There is a glaring omission in all the words spoken and written about tariffs since President Donald Trump announced his horrific new trade policies on April 2.
The scale of the probable horror is clear. Protectionism looks likely in the future to stanch American growth if it is not already doing so, kill American jobs, and erode American wealth. Stock prices melted down on Wall Street in reaction, gouging everyone’s retirement savings.
For once, Capitol Hill Democrats were not exaggerating. They described Trump’s protectionism as a “catastrophe” and a “financial forest fire.” In a similar vein, European Commission President Ursula von der Leyen said, “The global economy will massively suffer.” She also noted that across the world, people will feel they have been “let down by our oldest ally.”
So, the damage is not only recognized as being economic and financial but has already eroded the intangible but hugely important asset of American leadership, and trust in this nation’s good sense and goodwill.
All this has been noted, as has the fact that the White House calculated its “reciprocal tariffs” extraordinarily sloppily. Among those hit by the tariff tsunami were tiny territories that almost no one has heard of and, in one case, uninhabited islands in the Antarctic.
Whacking diminutive communities with which the United States does negligible trade and inflicting punishment on the Heard and McDonald islands, which are populated by penguins rather than people, evokes the blundering of a careless giant, not the serious policy of a thoughtful ally. Despite the White House having at least four weeks to prepare for “Liberation Day” after the president sketched it in a joint session of Congress, the big reveal in the Rose Garden on April 2 looked like a rushed job cobbled together in amateur hour.
The big omission, however, is that Trump’s tariff policy is steeped in the sort of false, left-wing “equity” assumptions that animate woke radicals on other issues. Hearing Trump excoriate other nations, many of them our friends, for “ripping us off” was like listening to racial grifter Ibram X. Kendi asserting that all disparities of outcome between races are due to racism. Trump says, and acts on the belief, that all disparities in trade are the fault of unfair trading policies, of foreigners defrauding and taking advantage of our generosity.
But even though other countries have some absurd trade protections ripe for abolition, just as we have on domestic sugar, it is not those protections that produce U.S. trade deficits. Our deficits are due to the fact that we are rich, the richest people of any big country in the world, so we have money to spend, and we sensibly choose to buy goods from places that offer the best combination of quality and price. Trade deficits reflect our success rather than our failure.
TRUMP ESCAPES TO FLORIDA AFTER SETTING WORLD ECONOMY ON FIRE
Trade deficits notably narrow during recessions, and that’s because people feel poorer and have less to spend. Historically, shrinking trade deficits have been a token of temporary economic pain.
Now, with a massive wave of tariffs about to hit us all, shrinking trade deficits will not be the result of economic hardship. They will, rather, be the cause.
