I don’t suppose many people care, but Donald Trump’s latest venture into trade policy is idiotic. Trump’s tariff plan is so dumb that for once, the Washington Post is actually right: “Trump vows massive new tariffs if elected, risking global economic war.” Putting WaPo in the right isn’t easy, but Trump managed to accomplish it:
Among the ideas [Trump and his advisers] discussed was Trump’s plan to enact a “universal baseline tariff” on virtually all imports to the United States, the people said. This idea, which Trump has taken to describing as the creation of a “ring around the U.S. economy,” could represent a massive escalation of global economic chaos, surpassing the international trade discord that marked much of his first administration. Trump advisers have for months discussed various potential levels to set the tariff rate, and they said the plan remains a work in progress with major questions left unresolved, the people said.
But that didn’t stop the politician from breaking some news:
On Fox Business on Thursday, the former president called for setting this tariff at 10 percent “automatically” for all countries, a move that experts warn could lead to higher prices for consumers throughout the economy and could likely lead to a global trade war.
“I think we should have a ring around the collar” of the U.S. economy, Trump said in an interview with Kudlow on Fox Business on Thursday. “When companies come in and they dump their products in the United States, they should pay, automatically, let’s say a 10 percent tax … I do like the 10 percent for everybody.”
Great idea! A “ring” around the U.S. economy! Foreigners shouldn’t “dump”–i.e., sell–products to Americans! How dare they! Of course, we Americans do like to sell products to foreigners, don’t we? A minor quibble, apparently. Tell that to the farmers.
The infamous Smoot-Hawley tariff, widely credited with bringing on or accentuating the Great Depression, resulted in an average tariff rate of around 19%. Including the tariffs we already have, Trump’s proposal wouldn’t be quite that high. So, Donald: congratulations! Your plan is less destructive than Smoot-Hawley.
For what it is worth, the Post article is relatively fair. It quotes Trump spokesmen, but also this:
Even former Trump economic officials were sharply critical of the idea. “A tariff of that scope and size would impose a massive tax on the folks who it intends to help,” said Paul Winfree, an economist who served as Trump’s deputy director of the Domestic Policy Council and is now president of the Economic Policy Innovation Center, a center-right think tank. “It would get passed along through higher prices at a time when the Federal Reserve has had difficulty limiting inflation.”
Yeah, whatever. Protectionism has never been politically unpopular. Trump apparently is going for the lowest common denominator, appealing to the least informed voters. I guess we shouldn’t be surprised.
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