❝ President Trump often seems as though he’s stuck in the ’80s. But maybe the better comparison is to the 1680s, not the Reagan era.
Consider his announcement Thursday of new tariffs on steel and aluminum imported from the European Union, Canada and Mexico. These countries not only supply about half of our imports of these metals; they are also among our closest allies.
Astonishingly, the White House claims that alienating these important military allies is necessary “to protect America’s national security…”
❝ In the 1680’s…there basically was no such thing as modern-day trade diplomacy; tariffs were high, and no one would have trusted anyone to stick to trade agreements anyway, since everyone was trying to maintain trade surpluses at once. Which is fundamentally impossible.
It was a zero-sum view of the world. Nothing was win-win, everything was win-lose, and everyone was suspicious of everyone else…
❝ Like an 18th-century mercantilist, Trump perceives no mutual gains from trade. In any transaction, he sees only a winner and a loser. And the winner is determined by who has the trade surplus…
❝ Even 18th-century mercantilists knew that if you were trying to use tariffs to boost your trade surplus, you wanted to tax imports of finished goods, not the inputs that your domestic industry needs to make those high-value, finished-good exports.
Trump still hasn’t figured this out. In protecting U.S. steel and aluminum, he is threatening the much larger manufacturing industries that purchase these materials to make, and then sell, high-value exports such as cars and appliances.
Sufficient ignorant and bigoted Americans voted for Trump to get him into office – even though he lost the popular vote. They probably deserve the fruits of what they’ve sown. They are likely to move an economy with solid results from the political economy used to bring us out of the almost-Great Depression of a decade ago – straight into a recession. The natural result of the policies leaking from the brain of a half-baked fake president and his convocation of proto-fascist gnomes.
RTFA by Catherine Rampell – and weep.