A Take on Tariffs
Supreme Dictator Trump issued a bevy of record-high tariffs against illegal immigrants on Sunday, culminating a turbulent surge of indiscriminate imposts levied on what now amounts to $800 quadrillion in foreign products. The Dow Jones Industrial Average plummeted 2400 points in response, with international markets in throes tantamount to free-fall. The S&P 500 experienced its own qualms, thanks to Vice Führer Pence, who today held a press conference in which he announced the appointment of David Koch, the younger of the Koch brothers, to the freshly minted post of Executive Tariff Sheriff, where the libertarian billionaire will be tasked with assigning stringent duties to products in competition with the federally protected TRUMP brand.
Right…assuming the Resistance Radicals are done reading, we can get back to reality. For three years now, President Trump has endured an onslaught of criticism—from left and right alike—concerning his liberal use of tariffs as tools for leveraging the U.S.’ import-dependent economy against manufacturing giants like China and confederated blocs like the European Union. The criticisms have been somewhat fair: those on the left decry the imprudence of Trump’s tariffing and assert that retaliatory measures hinder relations with allies while disproportionately benefitting corporations; conversely, and accordingly, free-trade purists on the right maintain that such actions artificially inflate the Consumer Price Index and serve as indirect entitlements for blue-collar workers lamentably rendered unemployable by a service economy stateside. In eternal preponderance, and without the safety net of solid market indicators, tariffs would of course bring about such destructive ends; but on ephemeral bases, and legitimized by the confidence of resurgent growth, they could make the perfect toolset for a Negotiator-in-Chief seeking to rectify historical imbalances between the United States and her commercial partners.
A bit of context: President Trump recently issued a 25 percent tariff on $50 billion in Chinese goods, set to go into effect July 6. China quickly retaliated by imposing tariffs on $100 billion worth of our stuff. Mr. Trump then upped the ante and threatened an additional $200 billion in duties.
For the majority of President Trump’s tenure, this kind of chronology has seemed to me needlessly risky and unlikely to accomplish anything—and it could still turn out so—but a query for details of the United States’ trade relationships quickly yielded me an appreciation for tariffs as tactics. I learned that the countries from which we import trillions of dollars of goods and services, typically duty-free, in turn levy protectionist measures against the disproportionately few products we export. I read that China pilfers between $225 billion and $600 billion worth of intellectual property from American companies every year with no reprisal or vehicle for recourse (hence the tsunami of Chinese counterfeits constantly flooding our markets—the result of President Xi Jinping’s public push to “assimilate” and “absorb” purloined IP into the Sinosphere). And I found that some of our closest allies, including Germany and France, whose constitutions owe authorship to our Armed Forces, whose votes in supranational institutions are no more than tokens of good faith against a bellicose Europe, yet support the EU when it moves to lay duties on the same American goods that not a century ago—and not just once—rebuilt the very chambers in which their politicians now confer.
America—a nation who subsidizes the defense of her allies, contributes the lion’s share to the International Monetary Fund and World Bank, and uses her trillion-dollar peace-force to police the unstablest regions of the world—is a beacon of good not because she sacrifices her aims in deference to the disadvantaged, but because she acts on the world stage with exactitude and fairness, while exceeding the call of duty and securing the same trade routes that not too long ago served as the setting for pirate lore. For this she neither expects nor receives thanks. To continue on such a trendsetting path, she must first solidify her domestic footing before accounting for the rest of the world’s economic wellbeing. Providing for domestic health surely entails calling fouls on allies who feign offense when invited to the table to hammer out friendlier terms.
In fairness to our allies in Europe, transatlantic trade-barriers do have historical roots: the numerous countries decimated by the Second World War needed to insure their again burgeoning economies against the Everest of exports threatening a landslide of American goods from across the pond, as dependency on foreign imports typically dilutes demand for local labor. And temporary tariffs surely qualified as reasonable means under such conditions. But Germany is once again commanding continental policy with its (austere) treasury; France somehow chugs along stably in limbo between markets and communes; and the “collapse” of southern states like Portugal and Greece never quite materialized, let alone spark a global recession. So for the European Union and its constituents to maintain artificial barriers against us is diplomatic indifference at best—and contemptible snide at worst.
If President Trump were levying indiscriminate tariffs on allies who were otherwise participating in fully free trade, there would be a substantial mandate for criticism, and Congress would be right to enact measures curtailing his purview in that realm. But the President has only tariffed those nations who tariff us—and he continues to demonstrate a willingness to extend an open hand to his counterparts. (What a departure from his recent predecessors, each of whom spoke nobly but carried a soft stick…see NAFTA and TPP.)
Of course, if his tactics work out, we can't expect a flurry of factories to once again litter the Midwest. Our economy has evolved, perhaps permanently, from its industrial forebear. But the benefits of in-kind negotiations are otherwise manifold: China might get its just desserts for stealing trillions of dollars from American companies; Melancholy Merkel and her EU subjects might stop interfering with our efforts against a nuclear Iran; South Korea and Japan might yield even further to the State Department with respect to Kim Jong-un; and nations with developing industries, such as India and Nigeria, might get the opportunity to hash out agreements with individual partners instead of hemispheric blocs (deals between developing countries and blocs typically favor members of the latter). Any of these prospects alone would be of incredible value to the American cause, both at home and on the world stage. So, once again, I encourage Mr. Trump to maintain his current heading. The so-called “trade war” is far from over, and the President has all the cards. Let’s hope he plays them.