Ugh. Bad policy and bad politics.
President Donald Trump on Wednesday laid out the U.S. “reciprocal tariff” rates that more than 180 countries and territories, including European Union members, will face under his sweeping new trade policy.
Trump and the White House shared a series of charts on social media detailing the tariff rates they say other countries impose on the U.S. Those purported rates include the countries’ “Currency Manipulation and Trade Barriers.”
An adjacent column shows the new U.S. tariff rates on each country, as well as the European Union.
Those rates are, in most cases, roughly half of what the Trump administration claims each country has “charged” the U.S.
No, I don’t like tariffs. They are stupid policy. An argument can be made for reciprocal tariffs to create a fair playing field (with the hope that both countries back down), but even then it’s a risky policy playing with consumers’ money.
But even if the reciprocal tariffs were a good idea as a policy or a tactic, Trump’s timing is terrible. He is on a very short clock to get some big things done in terms of cutting government, cutting taxes, cutting regulations, etc. He needs Congress’ support for that and the Republican margins in Congress are razor thin. When Trump’s approval rating starts sagging because everyone’s 401(k) is crashing, those marginal Republicans will stray. Trump will not be able to help encourage party discipline if he’s a lame duck president with a weak approval rating.
Get the big stuff done in Congress FIRST. The play with international trade with tariffs if you want. As he’s doing it, even if some other countries do lower their tariffs and open up markets for American goods, it will take capital to invest in building the capacity to serve those markets. It’s much harder to get capital when we suck trillions of dollars out of the equity markets.
