11 Mar Tariff Man
I’m not the man they think I am at home
Oh, no, no, no
I’m a rocket man
Rocket man
Burning out his fuse up here alone
Rocket Man – I Think It’s Going to Be a Long, Long Time (Elton John, 1972)
Like President William McKinley before him, Donald Trump has borne the nickname “Tariff Man.” He even calls himself that. When I first heard this, Elton John’s tune Rocket Man leaped into my head. Why? We can open a timely debate by substituting the word tariff for rocket in the above song title and chorus.
Internationally, Mr. Trump and his tariff obsession certainly do not make him the person his supporters think he is here at home. Oh, no, no, no, definitely not. Is our Tariff Man futilely burning out his fuse all alone in his orbit, accomplishing nothing? Worse yet, will his rocket come back to strike the United States?
Although I do think it is going to be a long, long time before we know the ultimate answer, let’s launch the discussion of Donald Trump’s tariff mission.
Where is He Headed?
I am hesitant to read Donald Trump’s mind – my parents taught me to be careful what I allow to enter my head – but I do think I know what he is trying to accomplish with his tariff wars and rumors of tariff wars. If I am properly understanding him, President Trump seeks the following:
- Leverage to get what he wants from allies (such as border control and defense spending)
- The opportunity to exercise grudges against perceived global enemies and competitors
- Smaller U.S. trade deficits
- Revenue for our national income statement
- Being perceived as helping U.S. manufacturers and creating jobs here
- Attention and admiration as a “strong” leader, whereas others are “weak”
In the short term or in a unilateral world, all of these goals could be accomplished to some extent. Already tariffs scheduled for goods coming from Canada, Mexico, and Colombia have achieved at least some things that President Trump claimed were “wins” for America, and, by definition, any tariff can be considered as justice, helpful to someone, revenue producing, and a show of strength.
In furtherance of the above-bulleted ends, President Trump, without congressional approval and despite a strong economy, invoked the International Emergency Economic Powers Act of 1977, citing an “extraordinary threat posed by illegal aliens and drugs.” He quickly announced tariffs on Canada, Mexico, and China, adding that “the European Union is very, very bad to us, so they are going to be in for tariffs,” too. He then delayed some of the levies, before reimposing them on March 3. He also announced that “reciprocal” tariffs will take effect April 2, saying, “If they charge us, we charge them.”
Stocks markets dropped and consumer fears of inflation rose after each tariff announcement. In his March 4 speech to Congress, Mr. Trump acknowledged that tariffs will cause pain in the U.S., but he predicted the hurt will be minor, temporary, and for the best. “Tariffs are about protecting the soul of our country,” President Trump has asserted.
Where Is His Rocket Going to Hit?
Tariffs are taxes (although they currently produce less than two percent of all U.S. tax revenue). Like all taxes, tariffs add incremental costs and thereby reduce economic growth. They also increase inflation, cause business uncertainty, and decrease business investment. In addition, tariffs raise questions of which goods, if any, will be exempt. For example, after being lobbied by big U.S. automakers Ford, General Motors, and Stellantis, President Trump on March 5 delayed for one month the tariffs on auto-related products from Canada and Mexico, followed the next day by a suspension of tariffs on additional products from those countries. Such exemption questions are rife for corruption.
Another problem is that our world is not one-sided, and other countries will push back through their own tariffs on goods imported from the United States. China and the others already have made retaliation announcements. Most economists believe the tit-for-tat will hurt the U.S. economy. The fact that the impact will be even worse in other countries (which it will, due to American economic power) does not make it helpful for U.S. citizens. Prices in the United States are high already, and they will increase here due to tariffs. Stock market declines also are likely to continue, and many Americans (including Mr. Trump) do not want that.
Regarding the president’s creation of an “External Revenue Service” to collect the allegedly budget-balancing tariff revenues he is touting, I want to clarify that tariffs are not paid by the foreign nation or manufacturer. Tariffs are paid by importers in our own country.
Although President Trump says tariff is “the most beautiful word in the dictionary,” and he mentioned tariffs 18 times during his March 4 speech, he apparently fails to realize that any tariff war includes the word war. And, like a shooting war, any “victory” after tariff hostilities comes at a big cost. Similarly, given that tariffs are taxes, Mr. Trump should realize that nobody (especially not him) believes tax is a beautiful word.
In the long term, the Trump tariffs are bad and dangerous policy, heading our way.
(Illustration above by Laurie Bergren, with “America the Wonderful” map provided courtesy of the David Rumsey Map Collection.)
Written by Quentin R. Wittrock, founder of Principle Based Politics.
His periodic, principled political posts explore and promote the idea of principle in politics, both as to individual elected leaders and our federal government as an institution.
Principle Based Politics does not endorse or support any particular political candidate or party.
Quentin Wittrock
Posted at 13:46h, 12 MarchI really appreciate my hometown artist friend, Laurie Bergren, doing the cover illustration for this post!
Gary Russell
Posted at 14:20h, 12 MarchIt would be helpful if the media (or the white house) would show Americans a table of tariff percentages by country. Just a top 10 list of highest to lowest. Then the concept of “reciprocal” tariffs would have some context.
Just like Ukraine, this is all loud theater and the “new way” things will be unless/until Congress starts working again. They are on a long vacation at present.