A TRUMP TARIFF TOO FAR?
The Donald’s big problem may be that he is beginning to hit Americans where they don’t like to be hit — in their pockets
US President Donald Trump has always had a silver bullet against his many opponents and enemies: a pumping economy and jobs, jobs, jobs everywhere. Credit whoever you may want to credit (and the butt of many of Trump’s jibes, former president Barack Obama, can claim a lot of it), but at the end of the day this is Trump’s day and he claims it all for himself.
Last month it was announced that the US economy added 263,000 new jobs in April, easily beating Wall Street expectations of 190,000, and that unemployment fell to 3.6%. That’s the lowest it has been since December 1969. Yes, nearly 50 years ago.
So, despite his irrational tweeting, his outbursts at reporters and political opponents, his belligerence at those he considers to have betrayed him, his flirtation with populists and despots across the globe from Saudi Arabia to Brazil, his gaffes on all manner of key issues, Trump’s return to the White House in 2020 has seemed inevitable.
Until last week. Trump has faced a plethora of challenges both political and economic in the past, but this time they could be the beginnings of a time of deeper malaise for him.
First, the man who has been investigating allegations of Russian interference in the 2016 election, special counsel Robert S Mueller III, refused to clear Trump of obstruction of justice in the investigation.
“If we had had confidence that the president clearly did not commit a crime, we would have said so,”
Mueller said.
That line alone gives the Democrats
a powerful reason to move forward with impeachment proceedings against Trump.
The Democrats are, however, divided on such a move, with younger Democrats all for it while the older hands want to take on Trump at the hustings next year.
The problem for Trump is that his solid support from the Republican benches is cracking.
On May 18, Republican representative Justin Amash of Michigan became the first in his party to break ranks, tweeting that he believed that “Trump had engaged in impeachable conduct”.
Last week Amash received a standing ovation from a largely Republican audience. Trump responded by saying Amash is a “total lightweight” and a “loser”.
But one Republican congressman does not make for real trouble for Trump. Not yet.
Trump’s big problem may be that he is beginning to hit Americans where they do not like to be hit — in their pockets. Last week he caught virtually the entire world by surprise when he announced that he would impose a 5% tariff on imports from neighbouring Mexico.
The tariffs would quickly increase to 25%, he said, unless Mexican officials stop the flow of immigrants across America’s southern border.
The announcement, which reportedly sparked widespread opposition from within his office, was the latest in a month-long frenzy of trade tariff announcements by Trump.
He increased tariffs on $200bn worth of Chinese goods and is contemplating further taxes.
He also threatened that the US was prepared to impose tariffs on cars from Europe and Japan within six months.
The problem is that tariffs have an impact on Americans, primarily: they are a tax on the same people he claims to have given a tax cut. As an example, a 5% tariff on car imports from Mexico may price some Americans out of cars, the head of Honda’s American operations, Henio Arcangeli, was quoted as saying.
It is only 20 years ago that the phrase “It’s the economy, stupid” was popularised by a Bill Clinton campaigner. Trump’s escalation of a trade war with China, and his microaggressions against the likes of Mexico and Japan, may dent the optimistic projections that many economists have made about the strength of the US economy.
If that wall cracks then Trump’s many well-documented gaffes will come very sharply into focus to an American public that has been happy to let it all ride because the economy was pumping on all cylinders.
The only question then will be whether Trump is impeached or loses at the elections next year. It’s still the economy, stupid.
The problem is a 5% tariff on car imports from Mexico may price some Americans out of cars