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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. 

Diary of the Second Addams Administration 12.

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            For a long time, the United States has imposed lower tariffs on the goods of its trading partners than those trading partners have imposed on American goods.  The US did this because the national strategy was to foster a world of openish markets in pursuit of “peace, prosperity, and American exports around the world.”[1]  A month into office, President Donald Trump is announcing the end of the Age of America as the “benevolent hegemon.”  Now it is “pursuing its own interests first.”[2]  Trump’s actions began wreaking havoc in the international economy.  He doubled the tariff on Chinese goods, announced a looming 25 percent tariff on imported steel and aluminum, and raised the possibility of tariffs on semi-conductors, drugs (and not the fentanyl kind either), and cars. 

            Take the example of cars.  About 8 million of the 16 million new cars sold in the United States each year are manufactured abroad, chiefly in Germany, Japan, and South Korea.  Many more “foreign” cars are manufactured in American plants.  In late February 2025, President Donald Trump raised the idea of imposing a 25 percent tariff on car imports.[3]  One solution might be for foreign car-makers to increase production in their American facilities, while reducing exports to the United States.  Fine, except that a) it takes along time to build a car plant and recruit a work force, and Trump might be out of office before the plants are ready, taking his tariffs with him back to Mar-a-Lago; and b) if they cut manufacturing in their home country, they will have to lay off many workers there, as well as taking the political heat that comes with the lay-offs. 

            Then there’s steel.[4]  Many foreign countries subsidize their own steel industries at the expense of American producers.  Eighty percent of America’s steel imports come from “friendly” countries (Europe, Japan), rather than from China.[5]  Trump wants to privilege American steel-producers over those foreign competitors.  American steel-consumers—car companies for example, and their American customers—will have to bear the transitional costs. 

            The push-back came swift and hard.  Basically, “He did this in his first term and the results were BAD!”  Prices rose, American companies saw their sales fall, and car companies came under a lot of financial stress.[6]  Moreover, bullying our friends gains us nothing.  Canada—the country that invented hockey—dropped the gloves, at least rhetorically for the moment.[7]

On the other hand, some observers thought that the threat of tariffs could serve a useful purpose.  It could bring foreign trading partners to renegotiate existing trade deals.[8]  In short, Trump isn’t serious about actually imposing the tariffs. 

But what if he is serious?  And what if he insists on including the reduction of Non-Tariff Barriers (NTB) to trade?  This would include things like currency manipulation, and the taxation and regulation of American businesses abroad.  Eeeek! 

[1] “Trump’s tariffs: A new era of protectionism,” The Week, 28 February 2025, p. 34.    

[2] See Oren Cass, quoted in “Tariffs: Does Trump know what he is doing?” The Week, 14 February 2025, p. 6. 

[3] “Trade: Tariffs may hike foreign car prices,” The Week, 28 February 2025, p. 32. 

[4] “Trum brings back steel tariffs,” The Week, 21 February 2025, p. 32. 

[5] That is, our “friends” have been harming us for decades in the service of domestic interest groups. 

[6] “Trump’s tariffs: A new era of protectionism,” The Week, 28 February 2025, p. 34. 

[7] “Canada: Proudly resisting Trump’s bullying,” The Week, 14 February 2025, p. 14. 

[8] “Tariffs: Does Trump know what he is doing?” The Week, 14 February 2025, p. 6. 

Diary of the Second Addams Administration 11.

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            The year began with a menacing fact about Sino- American trade.  In the course of the last year of the interminable Biden presidency, China’s global trade surplus hit $992 billion, the highest ever.  China’s surplus in trade with the United States reached almost $525 billion.[1]  That’s over half of the total trade surplus for the year.  This news came as a grim confirmation of fears to people who think that trade deficits represent job losses in the deficit country, represent a victory for the chief rival of the United States, and that China is trying to export its way out of grave domestic economic problems. 

            This fact provides important background to President-elect Donald Trump’s tariff policy.  Trump had promised to impose tariffs “on Day 1.”  He didn’t quite do that.  No sooner was he inaugurated than Trump said that he was considering a 10 percent increase on the existing tariffs on imports from China and a 25 percent tariff on imports from Canada and Mexico.[2]  The tariffs would go into effect on 1 February 2025. 

“He’s a fake!” chortled Never-Trump pundits in early January 2025.[3]  He campaigned on levying tariffs of 10-20 percent on all imports from everywhere.  Now the President-elect is talking about focused tariffs on a few things.  Others took a more nuanced view.  This is his second term, so people have become accustomed to his “bluster.”  More than likely, he talks about tariffs in order to “squeez[e] out some concessions.”[4]

            In the eyes of critics, there are two different issues here.  The first is economic warfare against China.  America’s aggressive rival[5] has some serious weak spots.  Most noticeably, these include “a spiraling property market, perilous local government finances, a shrinking labor force, and brittle consumer confidence.”[6]  Since the first Trump administration, many American companies have been pulling back from China.  The country is vulnerable to pressure. 

            China hawks felt ambivalent about tariffs.  The very smart Aaron Friedberg,[7] took a hopeful view.  To resist “Chinese mercantilism,” tariffs “in a more targeted, tailored form” can be useful.  Tariffs on everyone else, however, would impede formation of an anti-China alliance.[8]  Meanwhile, China is exploiting every opportunity to build an anti-American alliance.  Why increase the number of volunteers? 

            The second is the tariffs on everyone else.  The tariffs on Mexico and Cananda “could throw American diplomatic relationships and global supply chains into disarray.”[9] 

            What does China do with all the dollars it earns from selling to America? 

[1] “The bottom line,” The Week 24 January 2025, p. 32. 

[2] “Trade: Trump readies tariffs on rivals and allies,” The Week, 31 January 2025, p. 32. 

[3] No, he’s all too real. 

[4] Gabriel Rubin in Reuters, quoted in “Trade: Trump readies tariffs on rivals and allies,” The Week, 31 January 2025, p. 32.

[5] “A toughish lot, but very go ahead, rather like we were in the old days.”—Sam Collins to George Smiley in John LeCarre, Smiley’s People. 

[6] Eswar Prasad in NYT, quoted in “China: Does Trump really want a trade war?” The Week, 17 January 2025, p. 34.

[7] See: Aaron Friedberg – Wikipedia 

[8] Friedberg’s blog at Foreign Policy, quoted in “China: Does Trump really want a trade war?” The Week, 17 January 2025, p. 34. 

[9] Ana Swanson in NYT, quoted in “Trade: Trump readies tariffs on rivals and allies,” The Week, 31 January 2025, p. 32.