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Diary of the Second Addams Administration 14.

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            History lessons.  The United States was a high tariff nation for a long time.[1]  By 1929, the average tariff on imported goods was 36 percent.  The Smoot-Hawley Tariff of 1930 raised the tariff by 6 percent.[2]  In comparison, the average American tariff under recent administrations has been 2 percent.  Trump’s tariffs elevate that to 23 percent.  So, for the moment, the Trump tariffs have a greater impact than did the Smoot-Hawley tariff.  (Give it a few years and maybe we’ll be living with still-higher Vance tariffs.)  

In 1971, President Richard Nixon wanted foreign countries to revalue the dollar.  To nudge them toward speedy agreement, he imposed a 10 percent surcharge on imports.  He got speedy agreement and the surcharge went away. 

Today.  How serious a blow to the American economy are the Trump tariffs?  Never mind the stock market and the headlines in the New York Times.[3]  The American tariffs (at least the current high rates) aren’t likely to topple a row of dominos.   Most countries aren’t eager to launch a trade war with anyone just because the United States has launched one with everyone.  Most countries remain committed to “globalization” and comparatively free trade. 

What is true of Europeans and non-Chinese Asians is also true of many Americans.  One recent poll reported that 54 percent of respondents opposed the tariffs, while 42 percent supported them.  Pressure from constituents may bring Republican members of Congress off the sidelines, at least on this issue. 

Then what about retaliatory tariffs on American goods?  This sounds a little odd when Americans are being told that tariffs on foreign imports is really a tax on ordinary Americans.  Same goes for tariffs on American goods in foreign countries.  Do democracies abroad suddenly want to impose possibly long-term “tax” increases on their own constituents? 

            So, it is not clear if American tariffs and foreign retaliation are a done deal for the long haul.  Many of the target countries want to cut a deal with the United States.  China is an exception.[4]  It’s fair to say that people are not entirely sure what President Donald Trump wants.  Does he want tariff equality with most of America’s trading partners, while battering the daylights out of China?  Does he want a “fortress America,” as many people believe or hope or fear?  If he does want a “fortress America,” would that system survive the end of his term? 

            In 1932, the British created a system called “Imperial Preference”: low to no tariffs around the members, combined with a high external tariff directed against the Americans.  Could Trump use tariff negotiations to create something similar?  Tariff equality within the bloc and high tariffs by directed against China.   

[1] Greg Ip, “An Unpopular and Survivable Trade War,” WSJ, 8 April 2025. 

[2] However, it denominated tariffs in dollar terms, not in percent of price terms.  As prices fell all around the world in the early Thirties, the absolute cost of the imports increased by much more than 6 percent.  They rose as high as an additional 19 percent above the 36 percent level. 

[3] Wait.  Wall Street and the NYT are on the same side?  The problems of the Democrats in a nutshell.  “We are the people our parents warned us about.” 

[4] It may turn out that Canada is also an exception.  Canadians are the nicest people in the world.  Until they’re not.  In Normandy in Summer 1944, an attacking Waffen SS unit over-ran a Canadian Army field hospital.  They killed everyone.  Then the Canadians counter-attacked and recaptured the hospital.  The Canadians never “captured” any more Waffen SS troops. 

Diary of the Second Addams Administration 13.

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            President Donald Trump sees great virtues in building a tariff wall around America.  Is that good or bad?  It depends. 

Trump’s argument is that tariffs are good for America over the long run, even if they have short-term costs.  “Other countries have used tariffs against us for decades, and now it’s our turn.”  Trump has claimed that tariffs will make the American economy “even more self-sufficient, producing more of its energy, lumber, steel, and computer chips than ever before.”[1]  If those hopes come true, there will many jobs—white collar as well as blue collar—created.  The American economy’s supply-chain will become much more secure in a time of rising international tensions.  Trump has conceded that America would experience a “period of transition,” which might include a recession.[2]  

Critics argue that tariffs are bad for America and for everyone else.  First, tariffs raise prices for consumer countries, not for producer countries.[3]  Second, if one country raises tariffs, the other country or countries will raise tariffs on the first country’s goods.  This will reduce exports in what becomes a” trade war.”  Slowing down the domestic economy by raising consumer prices and reducing employment in sectors tied to exports could bring on a recession. 

President Donald Trump has followed a very erratic course on actually imposing tariffs.  Is that good or bad?  It’s bad. 

In early March 2025, Trump imposed a 20 percent tariff on goods imported from China[4] and 25 percent tariffs on goods from Mexico and Canada.[5]  China responded with 10-15 percent tariffs on American corn and wheat.  The stock market tumbled and Trump quickly announced a month-long pause on tariffs on imported cars and parts.  The Wall Street Journal wondered “which side of the tariff bed Trump will wake up on” in days to come?  They got a quick answer.  In mid-March 2025, Trump imposed a 25 percent tariff on all steel and aluminum (both unprocessed and turned into something else—look at your soda can) imported into the United States. 

No one seemed to care about the tariff hike for China, but critics insisted that Canada and Mexico take about a third of America’s exports and send the US valuable commodities. 

Is this what got Trump elected?  Journalists posit that Trump won election on the promise of a vibrant economy, low inflation and unemployment, and controlled immigration.  That’s not all they’re getting.  One recent poll reported that 56 percent of respondents disapproved of Trump’s management of the economy.  He tariff-bombed China in his first administration and talked about tariffs in the campaign for his second.  Apparently, no one took him seriously.  Now he is acting like a real lame-duck president: doing what he thinks is right regardless of the polls or the pols—or the stock market.  Albeit in an erratic, bloviating, Trump-like fashion. 

[1] Quoted in “The Trump economy: Adrift in a sea of tariffs,” The Week, 28 March 2025, p. 34. 

[2] “Trump tariffs cause stock market whiplash,” The Week, 21 March 2025, p. 4. 

[3] Which is exactly the purpose of tariffs.  More expensive imports create a market for cheaper domestic producers. 

[4] Previously 10 percent.  The key question becomes whether the American producers can deliver equal goods at a lower cost. 

[5] Even though all three countries are members of the United States-Mexico-Canada Agreement (USMCA) that replaced the North American Free Trade Agreement (NAFTA).  “U.S. tariffs spark North American trade war,” The Week, 14 March 2025, p. 5.