Douglas Irwin recounts “the historic significance of Trump’s tariff actions.” A slice:
The McKinley and Fordney-McCumber tariffs were substantial additions to the already high existing tariffs. But their economic impact was much smaller because imports were a relatively small share of GDP. One of the biggest differences between a century ago and today is the growth of global supply chains and international production networks. These factors make trade, and particularly trade in intermediate goods and components, a much more significant part of the US economy today than in the distant past and tariffs a much greater disruption to the economy.
In short, the United States under Trump is acting a lot like China under President Xi Jinping. This is an unbecoming position for a liberal democracy that has long championed the rule of law and a rules-based international system. But, even assuming Trump has no moral qualms about imitating China’s bullying behavior, he should still have some practical misgivings. As noted in a 2023 report from the Center for Strategic and International Studies, China’s economic coercion is “not very effective.”
Most countries bullied by Beijing have turned against China and found alternative markets. In a Pew Research Center poll last year, 85 percent of Australians and 71 percent of South Koreans expressed unfavorable views of China. That is a massive turnaround from about a decade ago, before China launched trade wars against those countries. In 2015, Pew found that 57 percent of Australians and 61 percent of South Koreans had a favorable view of China.
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“Countries will get tired of this very quickly,” [Douglas] Irwin predicted, referring to Trump “constantly going up to the brink, threatening to impose tariffs, then going back, and returning to the brink again.” Such behavior, Irwin pointed out, “raises uncertainty for business, and business doesn’t like uncertainty.” Eventually companies will turn to other markets, and countries will turn to other trade partners. China is likely to be the beneficiary of Trump’s tariff tamper tantrums, which will convince many countries that the United States is no more reliable than Beijing as a trade partner.
Ryan Bourne and Marcos Falcone applaud the success of Javier Milei’s abolition of rent control.
For the first time in decades, the Swamp could face a genuine threat, as I hoped just before Trump’s second presidency began. That threat could be not just from a hostile president, but from a resurgent legislature and even from a public that now realizes the extent to which the federal government is misusing taxpayer dollars and abusing its powers.
But with my hope came a concern: that some figures, claiming to speak for the people, or even for Trump himself, would look upon the Swamp and rather than see something that needed draining would just see a host of new tenants. They would argue that “Republicans have been insufficiently enthusiastic about making themselves comfortable in the Beltway” in their unwillingness to make peace with the engorged state there.
Jacob Sullum reports on the lawlessness of Trump’s attempt to end birthright citizenship.
John Phelan reflects on the change in economic policy that began in the late 1970s.
