ended up in the mortgage market in the Great Recession; it may need to provide bridge funding to some cruise ships and casinos this time around.  Special programs for small to medium size businesses will be needed as well.  

Whisky business: tariffs and their consequences

In March 2018 the US imposed tariffs on steel and aluminum imports.  In reaction the European Union imposed tariffs on American goods to maximize political damage to Republicans, including tariffs on bourbon made in my home state of Kentucky.  In response the US announced in October new tariffs on Scotch whisky and French wine.

In a recent WP column, Catherine Rampell examined the consequences of this escalating tariff war.  Overall US whisky exports dropped 16 percent while EU exports fell 27 percent.  There also are domestic losses associated with declining wine and Scotch imports -- namely fewer jobs and lower profits for the firms that import, transport, and retail the goods in question.  

In the meantime employment in primary metals manufacturing is actually down since the US started this escalating tariff war, which is proving not so easy to win.

Powell on labor force trends

Today's WP summarizes FRB chair Jerome Powell's analysis of why the labor force participation rate of prime age adults has (1) declined over the last 60 years and (2) become lower than the rate in most other well-to-do nations.  This is an important issue for the prospects for continued economic growth.    With the unemployment rate at all time lows and job vacancies exceeding the number of job seekers, future gains in GDP are contingent on more people entering the labor force.

In the 1960s, virtually all men between the ages of 25 and 54 worked or were looking for work.  Today that rate has gone down to 89 percent.  Labor force participation hinges on the rewards for working versus the value of not working.  One might argue that the rewards for not working have risen, leading to more labor force dropouts.  But single men do not qualify for many income maintenance programs and the inflation-adjusted payout from these programs has declined over the last 40 years.  Also, income maintenance programs are far more generous in Western Europe than the US.

Powell points to two trends that have driven more men to drop out of the labor force: education and opioids.  Today's jobs require more skills than those one or two generations ago, but education levels have not kept up.  Research on the impact of  opioids is just getting geared up.  To date it shows a correlation between low (high) labor force participation with high (low) opioid use across communities.  This begs the question of which came first.

To this list I would add two more items: a declining marriage rate and video games.  Married men are more economically active and make higher wages than unmarried men, although again establishing cause and effect here is challenging as women are less likely to marry men who are unlikely to contribute to a household's economic well-being.  As for video games, research shows they provide a low cost mechanism for passing time with some social interaction that increases the payoff for not working.  

Saving NCAA men's basketball

This has been anything but a great season.  There is no Zion Williamson or Anthony Davis on the court.  The ACC has three good (not great) teams and then a lot of mediocrity.  Most other conferences are the same way.  Lots of fouls getting called and lord help us when the officials have to visit the monitor to review a play.

Mark Story, a sports columnist for the Lexington Herald-Leader (which along with the Kentucky Sports Radio blog are your go-to sources for the winningest team of all time) has some great suggestions on how to improve the game:

1) Let players who enter the NBA draft and are not selected return to college.  This would shift some talent back to the college game that will otherwise play overseas or in the NBA G League.

2) Let players make endorsement deals.  It's their name and number on the t-shirt; give them a cut of the action.  Again this will make a difference for the stay-in-school versus bolt-for-overseas decision.

3) Reduce the use of video replays.  Story recommends giving each coach the right to request two replays per game.  I would add this -- require replays to be complete in two minutes.  If there is not a clear case for overturning a call by then, the call should stand.

Trade deficit shrinks, so what?

The trade stats for 2019 show that the trade deficit shrank by $11b, a 1.7 percent drop.  This is an economically significant number.  But what does it mean?  Trade deficits reflect the difference between exports and imports.  They shrink if exports grow, holding imports constant, or if imports decline, holding exports constant.

Nothing is ever held constant in the real world, however.  In 2019 the volume of both exports and imports became smaller, reflecting the trade barriers created by the US and some of its trading partners.  But imports declined more than exports, so the deficit shrank as well.

Are we better off with a smaller deficit?  Exporters would say no.  Nor would the companies with global supply chains that have had to play guessing games with tariff timing and exemptions.

Protectionism has sprouted up in a number of countries as part of a portfolio of nationalist, inward-looking policies.  Politicians promised that trade wars would lead to domestic job growth.  So far, there is no evidence in the US of a recovery in manufacturing in response to a smaller volume of imports.

Should we get used to slower growth?

Yesterday's GDP report indicated that growth slowed to 2.1% in 2019:4.  This is basically the same rate as prevailed in the last two quarters.  Most economists believe this indicates the long term growth potential for the US because (1) the economy is at full employment, (2) labor force growth is likely to remain modest because of population aging and immigration restrictions, and (3) declining productivity growth.

Will this be the new normal?  It is clear that the cut in corporate taxes in 2017 so far has not launched the GOP-promised surge in corporate investment.  The stimulus from the household tax cuts is in the rear-view mirror.  As for the Fed, it is hard to cut interest rates when rates are near zero.

Coronavirus may very well result in a dip in GDP growth in 2020:1 and election uncertainty could be a drag for the coming year.  On the plus side, 3.5 percent unemployment has resulted in rising incomes for those who have not fared well since the Great Recession.  Continuing that trend would be no small accomplishment.

Records of the year

Now that we know that the Grammys are rigged, where can you find the best music?  As the former rock critic of the Michigan State News, I offer you my favorite albums of 2019:

1.  FKA Twigs, "MAGDALENE," a blend of R&B and electronics with a dash of medieval church music and hip-hop
2.  Sharon van Etton, "Remind Me Tomorrow," following in the steps of Bruce and Bon Jovi in the Jersey pipeline
3.  Weyes Blood, "Titanic Rising," songs about romance in our digital age
4.  Angel Olsen, "All Mirrors," Asheville's own keeps turning out amazing stuff
5.  Lana del Rey, NFR, I cannot spell out the title for this PG blog
6.  Jamila Woods. "LEGACY! LEGACY!" tributes to artists who inspired Woods including Zora Neale Hurston, Miles Davis and Frida Kahlo
7.  Aldous Harding, "Designer," the best yet from this singer-songwriter from New Zealand
8.  Stef Chura, "Midnight," the next great rocker from the Motor City (but she is originally from the U.P.)
9.  Sleater-Kinney, "The Center Won't Hold," still going strong after 25 years
10.  (tie) Big Thief, "Two Hands" and Thom Yorke, "ANIMA," it would be wrong to leave one out.

The careful reader will note that the performer on all but one of these albums is either a female solo act, a band consisting entirely of women, or a band fronted by a woman.

Honorable mentions (multiple playlist-worthy tracks): Floating Points, Crush;" Black Keys, "Let's Rock;" Jenny Lewis, "On the Line;" Billie Eilish, "WHEN WE ALL FALL ASLEEP, WHERE DO WE GO?"

AND WHY THE ALL CAPS IN SO MANY ALBUM TITLES?

And U.P. stands for Upper Peninsula (of Michigan).

Let's make a trade deal 2: China

To evaluate the trade agreement with China that was signed last week, the fairest comparison to make is between where trade relations between the US and China stood on Inauguration Day 2017 and where they stand now.  On Inauguration Day 2017 the US had negotiated the Trans-Pacific Partnership with Australia, Chile, Japan, New Zealand, Peru, Singapore, Vietnam, and four other countries in the Pacific Rim.  It would have lowered or eliminated tariffs and other trade barriers among the partners and posed a strong counter-weight to China's ambitions.

Since that time, the US walked away from TPP and the remaining 11 members signed the agreement on their own. The US started imposing tariffs on China, which countered with its own tariffs, including significant tariffs on US agricultural products such as soybeans.  In game theory, this is known as a tit-for-tat situation, where each side replicates the moves of its opponent and there is a risk that both parties impose tremendous costs on each other.

So where are we now with last week's trade agreement with China?  The best news is that the tit-for-tat tradeoff has moved in the opposite direction; both sides have agreed to de-escalate and roll back some of the tariffs.  The not so good news is that (1) there are still a lot of tariffs and (2) businesses face uncertainty about future tariffs, which will slow investment and make sourcing decisions riskier.

The good news for American farmers is that the Chinese say they will buy more agricultural products from them.  That might mean US taxpayers will not have to send another check to farmers to offset the damage from the tariffs.  The not so good news for Brazilian farmers is that their sales, which surged when the tariff war started, will now drop off.

The good news is that the new agreement has stiffer rules for intellectual property protection in China.  The not so good news is that words on a page need not be strictly enforced by the Chinese government which has its eye on who will win the 2020 election.

Bottom line: Are we better off with this trade agreement compared to another tit-for-tat escalation?   Most definitely.  Are we better off compared to Inauguration Day 2017?  Definitely not.

Let's make a trade deal 1: USMCA

Now that all three countries have approved USMCA (US-Mexico-Canada agreement), what should we expect?  The best analysis I have seen to date comes from the Cato Institute's rating of which parts of USMCA will be helpful, which will be ho-hum and which will be dreadful.

Economically speaking, the best news is that the difference between USMCA and NAFTA is fairly modest.  President Trump did not terminate NAFTA, as he had threatened.  The one tangible gain from USMCA is that Canadian markets will be more open to US agricultural products, including wine.  This is great news for Wisconsin dairy farmers, who could have a large voice in whether the President will be around to make more trade agreements in 2021.  There also appear to be improvements in using regulations to create trade barriers, improving dispute settlement procedures and boosting digital trade.

The worst news is that automobiles are going to cost more.  To import a car from Canada or Mexico duty-free, 75% or more of its value must be created in North America, up from 62.5% under NAFTA.  That means fewer parts will come from Asia and manufacturers will have to shift to higher-cost suppliers in North America.  Also on the minus side, there is a sunset clause that could lead to the entire agreement being renegotiated or terminated in six years.

The International Trade Commission did an analysis last April that projected a 0.12 percent in US GDP as a result of the USMCA.  Based on my visits to Mexico over the last 30+ years, I think the biggest gain from NAFTA is that it has helped open up the Mexican economy which has in turn led to dramatic increases in well-being, at least in urban areas.  Having a more stable, more prosperous neighbor does not show up in the GDP statistics, but it might be the biggest gain from these trade agreements.

Another great jobs report, but ...

Today we learned that employers added 145k to their payrolls while unemployment remains at historic lows.  One would think that when economists gathered in San Diego last weekend for the annual meetings of the American Economic Association, it would be laissez le bon temps rouler.  

Au contraire!  NYT reports that many leading economists are worried that the ten year expansion is near an end.  Concerns cited include large government budget deficits, trade wars and ultra-low interest rates.   The low rates discourage saving.  They also limit the ability of central banks to stimulate the economy in any future recession; when rates are close to zero already, you cannot lower them much more.

As of now, no prominent economists are predicting recession for 2020, but the consensus is that growth will slow down.  Keep in mind that no prominent economists were predicting the market crash and subsequent recession in 2008.

Have US markets become less free?

NYU economist Thomas Philippon has a new book (summarized here) out examining how a variety of goods have become more expensive in the US than in other countries at the same level of economic development.  Examples include airfares, cellphones, and internet access.  These goods were cheaper in the US than overseas twenty years ago, so what happened?

Philippon blames using monopoly power in the US and a growing commitment to free markets overseas.  The time needed to open a new business in France has shrunk from 53 days to 4.  Most US households face no more than two choices for internet service whereas consumers in France have five or more.  Philippon estimates that growing monopoly power in the US costs consumers roughly $300 a month.

Can economics explain the blackouts in California?

Power companies in California have cut off customers in an effort to prevent forest fires.  Typically we see power outages in places like Iraq or Venezuela, so why is this happening in a state with a relatively high standard of living.  I have seen five explanations that make some sense to me (see Tyler Cowan's recent column for another perspective):

1.  Climate change has increased the number and severity of forest fires:  I am no climate scientist, but this makes some sense.
2.  More people are living in housing that was built in areas with high fire risk: And if the risk is not priced properly by insurance markets, we could have a classic case of an externality where the true costs of building in these areas are underestimated.  Result: too many homes in places where they should not be.
3.  California has imposed so many constraints on utilities that they lack the resources to deal with fire prevention:  WSJ points out a number of green energy mandates along with difficulties in raising electricity prices (which are already among the highest in the nation, perhaps due in some part to the green energy mandates).
4.  A whole lot of trees would have to be cut down to mitigate the fire risk: This raises additional regulatory constraints, not to mention the cost.
5.  Liability for fires has shifted to power companies: This means they compare the cost of fire liability to the lost revenue from customers; guess which these numbers is a lot bigger than the other?

A sixth explanation cannot be totally discounted: executives at PG&E may very well be cut from the same cloth as those at Boeing, Facebook and Volkswagen in terms of the weight they have given to social responsibility.  NYT seems to think so and provides provocative evidence.

What's the way out?  Something will have to be done to spread the cost of updating PG&E equipment and cutting down gazillions of trees across a broad customer base, including areas not served by PG&E and areas not in any danger of fire risk.  I predict some combination of a rate increase and state-guaranteed bonds, but I would not be surprised if the state of California takes over PG&E.

Economics of customer service

Two great stories in last week's WSJ about management decisions regarding customer service.  One focuses on decisions in the private sector regarding "how far customers can be pushed before their heads explode."  This is a classic case of optimization using economic logic: reduce spending on customer service up until the point that the savings are offset by lost revenue from angry customers.

Specific examples: How many registers are open?  How many branches and nodes to put in the automated phone answering service?  How long does it take to talk to a real person?  Will the real person be empathetic and speak English well?  Firms are using the data they collect in real time to answer these questions.  One thing I learned is that companies are now using artificial intelligence to match the angriest customers (based on voice tone, syllables per second) with the agents who have the best conflict management skills.

The other story focuses on an institution where customer service has gone from poor to horrific: the Internal Revenue Service.  This year only 33% of calls dealing with compliance penalties got through.  The IRS budget has been cut and one of the responses under Presidents of both major political parties has been to degrade customer service.  Of course the IRS only looks at the situation from a cost standpoint; they do not have to worry about their customers going elsewhere.

Will the Fed's rate cut matter?

Yesterday the Federal Reserve cut the federal funds rate from 2.50 to 2.25 percent.  Financial markets reacted adversely, perhaps because they anticipated a larger cut or the prospect of more cuts in the future.

But what economic impact will this cut in interest rate have?  Chicago Booth economist Austan Goolsbee questions whether it will do much at all.  Lower interest rates historically stimulate household purchases of durables (furniture, appliances, cars, homes) and corporate spending on investment.  Goolsbee points out that interest rates have been at historically low levels for 10 years, so there is not likely to be much pent-up demand for durable goods.  Also, rates cannot fall much further from their current rates; zero is a lower bound!  Banks are not going to pay borrowers interest.  

Long term rates are just as low as short term rates, indicating the market expects interest rates to remain quite low.  Proponents of the rate cut argue that slower growth in Europe and China dictates stimulus in the US.  However, the rate cut also led to the dollar raising in value to its highest level in two years (not what we would have expected, by the way; lower interest rates usually imply a declining currency value).  If this holds up, expect net exports to decline which will further slow growth.  Also the interest rate cut is bad news for savers.

Two members of the Fed's Open Market Committee voted to not make any change in interest rates, believing that an economy with 3.5 percent unemployment does not need any more stimulus.  If Goolsbee is right and the rate cut does not offset the drag from trade wars and slower growth in other countries, it will be interesting to see if the Fed doubles down on yesterday's action.

Were the members of the World Cup champion women's soccer team underpaid?

The top line numbers are hard to dispute: the women's team is much more successful than the men's team and they are paid a lot less.  If pay equity decisions revolve around the principle of "equal pay for equal work," this is an open and shut case.

I spent some time recently trying to dig deeper into the question to see if there is a rational economic explanation.  Here is a quick look at the key determinants of pay for the men's and women's national soccer team:

1) Performance: Easy comparison here because the men did not even qualify for the 2018 World Cup and received no prize money at all.  The women's team received $4m for winning the cup.

2) Pay method: Women earn a base salary plus bonuses for wins in qualifying and World Cup matches.  Men get per-match bonuses for being on the active roster but they receive no base annual pay.  WP did a simulation to see what would happen under a range of win-loss scenarios.  Under a median 20 game scenario, if they both won the same number and type of games, women would receive 11 percent less than men.   Pay would be equal in only one scenario: if both teams played 20 matches and lost every match.

3) Revenue: In pure economic terms, product demand has a critical role in salary determination.  That is why the Rolling Stones will make more money than Sleater-Kinney (an all-women's band for those not in the know) for playing the same number of concerts in the same arenas, even if Sleater-Kinney has made better music over the last 20 years.   If the women's team generates more revenue than the men's team in friendly matches and tournaments outside the World Cup, that will make the pay discrimination claims much stronger.  Half of the revenue for the US Soccer Federation comes from sponsorships.  It is impossible to determine whether the women's or men's team has been the main driver of this revenue source.  As for dollars generated by paying customers at matches, the answer depends on timing.  If you include 2014 (when the men participated in the cup), WP reports the men come out $11m ahead.  If you start in a later year and include 2019, the women have generated more revenue.  Lawyers on both sides will have lots of fun making arguments here.

4) Collective bargaining: The pay scale for each team is set through separate collective bargaining agreements.  Some have argued that the women would be well served by taking a stronger stand in the next round of bargaining.   Others would argue that they should not have signed off on an agreement where lower pay is basically baked in.

Bottom line: the women should not have to depend on winning the World Cup to obtain pay equity.  The disparity in the pay scales that is built into the collective bargaining agreements is the strongest argument the women's team has in its favor.  General Motors and the UAW could not legally have one pay scale for women and another for men doing the same jobs.  My guess is that US Soccer will either settle out of court or come up with a new collective bargaining agreement before this case appears before a judge.

What is the Nordic welfare state really like?

Bernie Sanders points to the economic success of Denmark, Norway, and Sweden as proof that socialism can produce high living standards.  WP reports about a study done by JP Morgan Chase showing that these countries are not as socialist as you might think.

Granted their payroll and sales taxes are higher than those in the US.  Labor unions are stronger and income is more evenly distributed.

But these countries are anything but socialist paradises:

• Out of pocket spending on health care in the Netherlands and Sweden is the same or higher than the US.  So much for socialized medicine.  
• Companies have just as much business freedom (free trade, openness to international investment, regulations for new business creation) in the Nordics as in the US. 
• Estate tax rates are lower in the Nordics than in the US.   

Money quote from former Danish prime minister Lars Rasmussen: 

Denmark is far from a planned socialist economy.  Denmark is a market economy.   

A goldbug for the Fed?

When I teach my Essential Macroeconomics for Managers course, I spend some time on exchange rates.  I emphasize the role of trade balances, inflation, and Federal Reserve policy, reflecting the consensus of economic research.  I spend no time on the gold standard, as research has shown that it makes economic growth and inflation less stable.  

President Trump has nominated Judy Shelton for a vacant position on the Federal Reserve's Board of Governors.  Dr. Shelton (PhD in business administration from Utah) advocates a return to the gold standard.  Greg Ip has a great WSJ column explaining her views, which are based more on politics than economics.  Her core belief is that the gold standard would impose fiscal discipline on Congress and the President and monetary discipline on the Federal Reserve.  She went ballistic in the aftermath of the Great Recession when quantitative easing led to a massive increase in the money supply and, she argued, an inevitable surge in inflation.  Guess what?  She and other goldbugs were dead wrong; inflation has been at rock-bottom levels for the last 10 years.

Now she is criticizing the Fed for keeping interest rates too high, claiming it is slowing down the economy.  This is hard to swallow in a world where 10-year Treasuries yield two percent and the June jobs report showed 224k new jobs last month.  Will she make it through tough questions at her Senate confirmation hearing?  Stay tuned.

Social Security news that all Presidential candidates are ignoring

Next year is going to be a big year for politics with the Presidential elections.  It also is going to be a big year for the Social Security system.  Why?  For the first time since 1982 payroll tax revenue will not be sufficient to cover Social Security benefits, as reported by NYT earlier this week.

Retirees should not worry, yet.  There is enough money in the trust fund to keep the system whole for 15 more years.  But then the federal government would have to reduce benefits by about 20 percent.

It is unlikely that both houses of Congress and the President will come up with a solution before 2021.  Every year when the problem gets ignored makes the pain (reduced benefits, tighter benefit eligibility, higher taxes, or some combination of all of the above) that much worse.  Modest delays in retirement age and modest hikes in the payroll tax will resolve the problem if these steps are taken now.

Although today's candidates would rather talk about building a beautiful wall or launching a Green New Deal, voters should be pressing them for answers regarding how to save Social Security.

Tariff update

The Trump tariffs have now been in place long enough that economists have had time to conduct rigorous research regarding their impact.  Three recent studies of note:

Washing machines: three economists at the Federal Reserve and the University of Chicago took a deep dive into the tariffs placed on washing machines.  They found that washing machine prices rose by 12 percent across the board in the US, imported machines went up just as much as domestically produced ones.  Also drier prices went up by the same amount, even though they were not subject to the tariff.  They estimate the cost to consumers to be $1.5b a year.  Samsung and LG are opening plants in the US and Whirlpool is adding jobs as well, but this amounts to 1800 new jobs at a cost of $820k per job.  Hope your washer and dryer hold up!

Economy-wide impact: another team from Columbia, the New York Fed, and Princeton looked at the collective effect of all the Trump tariffs.  They found the tariffs were passed on to customers 100% in the form of higher prices, resulting in a loss of $1.5b per month.   In addition, the tariffs imposed by China, EU, Mexico and others as counter-measures had an adverse effect on US exports of $2.4b per month.

Yet another team from Cal-Berkeley, Columbia, UCLA, and Yale reached similar conclusions.  Imports dropped 31.5% in markets covered by the Trump tariffs and US exports dropped 11% in response to retaliatory tariffs.

Does anyone notice a pattern here?  And what will happen if tariffs on China are ratcheted up even further in the next few days?