Hey everyone. I am doing a quick Jackal on a topic I have been thinking about lately: Trump’s obsession with tariffs. I think I’ve cracked his code.
This is great. I always want to know more about Trump’s position on tariffs.
OK, I know this is probably not on the forefront of everyone’s mind, but it is probably Trump’s most important policy. In fact, it’s probably one of his only two real policy proposals (the other one being mass deportations), so we really should focus on it.
But before we do that, we should get into why tariffs are bad, which is really just as simple as explaining what they are. Here is Wikipedia, with a laymen’s definition:
A tariff is a tax imposed by the government of a country or by a supranational union on imports or exports of goods.
Simple enough.1
But let’s go a little deeper. And by deeper, I mean to about 5 years ago, before COVID, and before Joe Biden (peace be upon him) became President. There are lots of examples from throughout American history, but Trump’s presidency gives us some stuff to chew on.
I mentioned this in a recent Jackal, but Trump’s policies during his presidency were inflationary. This is largely due to the tariffs he enacted on specific goods coming in from China, but his plan going forward is to do them more broadly. Here is an article on Trump’s tariffs from 20 years ago 2022:
Donald Trump’s tariffs and the trade war his administration launched against China turned out to be far more damaging than many believed. That is the conclusion of research finding companies, consumers and the U.S. economy paid a heavy price for the Trump administration’s protectionist trade policies. […] “The results suggest that markets interpreted the impact of the tariffs as much more negative than what economists initially estimated,” said David Weinstein in an interview. “Part of the reason stems from the fact that the U.S. tariffs rose significantly in 2019, and the earlier studies didn’t include these higher rates. Moreover, the new analysis suggests that the tariffs’ impact on productivity is likely to be a factor holding down U.S. growth rates. The tariffs protect the least efficient firms and reduced their incentives to innovate while hurting the most successful U.S. firms, reducing their ability to innovate.”
A lot of this got wiped out by COVID, which means we should focus on the projections for Trump’s new proposals. Spoiler: Projections for Trump’s current policy proposals are even worse. The long and short of it is that Trump’s plans will greatly increase inflation, possibly to higher levels than we experienced in 2021 and 2022:
“Nonpartisan researchers,” they said, “predict that if Donald Trump successfully enacts his agenda, it will increase inflation.”
Last month, the Peterson Institute for International Economics predicted that Trump’s policies — the deportations, import taxes and efforts to erode the Fed’s independence — would drive consumer prices sharply higher two years into his second term. Peterson’s analysis concluded that inflation, which would otherwise register 1.9% in 2026, would instead jump to between 6% and 9.3% if Trump’s economic proposals were adopted.
And to be clear, being anti-protectionist used to be a bedrock, Republican principle. I do not like Trump’s policies because I support free trade, which was true for most conservatives throughout the latter half of the 20th Century. Here is the Heritage Foundation when a certain Democratic President decided to impose tariffs:
President Bill Clinton's willingness to start a transatlantic trade war over bananas is proving to be anything but wise. On March 3, the President imposed duties of 100 percent on $520 million worth of popular European products, such as Waterford crystal and Italian pecorino cheese. The duties are supposed to punish the European Union (EU) for disregarding a 1997 World Trade Organization (WTO) ruling that it change its preferential policy favoring banana exports from countries in Africa, the Caribbean, and the Pacific.
Because of the President's action, hundreds of American and European companies that have nothing to do with bananas now face trade sanctions that will price them out of the U.S. market. The duties will affect a wide range of European products, including cashmere sweaters, greeting cards, coffee makers, chocolates, biscuits, pasta, bath oils, candles, handbags, and ham. The government will start collecting the duties on April 12, the day a WTO dispute settlement panel is expected to rule on U.S. charges that the EU's policy change still does not comply with WTO rules. Meanwhile, because U.S. importers of these products will have to post a bond equivalent to the sanctions, they already may have begun to curtail their imports.
The President's protectionist response not only undermines the authority and principles of the WTO, but also is straining relations with many of the countries involved (my emphasis).
Here is the Heritage Foundation now:
“Actually, we have now decided that tariffs are good.” - Conservatism, Inc., in 2024.
OK, so tariffs are bad and inflationary. Why does Trump want them?
We are now at the crux of this Jackal, which means I have to link to a Larry King interview with Donald Trump from 1987. The whole thing is worth watching, even if just to see (1) Trump’s cognitive decline and (2) his thinking around economic policies from around that time. But here is the interview, and the part where Trump starts talking trade (and tariffs) is around 9:30:
If you listen closely, you will hear him reveal his general philosophy: These other countries should pay us money because we are the U.S. and they are not. It’s actually an extension of his business philosophy, which was essentially that he will not give anyone anything unless he gets something in return.
I am very familiar with this negotiating technique, because my toddler uses it on me on a daily basis. But according to Trump, it served him well in his business career, and in the 1980s, he decided to deploy it in politics.
A lot of journalists treat Trump as this political anomaly that came out of nowhere in 2015, but in reality he has always been political. In the interview with Larry King, he very clearly identifies himself as a Republican. How many times have you heard the random Trump supporter say, “He was a Democrat for his whole life and was never called a racist until he became a Republican?” Sometimes Trump says that himself! But in reality, he was always tied to the GOP.
The problem, of course, is that protectionist trade policy didn’t fit in with the GOP of the 1980s, but it certainly fit in with the block of the GOP that Trump identified with: Buchananism, which I’ve written about before. People forget this, but the Reform Party and Ross Perot were a real thing in the early 90s, and even Ron Paul was tapping into this vein in the 2008 and 2012 Elections. Paul was more open to free trade, but he would very much qualify as, “America First,” and is currently supporting Trump! The Trumpian wing of the GOP has always been there, maybe dormant or hunched over a toilet throwing up last night’s McDonald’s, but he is not brand new.
The problem, of course, is that Trump’s embrace of these policies - again, based on his business career - came before the collapse of his empire. His companies filed for bankruptcy and he narrowly avoided personal bankruptcy by selling off his most prized assets (like the Plaza Hotel and his fleet of planes).2
So, he never got to actually test them in the political arena. The GOP mostly moved past the Buchanan era and Ron Paul was laughed out of the primary. But Trump has alligator blood and kept hanging around.
Obviously, we know that Trump re-emerged after his bankruptcies thanks to The Apprentice and ________.3 But he still keeps going back to the policies he thought were popular in the 1980s. I think Trump does this for two reasons:
He is sundowning and in rapid cognitive decline, so his brain is going back to things that give him comfort.
He is painfully dumb and has always been painfully dumb.
A return to a universal tariff policy would be an economic disaster. Here is Joey Politano with a great economic analysis:
Universal tariffs as high as Trump is proposing will substantially increase prices—US consumers will bear the brunt of inefficient taxes on a wide variety of basic foods and essential goods that physically cannot be produced stateside, with the poorest households being hit the hardest. American industry will struggle amidst higher costs for key intermediate supplies, machinery, and equipment, dwarfing any marginal benefits from reduced foreign competition. Universal tariffs will primarily hit products bought from America’s closest allies, worsening the country’s geopolitical standing compared to China and completely isolating it from the international community. The inevitable retaliatory tariffs would crush large American exporters and begin an escalatory spiral with no clear off-ramp. As President, Trump would have broad unilateral authority to increase tariffs in a variety of ways, and there would be massive negative economic consequences if he implemented even a fraction of his stated trade plans.
If you want this policy in graph form, coupled with Trump’s plans for mass deportations:
This is a real graph that I screenshotted like a boomer, but it comes from this piece, which should scare you.
Is Donald Trump a Fascist?
I would be remiss if I didn’t touch on the big story this week, which is that Trump’s former Chief of Staff, John Kelly, called him a fascist in an interview and also confirmed the “suckers and losers” comments. I don’t have much to say, outside of giving you a reminder that the Jackal explicitly told you the “suckers and losers” stuff was real. Sarah Longwell can speak for me:
When Trump’s former vice president, Mike Pence, told us that “the American people deserve to know that President Trump asked me to put him over my oath to the Constitution” on January 6th?
When James Mattis said Trump’s “use of the presidency to destroy trust in our election and to poison our respect for fellow citizens has been enabled by pseudo political leaders whose names will live in infamy as profiles in cowardice”?
When Mark Esper said Trump was “unfit for office,” and put “himself before country”?
When John Bolton warned that “this will be a retribution presidency”?
When Ty Cobb said Trump’s “conduct and mere existence have hastened the demise of democracy and of the nation”?
When Mark Milley called Trump “fascist to the core” and “the most dangerous person to this country”?
When Bill Barr said Trump “shouldn’t be anywhere near the Oval Office”?
I have another idea: Why don’t we accept the obvious truth that is staring us in the face? Trump is dangerous and unfit and all the responsible people who served in his last term have told us as much.
Amen.
Should-reads:
OK, so I have a few things from the Bulwark that are paywalled. But you should subscribe.
J.V. Last compiles a whole host of people who have done a 180 on their Trump criticism in 2021 and before.
J.V. Last also makes a positive case for Kamala being the favorite.
Noah Smith goes deep into Kamala’s economic policies (really worth reading).
Lastly: Yes, I have heard about a video that is supposedly coming. No, I have not seen it, nor do I know anyone who has seen it. For what it’s worth, I sent a tweet about the video to someone who is close to the Harris Campaign and they were surprised. I would imagine that if they were not aware of it before that point, it probably isn’t real. Still, we are due for an October Surprise.
Guys, we have like 11 days until the Election. Full speed ahead.
My favorite recent MAGA “discovery” was that Trump allowed Nelson Mandela to use his plane after he was released from prison and flew him to the United States. It is just plainly untrue, but that didn’t stop Trump taking credit for it in a podcast. The reality: Trump’s planes were seized by creditors and leased to the highest bidder; Mandela did indeed fly on a Trump Jet™, but was charged $130,000 to do so.
I cannot say this enough: WE DO NOT KNOW WHERE TRUMP GOT HOARDS OF CASH AFTER HIS BANKRUPTCIES AND IT IS POSSIBLE IT WAS ALL RUSSIAN MONEY.