Wall Street Journal columnist Allysia Finley imagines how a devil might counsel a Trump advisor. A slice:
If he starts to succumb and—hell forbid—strikes trade deals, remind him of the gargantuan trade deficits the U.S. runs with other countries. Of course, the trade deficit is a meaningless number. That’s the point. It will distract Mr. Trump and make him think the U.S. is being taken advantage of. Our purpose is to increase U.S. trade barriers, not lower foreign ones.
Scott Lincicome is correct: Donald Trump simply likes tariffs. Four slices:
One Wednesday, Donald J. Trump used one of the world’s largest megaphones to announce his bold plan to end vast U.S. trade deficits, lower income taxes, and boost growth by taxing foreign nations that have cheated on trade to enjoy unprecedented surpluses at America’s expense.
The year was 1987.
Trump’s comments appeared in a full-page ad that ran in the September 2, 1987, print editions of the New York Times, the Washington Post, and the Boston Globe, but they could’ve been printed almost verbatim today. Back then, of course, Japan—not China (“CHYNAH”)—was the target of Trump’s trade ire, but the ad’s themes are almost identical to those on display at Trump’s now-infamous Rose Garden unveiling of his grand “reciprocal tariff” regime—the culmination (for now, at least) of two months of executive branch actions that would’ve increased the scope of U.S. tariffs by almost tenfold.
Since that announcement, markets have gyrated wildly, while dozens of White House officials, media surrogates, and online personalities have offered a wide range of reasons—often contradictory—for why Trump has done what he’s done (all without Congress, of course). Even Trump’s surprise decision today—pausing the worst of the new tariffs but keeping a 10 percent global one in place—is supposedly all part of the plan (whatever that may be).
In reality, however, the reason Trump’s doing this stuff is likely much simpler than what his defenders suggest: He just likes tariffs and always has, and everything else you read and hear about them is just reverse-engineered pabulum to fit (or hide) that singular motivation.
Trump’s views on immigration, health care, taxes, foreign interventionism, and many other things have changed since the 1980s, but his views on trade have never wavered: It’s a zero-sum game; trade balances tell you who’s winning and losing (surplus good, deficit bad); foreign governments are cheating to win; and tariffs—beautiful tariffs!—can turn the tide in America’s favor, boosting jobs, exports, and growth along the way.
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The backlash [to Trump’s “Liberation Day” tariffs] even extended to the economists the Trump administration itself cited to justify its tariff calculations, with many of them openly disagreeing with both the process and results. As one put it, “There’s not a lot of trained economists I know of, including myself, who would argue that trade imbalances are an important metric for policymaking. Yet the people who are setting policy have decided it’s a really important metric.” Another took to the New York Times to lambaste the White House’s efforts, saying that he disagreed with the general policy and that they got his research “very wrong” in multiple ways.
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That Trump has maintained his trade views despite piles of evidence to the contrary and numerous attempts to convince him otherwise—and that those views are singlehandedly driving policy today—is a depressing dynamic for wonks like me, but it’s nevertheless important.
For starters, it should make us very skeptical of popular online theories that U.S. tariffs are part of some grand, multistep strategy instead of just clumsy and ill-justified protectionism (that also helpfully gives Republicans some money for tax cuts). You’ll hear, for example, that Team Trump actually using the tariffs to engineer “true free trade” (whatever that means), to battle China, or to advance a brilliant and complex plan to rewire the global financial system. Yet, leaving aside some of the rather serious practical and technical holes in these theories, embracing them requires us to disregard decades of Trump’s public and private statements, years of actual Trump policy, the long-held views of Trump’s closest trade adviser (uber-protectionist Peter Navarro), the sidelining of the guy Wall Street thought would keep tariffs in check (Scott Bessent), the wildly contradictory messaging of Trump-whisperers inside and outside the White House, the latest tariff pause (which came after the tariffs hit and seemingly took everyone by surprise), and the not-insignificant fact that there’s been no evidence that the guy actually calling the shots actually wants to achieve any of these other, “strategic” objectives (if he’s even aware of them?). So, either these amazing 3D chess plans are the best kept secret in Washington—one chock-full of intentional feints and distractions—or good ol’ Occam’s Razor applies.
My money’s on Occam.
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Finally, Trump’s stubborn, peculiar views are a stark reminder as to why, in retrospect, Congress should never have put so much unchecked tariff power into the hands of the president—any president—and why, even after today’s short pause, it should act now to take some of that power back, by veto-proof majority if needed.
However, no consensus or even significant coalition exists for trying to force into existence a new American “golden age” with tariffs, which anyway is like asking a chicken to give birth to a lioness. He invented this mission out of his own confused intuition.
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Historian and author Niall Ferguson this week chose the adjective “full retard” for Trump trade policy. I go with “neurotic” for the word’s wider applicability to any leader who, lacking a clear bead on his times, fabricates a gratuitously ambitious mission to meet his misguided sense of importance.
If terrifying anyone who retains the capacity for rationality was the goal of Trump’s global tariff spree, he has secured his objective.
Released just one week into a campaign to rebalance the global trade regime in ill-defined ways via the threat of mutually assured destruction, the closely watched University of Michigan consumer sentiment survey found that fear reigns. Consumer confidence collapsed by 40 percent to a 45-year low in April. Not since 1981 have voters expected at this rate that inflationary pressure will steal from them their purchasing power — not even under Joe Biden, when inflation actually reached a 40-year high. Not since 2009 have this many Americans — two-thirds, to be precise — anticipated that high unemployment would once again characterize the economic landscape.
There will be plenty of Trump supporters who relish (or believe they must pretend to relish) the apprehension the president’s manic tinkering with the global economic order has inspired in their neighbors. They, too, might equate fear with power. But the public’s rational and foreseeable response to fear will only diminish the president’s political authority.
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People are scared. They’re unlikely to reward the author of their anxiety with good political fortune. A politician interested in the preservation of his and his party’s political prospects should be expected to recognize that and respond accordingly. It is, however, not at all clear that Trump sees just how “yippy” the public has become. It’s even less certain that the president can swallow his pride and subordinate his unshakable belief that foreign “trade is bad” to the observable consequences associated with shutting it off.
“That new charge on your bill? Call it a ‘this tariff isn’t our fault’ fee.” A slice:
Some business leaders—such as BigBadToyStore’s founder and president, Joel Boblit—are emailing detailed letters to their customers explaining how the tariffs will affect their supply chains. On Wednesday evening, after Trump paused most tariff increases but not for China, Boblit told customers that the Wisconsin company would apply a tariff-related fee to preordered items.
“I absolutely hate increasing prices to you, but the tariff situation is beyond our control,” he wrote, pledging to reduce or remove the charge if the tariffs declined.
He told customers they could cancel if they didn’t want to pay the additional fee. The charges would be 15% to 40% of the preorder price, he estimated.
Mr. Trump’s America-first policy, as hallucinated by trade adviser Peter Navarro, is this: Make in America. Invest in America. Everything done by Americans. A self-sufficient, stand-alone country.
It’s more of a political agenda than an economic one—more about protectionism and isolationism. Trade? Globalization? Increased living standards? How quaint.
Perhaps Mr. Trump doesn’t like that exceptions are a tacit admission that tariffs will make American companies less globally competitive, especially in the artificial intelligence race. That explains the exemptions for ASML’s chip-making equipment and Nvidia’s graphic processing units. Mr. Trump first makes U.S. companies less competitive, then he and his Administration pick exceptions worthy of help to remain competitive. Politicians, not success in the marketplace, pick business winners and losers.
Exemptions would also undermine the Administration’s legal justification that his tariffs are needed to meet a national “emergency.” Imports of glassware and umbrellas from China are an emergency but imports of electronics aren’t?
All of this exposes the political nature of tariffs. Some industries benefit but others don’t. Too bad if you make shoes, or clothing, or thousands of other consumer products that must pay the tariffs but lack the political or market clout to win exemptions. Too bad, too, if you’re a small manufacturer that relies on a component from China but can’t afford a K Street lobbyist.
Welcome to the new tariff economy, where you still pay onerous taxes, endure punishing regulation, and now must also navigate the political minefield of arbitrary tariffs.
Washington Post columnist Catherine Rampell rightly criticizes Democrats for their mealy-mouthed hypocrisy on tariffs. Three slices:
His [Trump’s] tariffs imposed so far are estimated to raise a typical household’s annual costs by $2,700, with lower-income Americans shouldering the biggest burden. That’s only a subset of the damage. Recession risks have surged, companies have begun furloughing workers, and our once-close allies are flipping us the bird.
If this is a curse to the U.S. economy, it should be a windfall for Democratic politicians. Instead, Democrats are blowing their good fortune.
Rather than shouting from the rooftops that trade wars are bad, Democrats babble in “yes, buts.” Yes, these particular tariffs are costly and regressive, they say, but when Democrats impose tariffs, somehow they present no such downsides.
The most obvious cognitive dissonance relates to Trump’s first-term tariffs. Democrats assailed these policies in the 2018 midterms and 2020 presidential election — shortly before adopting them as their own.
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Other Democrats, such as Massachusetts Sen. Elizabeth Warren, assert that the real problem with Trump’s tariffs is that companies will use them as an excuse for “price gouging” and profiteering. The stock market massacre suggests investors don’t agree tariffs will be profitable. But even if Warren’s critique were true, the same logic should apply to the Biden-née-Trump tariffs Warren backed.
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How did Democrats back themselves into this corner? Partly they’re pandering to pro-tariff constituencies (i.e., unions, once reliable Democratic allies). Populist, anti-“neoliberal” think tanks have also overtaken the party. These often employ political operatives churning out pseudo-scholarly research, which the media then credulously cites.
Juliette Sellgren talks with Daniel Hannan about all things government.
