Donald Trump has decided that liberals shouldn’t be the only ones asking Santa for Xanax this Christmas: The president-elect has informed Republican-aligned business groups that he may impose a 5 percent tariff on all imports, according to CNN.
The network reports that future White House chief of staff Reince Priebus shared this plan with “key Washington players,” and was met with a torrent of panicked lectures on economics.
Priebus, the sources said, was warned such a move could start trade wars, anger allies, and also hurt the new administration’s effort to boost the rate of economic growth right out of the gate.
One of the sources said he viewed the idea as a trial balloon when first raised, and considered it dead on arrival given the strong reaction in the business community — and the known opposition to such protectionist ideas among the GOP congressional leadership.
But this source voiced new alarm Tuesday after being told by allies within the Trump transition that defending new tariffs was part of the confirmation “murder board” practice of Wilbur Ross, the President-elect’s choice for commerce secretary.
It’s been hard not to take Trump’s side in some of his battles with the GOP Establishment. On the issues of infrastructure and entitlement spending, the tempestuous demagogue has, generally, been far more rational than the “reasonable Republicans.”
But when it comes to the wisdom of an across-the-board 5 percent tariff, the K Street set is right.
Fewer than 10 percent of American workers punch the clock in the manufacturing sector. And Trump’s first major act of trade protection illustrated how hard it will be to grow that percentage: The president-elect convinced Carrier to keep one of its factories in Indiana, but the company responded by increasing its investment in automation, with the aim of shedding its U.S. workforce by hook or by crook (or, more precisely, by Mexican or by robot).
Even if Trump were able to avoid a trade war, increasing the cost of every American’s consumer goods seems like a steep price to pay for slowing the decline of manufacturing employment — particularly when one remembers that the poor spend a much higher share of their income on such goods than the rich do.
And, anyway, the present and future of the our economy is service-sector work. That doesn’t have to be a bad thing. Manufacturing employment is undesirable in many ways — you have a much lower risk of losing a finger folding T-shirts or taking care of an elderly person than you do working a production line. Americans don’t pine for factory work, per se — they long for the economic security that once came with it. If Trump wants to make the living standards of non-college-educated Americans great again, he should protect unions, not domestic manufacturers.
These facts — combined with the dependence of American farmers and retailers on open trade — make it unlikely that Trump’s tariffs will garner much support on either side of the congressional aisle.
But the Chamber of Commerce can’t rest easy in that knowledge, because various laws allow the U.S. president to impose tariffs if he (or, perhaps, someday, she) declares that the country’s national or economic security is threatened by unfair trade practices.
Since winning the White House, Trump has shown far less appetite for confronting the Republican Party’s established interests. He has filled top cabinet posts with the very immigration doves and fiscal hawks who recoiled at his populist campaign promises.
It would be a bit odd, then, for Trump to choose the path of most resistance on tariffs. If anything, one would think the president-elect would save up of his political capital for his infrastructure bill, which offers the opportunity to simultaneously enrich his developer friends and juice short-term economic growth to his own political benefit.
But then, Trump knows that the Rust Belt delivered him to the Oval Office. And he appears to view politics and policy almost entirely through the lens of the aesthetic and symbolic — according to the Washington Post, he has been picking cabinet appointees largely on the basis of their looks.
What better way to show his Midwestern faithful that “I, alone, can fix it,” than to unilaterally enact a policy that puts American manufacturers first?