So Where's the Pony?
Baffled by Trump Tariff Initiative
The Trump tariffs pose an apparently insurmountable challenge to my status as a contrarian thinker– constantly try to opine on why apparently good news contains the seeds of trouble and vice versa. I’m constantly exercising the Reagan habit of looking for a pony in there somewhere.
But this time I’m stumped.
And trying to come up with a comprehensive theory that marries the increased tariffs with his other priorities – like mindlessly axing government workers and intimidating immigrants with status issues – is equally frustrating.
It seems to me we’ve seen this movie before on a smaller screen with Brexit, a costly futile effort to establish economic independence, that hasn’t turned out well. And the idea of a hegemon voluntarily shrinking its footprint doesn’t have many precedents.
There’s a high probability that when the dust settles a bit, Americans will be paying a bit more – both for the products we buy as individuals and for the international credibility we’ve squandered.
Ultimately, my only plausible hypothesis is that Trump is determined to be remembered by history and is totally indifferent to whether the memory is positive or negative. Or as we media cynics say, there’s no such thing as bad news as long as you spell my name right.
Another is that he’s challenging the overwhelming conventional wisdom that politicians will always take the painless and easy way out and lack the courage to ask their constituents to take a bit of pain in return for promised long-gain. But I’m not confident the outcome will provide a template for his successors.
So my endless search for good news yields nothing more than a single, modest nugget – a promotional message from Economist editor Zanny Minton Beddoes that strikes me as a definitive definition of gobsmacked, a concept that I’d previously been a bit fuzzy about. Here’s her take:
Watching President Donald Trump’s White House performance yesterday, it was hard to believe what I was seeing: flawed economics, inaccurate history and cockamamie calculations used to justify the most wrong-headed and damaging policy decision in decades. Mr Trump’s “Liberation Day” was more like ruination day. Our cover leader in most of the world predicts that these mindless tariffs will cause chaos. Almost everything Mr Trump said this week—on history, economics and the technicalities of trade—was deluded. He has long glorified the high-tariff era of the late 19th century. In fact, it was the painstaking rounds of trade talks in the 80 years after the second world war that lowered tariffs and led to unprecedented global prosperity, including for America.
The country that created, and has gained mightily from, the global trade system is now trying to destroy it. The question for countries reeling from the president’s vandalism is how to limit the damage. We argue that they should focus on increasing trade flows among themselves, especially in the services that power the 21st-century economy. There is no avoiding the havoc Mr Trump has wrought, but that does not mean his foolishness is destined to triumph.
After I spent last week in China, it is even clearer just how crazy Mr Trump’s plan is. You might think that these are anxious times in the country that America sees as its main adversary. In fact, our reporting from Beijing reveals a very different picture. Our cover leader in Asia spies a big beautiful opportunity for Xi Jinping. It is true that China has come out badly from Mr Trump’s Rose Garden rant. The new total tariff level could reach around 65%—a blow to China’s economy.
But Mr Xi has been preparing for today’s chaotic world ever since becoming the country’s leader in 2012. His push for greater self-sufficiency means that China is now less vulnerable to America’s economic chokeholds. To grasp this opportunity, the Communist Party needs to stop persecuting the private sector. The economy will also need more stimulus to boost domestic consumption, and more determined efforts to stabilise a long-struggling property market. As America puts up walls, China has a chance to reset trade relations around the world. Whether it seizes the moment depends on one man: Mr Xi. But the fact the opportunity exists owes much to another: Mr Trump.
My next stop is Washington, DC, this weekend. Maybe I’ll find out if there is any method to the madness.
My Economist-defined liberalism requires that you never abandon the possibility that your opponent in a dispute will ultimately be proven correct, but that’s a tough discipline to subscribe to here.
Fasten your seat belts and prepare for an interesting ride ahead.
Jim, I fear you're right. One huge problem is that Trump's goals are in conflict. He's imposing tariffs to raise money (he thinks incorrectly from foreign countries) to finance his tax cuts. But he wants American consumers to buy American, which means they won't buy the foreign products, and the tariff revenue won't be forthcoming. Some Republicans want to exempt sectors such as agriculture, which again means tariff revenue won't roll in. Other Republicans are talking about tax benefits for companies (not individuals, of course) hit by the tariffs, which means they won't have to buy American, undermining the goal of discouraging foreign purchases.
There is nothing that passes for normal strategy here. There may be a goal, though: distraction. Conservatives used to say the only legitimate function of the federal government is to provide for the common defense. Now there's a second one: to line Musk's pocket (and no doubt Trump's). Tariffs are a distraction--a costly one--to divert attention from what's really happening.
Trump wants to go back to McKinley for child labor (have to make up for deportation of migrants), segregation, no worker health or safety, pollution at will--the list is long. I'm waiting for the first lynching. And, of course, back to Hoover for Smoot-Hawley. Ah, what role models. Trump's recitation of history just proves Trump has no grey matter. But who is stuffing his completely empty head with this stuff?
Well, this was good, and speaking of the section you wrote, offers some insight into a mind that hasn't lost its sharpness in the 64 years I have known you. What we are all missing, in one sense, is that the definitions of both public service and the role of govenment have shifted dramatically in the past decades. In the past shysters used flim flam to separate good people from their money Today, the rich in public office are using the government to separate honest citizens (and immigrants) from their money and their rights with the authoritarian power they have seized. How can you account for Bessent, Lutnick, Musk and others--- all wealthy-- are incapble of feeling any empathy for the rest of the nation they claim to "love." As you and the economist lady point out, claiming to save money by slashing government spending, and then collecting astonishing amounts of tax on every TU40 container arrviving in North America is a contradiction. But then Donald Trump is a contradiction that proves the old expression, "only in America!" Despair can turn increasingly destructive. That's the one thing growing faster than the US Treasury.