Tariffs are a blunt force instrument, a coercive stick used to force another country’s political leadership to change its trade policy. The logic goes as follows: If the targeted country feels enough pain in its balance sheet, it will eventually come to the table and provide concessions in order to get those taxes lifted.
President Trump buys into the theory like a tourist buys cheap “I love NY” T-shirts in Chinatown. He loves tariffs and has trumpeted their power for decades. If there was a tariff lobby, the president would be the frontman. Trump is so smitten with them that he has proudly referred to himself as “Tariff Man,” as if this gives him superhero-like qualities. His last-minute migration and asylum deal with Mexico last Friday (details of which are scant and may have been agreed to months before) has only made Trump an even more devoted believer of the tariff ideology than he already was.
Speaking to CNBC Monday morning, the president was gung-ho about tariffs being as effective on China as they were on Mexico. “People haven’t used tariffs, but tariffs are a beautiful thing when you are the piggy bank, when you have all the money,” he said.
Business groups and free traders, of course, view tariffs as a tool only to be deployed in the most exceptional circumstances. It’s not a mystery why: supply chains get screwed; trade relationships get tampered with; and ultimately the consumer at the end of the line has to reach into their pocket for a few extra dollars. Tariffs, particularly tariffs that persist for a long period of time, can also bleed into other aspects of the bilateral relationship. The trade war with Beijing has only worsened a U.S.-China relationship that was suffering from any number of defects, from Chinese maneuverings in the South China Sea to cyber warfare.
Trump, however, may not care about the wider diplomatic consequences. He has slapped tariffs on Canada, the Europeans, China, and Mexico and has threatened to escalate the rates if trade imbalances don’t get rectified. The president is as sure of the tariff shtick as he is about his own negotiating ability, which means he can’t be persuaded otherwise. Gary Cohn, the former White House chief economic adviser, spent hours and hours with Trump trying to explain why using tariffs as a diplomatic tool was a bad idea. Cohn later quit.
This is who Trump is. Whether you agree with him or not, the president is going to continue using the tariff threat against countries far and wide, regardless of how interconnected the U.S. economy is to the country in question (Canada, Mexico, and China are the three largest U.S. trading partners, yet that didn’t stop Trump from fining them).
Note to the U.S. Chamber of Commerce: get your heart medications ready.
Daniel DePetris (@DanDePetris) is a contributor to the Washington Examiner’s Beltway Confidential blog. His opinions are his own.
