Morning in Arizona

Arizona: Open for Business

Click on the Title to read the full post.

Why Trump’s Higher Tariffs Now are Unlikely to Result in Lower Tariffs Later

Posted by on | June 3, 2018 | Comments Off

On Friday I was browsing the AM dial looking for a sports talk radio station discussing Game 1 of the NBA Finals when I ran into Rush Limbaugh.  Now, I am not one of those who will say that I never listen to X — I will listen (at least for a while) to both the Limbaughs and Olbermans to understand what is going on in Tribe Blue and Tribe Red.  And I am glad I did on Friday because I heard something that really shocked me.

No, this is not faux public shock at some Conservative taking a position one would fully expect him to take, but just the opposite — Limbaugh was at least partially defending Trump’s tariffs despite the fact that I am absolutely positive he knows better.

In fact I am sure he knows better because he made a very good 60-second case for exactly why tariff’s were bad.  Couldn’t have done a better job in that short time myself.  But then he did what many Conservatives have been doing of late — he tried to justify the tariffs as part of some hypothetical long game of Trump’s to negotiate a better deal in the future.

Personally, I think it is absurd to assume that Trump’s real intention is to get us to a new equilibrium with lower tariffs all around the world.  He does not understand the value of free trade and his closest adviser on this issue is an ardent protectionist.  Trump’s negotiation experience is all in zero-sum games where he is trying to extract the most of a fixed pie for himself, not in trying to craft win-win solutions across multiple parties.

But here is the real reason this won’t work:  The current relatively-free trade regime that exists today was built almost totally on America’s moral leadership on the issue.  Let me take a quick aside to discuss a parallel case.  In 2012 the US compound in Benghazi was attacked.  The Obama Administration publicly blamed this attack on an obscure anti-Muslim video posted on YouTube, and continued to insist for weeks on the video being to blame despite the fact that new evidence shows the Administration knew from the beginning the video had nothing to do with the attack.  This was a terrible action for the Administration to take, because from China to Russia to Iran to Saudi Arabia to Britain to Berkeley, there is growing skepticism, even hostility, towards free speech.  If the US President is not staking out a moral position on the world stage in favor of free speech, then it is not at all clear who in the world is going to oppose what seems to be a natural authoritarian tide to shut inconvenient people up.  Obama did not have to defend the video itself (I have not seen it but I understand it to be confused and absurd and fairly indefensible) but he should have said something like “I don’t like the video myself but in a free society we do not meet speech with violence, no matter how confused or misguided that speech is.”

I have the same problem for many of the same reasons with Donald Trump’s tariffs.  Pro-tariff folks pretend like there is some powerful free-trade globalist conspiracy they are fighting, but in fact the real headwinds all around the world are in favor of protectionism.  Few countries outside of the US have our historic dedication to free trade.  In addition, many of our partners have their own anti-trade populist parties on the rise (e.g. Britain, Italy).  And many of the most powerful political actors in our trading partners actually represent large corporations (some state owned and some just highly-aligned with the state) and powerful labor unions who would be perfectly happy to pursue additional crony protectionism of their industry even at the expense of the majority of their country’s consumers and businesses.  All these forces for protectionism have always been kept at bay in large part by America’s leadership on the issue.   How better to demonstrate to the Luddites that trade deficits are not bad than by accepting large trade deficits and having the strongest economy in the world?

Rush Limbaugh and other Trump Conservatives want to argue that these Trump tariffs are the opening move in an extended negotiation that will likely result in a better end state.  I have an alternate way of portraying them.  This is the United States walking into a group of barely-recovering alcoholics — a group in which the US has historically been the powerful moral voice who has kept all these countries on the wagon — and slamming a bottle of Jack Daniels on the table.  The results are not going to be pretty.

 Why Trumps Higher Tariffs Now are Unlikely to Result in Lower Tariffs Later  Why Trumps Higher Tariffs Now are Unlikely to Result in Lower Tariffs Later  Why Trumps Higher Tariffs Now are Unlikely to Result in Lower Tariffs Later

 Why Trumps Higher Tariffs Now are Unlikely to Result in Lower Tariffs Later

share save 171 16 Why Trumps Higher Tariffs Now are Unlikely to Result in Lower Tariffs Later

Comments

Comments are closed.