Trump’s take on world trade has little to do with reality
Imagine that you’re listening to some garrulous old guy in a diner, telling you what’s wrong with the world — which mainly involves how we’re being victimized and taken advantage of by foreigners. You hear him out; after all, there have been approximately 17,000 news analyses telling us that garrulous old guys in diners represent the Real America.
Despite your best efforts to avoid being condescending, however, you can’t help noticing that his opinions seem a bit, well, factually challenged. Basically, what he imagines to be facts are things he thinks he heard somewhere, maybe on Fox News, and can’t be bothered to check.
But what if the ranting, ill-informed old guy who strongly believes things that just aren’t true happens to be the president of the United States?
Donald Trump’s declaration that he’s ready to impose tariffs on steel and aluminum is bad policy, but in itself not that big a deal.
The really disturbing thing is the way he seems to have arrived at that decision, which apparently came as a surprise to his own economic team.
In the first place, the alleged legal justification for his move was that the tariffs were needed to protect national security. After all, we can’t be dependent for our aluminum on unstable, hostile foreign powers like ... Canada, our principal foreign supplier. (Canada is also our biggest foreign supplier of steel.)
The point is that the rationale for this policy was obviously fraudulent, and this matters: It gives other countries full legal license to retaliate, and retaliate they will. The European Union — which is, by the way, a bigger player in world trade than we are — has threatened to impose tariffs on Harley-Davidsons, bourbon and bluejeans.
Meanwhile, in the days since Trump’s announcement, he’s tweeted out one falsehood after another.
He has, for example, declared that we have large trade deficits with Canada; actually, according to U.S. numbers, we run a small surplus. The Europeans, he says, impose “massive tariffs” on U.S. products; the U.S. government guide to exporters tells us that “U.S. exports to the European Union enjoy an average tariff of just 3 percent.”
These aren’t pesky little errors. Trump has a picture of world trade in his head that bears as little resemblance to reality as his vision of an America overrun by violent immigrants.
And his notion of what to do about these imaginary problems amounts to no more than a bar stool rant. “Trade wars are good, and easy to win,” he tweeted, where he clearly thinks that “winning” means selling more to the other guy than he sells to you. That’s not how it works.
In fact, even if we could eliminate U.S. trade deficits with tariffs, there would be lots of unpleasant side effects: sharply higher interest rates wreaking havoc on real estate and those with large debts (hello, Jared), and a sharply higher dollar inflicting severe harm on exporters, like many of America’s farmers. And a full-scale trade war would displace huge numbers of workers.
Listening to a garrulous old guy spout nonsense is annoying in the best of circumstances. But when this particular old guy controls the world’s largest military, nukes included, it’s downright scary.