The Editorial Board of the Wall Street Journal draws important lessons from Trump’s tariff ‘policy.’ A slice:
One of the (many) problems with tariffs is that they lead to countless and arbitrary exceptions for political purposes. President Trump’s latest came Friday as he announced plans to lift tariffs on beef imports for 90 days. You may notice that this covers the three months through the November midterm elections.
In a social-media post, Mr. Trump blamed Joe Biden for high beef prices and added: “As we work to rebuild this herd and help our ranchers, for the next 90 days, the United States will allow up to 300,000 metric tons of product for ground beef to be imported with no out of quota tariff.” He pledged that the imports will be sold at 25% below “current market prices,” which was about $6.89 a pound in July, up substantially in the last two years.
It’s nice that Mr. Trump is giving American consumers this reprieve, at least through the election. He knows he and Republicans are being blamed for higher prices. The break on imported beef is supposed to show he’s doing something about it, even if he is resorting to price controls on imports in the process.
The President said last year he had lifted tariffs on beef imports, and in February he allowed some 80,000 more metric tons of beef from Argentina. Clearly he understands the politics of tariffs and beef prices.
But he still won’t admit that these concessions to political reality are a tacit admission that his tariffs have failed economically and politically. The public is unhappy about higher prices and voters understandably think Mr. Trump’s ballyhooed tariffs are partly to blame.
The tariffs have become a political albatross for the GOP, and they have let Democrats recover from presiding over the Biden inflation that so hurt them in 2024. Democrats in Iowa of all places could pick up the Governorship, a Senate seat and two House seats this year owing to the damage tariffs have done to the farm economy.
Despite his claims that tariffs are a miracle economic cure, Mr. Trump has allowed exceptions for imported consumer electronics, smartphones, coffee, bananas, copper, chemicals, flat-panel TVs, memory chips, fertilizer, and hundreds of other products.
Dailbor Rohac warns of “the Lindsey Graham Act’s dangerous tariff provision.” A slice:
Then there is a provision from the original bill Sen. Graham introduced last year, with the backing of Sen. Richard Blumenthal (D., Conn.). It would authorize the president to impose discretionary duties of up to 100% on goods from countries that rank among the five largest importers of Russian crude oil or natural gas.
Those lists include the usual suspects, namely China, India, Turkey and Brazil. Japan and South Korea, however, also import significant amounts of Russian liquefied natural gas. And despite a dramatic reduction of its dependency on Russian energy, the European Union is Russia’s largest LNG and pipeline gas customer—and the world’s fourth-largest importer of Russian crude. The EU isn’t a country. But it is a single market with a common trade policy, and there is no practical way to impose tariffs on the importers but not on EU countries that have cut energy ties to Russia.
A different administration might wield this new tool prudently and consistently. This one has stretched its interpretation of existing trade statutes. After the Supreme Court struck down the administration’s tariffs under the International Emergency Economic Powers Act, the president leaned on Section 122 of the Trade Act of 1974—a never-before-used balance-of-payments provision, capped at 15%, which lapsed on schedule on July 24.
Since then, the administration has been rebuilding its tariff wall through Section 301 of the 1974 Trade Act. These investigations now affect 60 trading partners accounting for 99.4% of U.S. imports. There are Section 232 “national security” probes into everything from semiconductors to wind turbines. Section 338 of the Tariff Act of 1930 is expected to hit Canadian goods with 50% duties starting Aug.19.
The Graham bill applies only to a small number of jurisdictions, but the legislation’s danger is that it scraps legal triggers, investigations and deadlines that the administration has had to honor under other statutes to sustain its maximalist tariff posture.
President Donald Trump has touted plans for a massive $4 billion aluminum smelting plant in the small town of Inola, Oklahoma, as a prime example of his administration’s efforts to bring manufacturing back to the United States. Instead, the project is demonstrating a pitfall in populist economics. Promising to restore industrial jobs is popular in the abstract, but the reality on the ground is more complicated, even in a state Trump won by more than 30 points.
Last week, Oklahoma Attorney General Gentner Drummond (R), who is running for governor, asked a federal court to block construction of the 350-acre development. He was tapping into intense anger in Inola, a conservative town outside Tulsa. In June, the town’s council issued a temporary moratorium on the smelter project despite a direct plea from the president to approve it “without delay.”
Though the plant would create about 1,000 permanent manufacturing jobs, locals reasonably fear that pollution could harm residents and nearby agriculture. Aluminum smelting has real environmental fallout. Others are concerned that the energy-intensive facility would compete for electricity resources and jack up ratepayers’ bills, a familiar point of contention in the fight over data centers.
But unlike data centers, which are being built to satisfy exploding market demand, the aluminum smelter could face economic headwinds. It would be propped up by hundreds of millions of dollars in subsidies and incentives from both the federal government and the state — a classic exercise in industrial policy.
Stefan Bartl pleads: “Don’t let Washington pick the next Apple.”
John Puri warns of the U.S. government’s fiscal incontinence.
