A mild sense of foreboding
I know some people are probably tired of my defense of free trade and criticisms of Trump’s tariffs. But consider that I am critical of the chaos and quixotic nature of the country negotiations. It started out with some mathematical formula to calculate a “reciprocal” tariff. Then that went out of the window and was replaced by whatever the president decided at the moment. Make him mad and your tariff was doubled. The ten percent universal base tariff was replaced by the 15 percent one. Why? Only the president knows. Our allies got higher tariffs than our adversaries. Did Trump ever place a tariff on Russia? Incredibly high tariffs were placed on India (a once ally) because they purchase Russian oil driving India closer to its ancient adversary China. Instead of building and cementing alliances, we are now forcing our once allies in trade to look elsewhere. I described this policy as Fortress America because we no longer have allies. We no longer engender respect and trust. Our leader is looked upon as unprincipled and undisciplined. It is hard to argue otherwise. We have no friends we can depend on because no one and no country can depend on us.
Trade deficits do not constitute a national emergency. The national emergency is in the continued profligate spending and undisciplined politicians who are the elected leaders of the country. The national emergency is the ever widening differences between those on the political left with those on the political right. I pray that the assassination of Charlie Kirk is not a precursor of things to come when we start killing each other’s leaders and all hell breaks loose. Kirk’s murder will likely inflame the political rhetoric rather than tone it down. The left hates Trump and his cultlike MAGA disciples. I wish the president would now tone down his bellicose tweets and someone would take away his tweeting machine, I see little change of that happening. As Elizabeth Warren said when asked that Democrats need to lower the temperature in politics, “Why don’t you start with the president of the United States, right? And every ugly meme he has posted and every ugly word.” I am not surprised that neither Trump nor his enemies are working to bring back the loyal opposition.
None on the left are willing to bend a knee to Trump and offer him fealty. That seems to be the only strategy to make him back off his attacks. Haven’t you noticed that in the trade negotiations, better deals are given to those arriving at the White House bearing gifts? It has to be infuriating to both the citizens of other countries and to their leaders to come groveling before Trump bearing gifts and kissing his ring. I am not an expert on foreign affairs but Trump humiliated Japanese prime minister Ishiba leading to Ishiba’s party suffering a historic defeat in parliamentary elections. Ishiba felt forced to accept Trump’s demands of a fifteen percent tariff and pledging to “invest” $550 billion in the US with Trump crowing that the US was keeping 90 percent of the profits. Such an arrangement apparently did not sit well with the Japanese electorate. Trump actually called the pledge a “signing bonus” adding to Ishiba’s humiliation.
For me the national emergency is rather emergencies: out of control spending, trashing alliances, creeping nationalization of industry, shakedowns of countries and companies, protectionism, willy nilly tariffs, mean tweets, use of the military domestically without the consent of elected officials are all national emergencies. It is a shame because this administration inherited a mess on the left and has made progress in purging the rot from Biden’s years. However, it must be careful in not making another mess that would have to be cleaned up by another administration. My fear is that we will go careening from one mess to another building animus as we go.
Trump wants to bring back manufacturing. I have never heard a clear statement of what manufacturing does he want to bring back. The administration keeps saying that once the illegals leave then native American unemployment will fall. Yet there are over 7 million vacant jobs in the presence of illegals. Is there just a mismatch between job vacancies and skills? The Hyundai-LG plant in Georgia said that they were using (illegal) Korean workers because of the paucity of Americans with the requisite skills to get the plant up and running. Hyundai said that it would train Americans to do the work but needed to get the plant operational first.
There are common sense ways to address those areas of national security, namely rare earth minerals. Some have suggested pharmaceuticals as well and want all drugs manufactured in this country. I don’t necessarily see that but am willing to learn and listen. What I would like to see is a listing of all of the items on which we are trade dependent whose curtailment would constitute a national emergency. Then we could deal with each one. Saying that sock companies in Lesotho are evidence of a national emergency is laughable as are most of the items that are being traded across countries. But placing punitive tariffs on agricultural imports and the restricting the import of products like wood, steel and aluminum that are inputs to our outputs makes little sense.
Again I am a laissez-faire free trade economist who favors government with a small “g”. I am confident I know what makes America great I am confident I know how to make America even greater. And protectionism ain’t it. So here we are with core inflation up, unemployment up, labor force participation down, the dollar falling, countries and foreign investors shedding dollars, gold and bitcoin being safe havens (bitcoin?) and government borrowing costs rising. Did I leave anything out? No wonder I have this mild sense of foreboding. But maybe everything is going to be ok. Maybe.
My friend Don Boudreaux is an ardent supporter of free trade and I recommend his blog Café Hayek to you. Here is a posting where he takes the MAGAapologist Larry Kudlow to task for calling Trump a free trader. I would hate to be Kudlow and having to keep apologizing for Trump. As a friend of mine says “being a Trump apologist is a full time job.”
