| The word of the day is “tariffs” as the world awaits specifics on what exactly President Donald Trump is planning next in his trade war. Here, Stacey Vanek Smith has some history about what happened when Argentina issued strict levies. Plus: Changes in Elon Musk’s empire, and why China is pushing vocational schools. If this email was forwarded to you, click here to sign up. On this “Liberation Day,” as Donald Trump has named it, before a 4 p.m. White House announcement on the president’s long-touted tariffs, I can’t stop thinking about Argentine peanuts. It might sound strange, but peanuts played a major role in Argentina’s 2011 foray into protectionist tariffs. Cristina Fernández de Kirchner, the president at the time, had a plan to make Argentina great again. A key part was bringing manufacturing back to the country. For some industries, this meant tariffs of 30% or higher on imported goods. In other cases—such as cellphones—it meant you couldn’t sell your wares in Argentina unless you made them in the country. (Stores in Buenos Aires stopped selling iPhones, forcing Argentines to smuggle the gadgets into the country when they returned from Miami, Madrid or elsewhere. Argentina still imposes tariffs on foreign-made phones.) Foreign automakers could export cars to Argentina but with a catch: They couldn’t add to the country’s trade deficit. This presented a major problem. The companies would need to start manufacturing in Argentina or find something they could import from the country to offset the cost of the vehicles they wanted to sell there. And here’s where things started to get really strange. Porsche wasn’t about to start building in Argentina. So its distributor started buying and importing millions of dollars worth of Argentine olives and malbec wine to balance out the Porsches it was selling. BMW bought enormous quantities of rice. Subaru gobbled up chicken feed. And Hyundai and Mitsubishi jumped head first into the peanut business. The auto giants cut deals with peanut farmers in central Argentina and began shipping tens of millions of dollars worth of peanuts to Asia and Europe. Global peanut prices soared.  A Fiat truck plan in Córdoba, Argentina, in 2001. Photographer: Marecelo Caceras/AFP/Getty Images The whole thing was nuts, but it worked for a while: Foreign companies were investing millions in the country. Some, like Fiat and Renaut, were building factories and hiring local workers, while others were bankrolling the nation’s vintners, soybean growers, chicken feed purveyors and peanut farmers. The Argentine economy flourished and so did consumer spending—car sales in 2010 and 2011 set records—growing almost 30% a year. The trade deficit dropped, employment rose, and soon publications like the New York Times and the Guardian were toasting the triumph of Kirchner’s economic plan. (The Times labeled it “Argentina’s Turnaround Tango.”) Then came the dip. All of the factory building and peanut farming got expensive, and carmakers began passing those costs on to consumers. Inflation started to climb. In 2011, a typical car in Argentina cost about $60,000; a year later, the price was more like $100,000. Sales slumped. At the same time, in-country carmakers were having trouble importing the materials and parts they needed, which led to quality issues, outdated models, paused production and, eventually, layoffs. Soon the country was in a full-on economic crisis, which it’s still climbing out of. So you can understand why, last week, when Hyundai announced plans to spend $6 billion to buy a steel plant in Louisiana to get around tariffs, my mind immediately went to peanuts. Trump celebrated the news as “a clear demonstration that tariffs very strongly work.” While it’s unclear exactly what Trump’s broader tariffs will include, levies of 25% on imported vehicles are scheduled to begin at 12:01 New York time on Thursday. And that has me worried. Of course, every leader of every country wants to control the economy. Who wouldn’t want to have some power over the stock market, food prices, the unemployment rate or economic growth? But history has shown us that trying to corral animal spirits comes at a punishing price. Large-scale economic controls often end in disaster. Sure, it might start off with shiny factories and cheering crowds, but before you know it, you’ve got a South Korean car company selling overpriced Argentine peanuts to France, and an economy in crisis. On the bright side, I have the perfect snack suggestion for today. Related from Trumponomics: The Roots of Trump’s Global Trade War | 
