Either President Donald Trump has a deep misunderstanding about the trade policies that enhance an economy or he is deliberately trying to send the country into a recession. Trump’s obsession with tariffs is proving disastrous in every important way.
The trade deficits are up, main street Americans and their businesses are paying billions to fund the tariffs, and farmers have rotting crops they can’t export to China. That doesn’t sound much like the utopian “booming” economy the mainstream media is selling us. Additionally, there are perhaps millions of Americans jobs that depend on imports and trade.
Yet Trump’s behavior continues to be odd surrounding his tariff obsession. Yesterday, President Trump bizarrely took a piece of paper out of his pocket, flashed it at reporters, and claimed it was the secret to an immigration deal with Mexico. Trump wouldn’t show it to reporters, saying that he couldn’t, because if he did, it would be analyzed. as if examining the details of any such agreement would somehow render it useless.
But a picture snapped by a Washington Post photographer appears to show some sort of agreement between the United States and its southern neighbor, though it remains unclear exactly what it entails. Trump claims the deal was a result of his tariff threat: “Without the tariffs, we would have had nothing,” he said according to a report by Reason.
When did taxing the American consumer become the answer to all politicians’ problems? Is there really nothing else Trump thinks he can do? He can’t possibly be so naive he believes foreign countries actually pay tariffs right? Don’t worry; those were rhetorical questions.
The Mexican government continues to insist that there is no secret component to an immigration agreement with the United States. And Trump’s acting chief of staff, Mick Mulvaney, said today that the public may never see the secret deal, according to CNBC.
Regardless of Trump’s reasons, he’s doing damage to an already bleeding economy. The tariff obsession is a bizarre and counterproductive one and should serve as a warning about the ways in which Trump’s deep misconceptions about trade continue to threaten the country’s economic health. If he isn’t confused, he’s damaging the economy on purpose and we aren’t sure which of those is worse. It really can’t be anything else. This isn’t the “4D” chess or anything, it’s global trade and the most basic economic principles of supply and demand still apply.
“Without tariffs, we would be captive to every country,” Trump said during the call, “and we have been for years.” He went on to complain about the size of America’s trade deficit, saying, “We lose a fortune with virtually every country. They take advantage of us in every way possible, and the U.S. Chamber is right there with them.”
He portrayed tariffs not only as a way to bring other countries in line but as a tool for economic growth at the expense of foreign rivals. “We’ve picked up trillions of worth since I’ve been elected. China has lost many, many trillions of dollars. They’re way behind. They were going to catch us,” he said. And he essentially refused to accept that tariffs function as a tax on American consumers, because of the control that China’s government exercises over its economy. –Reason
Trump’s approach to trade is delusional. He’s created a war inside his head that bears little relationship to the destructive reality he is forcing Americans to endure. Unfortunately, he doesn’t seem like he’s willing to admit that starting a trade war was a bad idea and an utter failure.