Trump’s Tariffs: Stupid, Stupider and Stupidest

Trump’s Tariffs: Stupid, Stupider and Stupidest

The Wall Street Journal called Trump’s tariffs “dumb”. I called them “stupid”. And then he rolled out his plan for all to see. Now the Journal is calling them “dumbest” and for me, is “stupidest” even a word? Let’s recount. First, he said he was going to impose a 25% tariff on Mexico and Canada until they stopped the flow of illegals and fentanyl. Both were threatened equally even though most of the influx comes across the southern border. Strangely, China, the source of fentanyl was only hit with a 10 percent tariff threat. Mexico and Canada took steps but the Trump lied. Now he wants to impose the tariffs to force manufacturing to move across the borders and into the states. I had called the “stop illegals and stop fentanyl” demand a ruse. And it was. Trump then openly said that he wanted to bankrupt the Canadian economy and force Canada to become the 51^st state. Strange because that would have put more democrat senators and representatives in the Congress. Trump said that the only way to avoid the tariffs was to move production to the US.

Trump then said that he was going to impose reciprocal tariffs on all our trading partners to equalize the tariffs across the board between countries. Then came the great reveal of “Liberation Day” where the reciprocal tariffs were not reciprocal at all. Rather Trump’s new tariffs were a mixture of tariffs, the trade (goods) deficit and “currency manipulation.” The result was that when Israel announced that it had lowered all its tariffs to zero, the Trump “reciprocal” tariff was not zero but 17 percent! This was because, I presume, that we run a deficit with Israel. Therefore, in order to get their tariff down to zero, Israel must tell its companies not to sell any more goods to the US when the amount sold equals to the amount purchased by the US. This is beyond dumb. This is beyond stupid. This means that because the trade deficit in goods (which ignores the trade surplus in services) is $1 trillion, in order to eliminate Trump’s tariffs, American’s must stop purchasing foreign goods. And this is supposed to make America great again?

I read somewhere where the total amount of tariffs on Chinese goods was 64 percent. When asked about how could China get the tariffs lower, Trump officials said that China needed to stop the flow of fentanyl.  Trump accused China of subsidizing chemical companies to export fentanyl and of providing a safe haven for Chinese criminal organizations that launder the revenues from the opioid trade. A statement from the White House said “Despite multiple attempts to resolve this crisis at its root source through bilateral dialogue, PRC officials have failed to follow through with the decisive actions needed to stem the flow of precursor chemicals to known criminal cartels.” The Chinese, of course, denied being complicit in the fentanyl trade. But really? In a country as tightly controlled as China do you seriously think that the government does not sanction the fentanyl trade? The drug and its damage to China’s enemies in the west are surely part of China’s overall strategy to weaken western economies. What do you want to bet that Xi and his cronies are getting wealthy off the fentanyl trade? There is enough money there to bribe hundreds if not thousands of western partners.

Yet even if China did take tough action to stop the flow of fentanyl, Trump’s “reciprocal” tariffs would not vanish. They would not go away even if China reduced its tariffs to zero. Again look at the example of Isreal. Since the US runs a trade deficit with China, Trump would still keep his tariffs in place until that deficit goes to zero. The same is true for Mexico and Canada. Even if they reduce the flow of fentanyl to a mere trickle, Trumps tariffs will stay in place until the trade deficit goes to zero and production is moved into the US.

This is sheer lunacy. I once wrote that Trump was Herbert Hoover who signed the Smoot-Hawley tariff act that help plunge the country into the Great Depression. Well both Smoot and Hawley lost when they ran for re-election. Hoover lost and the republicans lost 100 seats in the congress.

Unless Trump stops this madness, look for the democrats to take back the House and possibly the Senate in 2028.