Rather than the usual news, we thought we'd take advantage of a little breathing room to try to gather our thoughts on "Liberation Day" and the days since. There is so much noise, and so much ideological screeching. Look not for an opinion here, since your correspondent—genuinely—does not have one. We offer these observations without further commentary.

Observation One. It is, it seems to us, uncontroversial even among economists that the US dollar is structurally overvalued, by as much as 10 or 20%, relative to the value economic fundamentals would dictate, due to its status as the reserve currency. This poses a significant challenge to US manufacturing. We should note that the US is the reserve currency fundamentally because of its status as a superpower—this is not "the free market." Perhaps tariffs are a bad instrument for dealing with this reality, but it seems strange to ignore it, or to pretend that ignoring it is "the free market."

Observation Two. The United States of America has a national security interest in strengthening its manufacturing base, not just in directly military applications (though it has fallen behind in these), not just in the inputs of military hardware (such as steel and semiconductors), and not just in dual-use technologies (semiconductors again, ships). The point of a manufacturing "base" is that it creates an ecosystem of transferable skills, technologies, infrastructure, and so on that allows one to meet manufacturing challenges not just when it comes to a particular widget, but when it comes to widgets you may find out you need at a later date (drones being a perfect example).

Observation Three. Predictability is good. This is a common argument, and it seems sound. If you want a "reshoring" strategy to work, there needs to be a credible signal to market actors that the policy change will remain over the long term. A one-time tariff and market actors will either just eat the loss or disinvest but not change their manufacturing strategy. This is a perfectly valid criticism of "Liberation Day" and more generally President Trump's highly unpredictable leadership style.

Observation Four. This is the counter-argument to Observation Three. You go to trade war with the Trump you have, not the better Trump you wish you had. Less glibly, policy instruments that we may see as optimal (such as a destination-based cashflow tax) require Congress. The state of American law and politics are such that the White House has the tariff tool at its disposal, and not many other tools, and Congress's ability to legislate is very reduced.

Observation Five. Donald J. Trump's negotiation style, whether one likes it or not, has the same outline: open with unreasonable or eye-popping demands or threats, which then crack open a negotiation, which, surprisingly often, ends with a very reasonable "deal."

Observation Six. The game theory of Liberation Day is sound. Israel has come to the negotiating table. The EU has come to the negotiating table. South Korea has announced that they are engaging in bilateral negotiations with the US, are willing to unilaterally drop their tariffs, and are rejecting other Asian nations' suggestion to put together a common negotiating position. The White House's strategy is beginning to appear in focus: tariff everyone (and they really did mean everyone) and then create a race to see who can get a deal first and negotiate better terms. Maybe this is a disaster in waiting. Or maybe there is logic to the madness.