Economy

Trump Demands Tariffs for Some Reason. Any Reason.

JM Ashby
Written by JM Ashby

Trump has talked tough on China since long before he even ran for president, but now that he's sitting in the oval office he's becoming angry because there's not much he can actually do to China.

According to Axios, Trump blew up at his advisers during Chief of Staff John Kelly's first week on the job to demonstrate just how much he wants to punish China for unspecified reasons.

"Bring me some tariffs" Trump reportedly demanded after ignoring his chief economic advisers Peter Navarro and Gary Cohn.

"John, you haven't been in a trade discussion before, so I want to share with you my views. For the last six months, this same group of geniuses comes in here all the time and I tell them, 'Tariffs. I want tariffs.' And what do they do? They bring me IP. I can't put a tariff on IP." (Most in the room understood that the president can, in fact, use tariffs to combat Chinese IP theft.)

"China is laughing at us," Trump added. "Laughing."

Kelly responded: "Yes sir, I understand, you want tariffs."

Gary Cohn, who opposes tariffs and the protectionist trade measures pushed by the Bannonites, had his shoulders slumped and was clearly appalled by the situation.

Staff secretary Rob Porter, who is a key mediator in such meetings, said to the president: "Sir, do you not want to sign this?" He was referring to Trump's memo prodding Lighthizer to investigate China — which may lead to tariffs against Beijing.

Trump replied: "No, I'll sign it, but it's not what I've asked for the last six months." He turned to Kelly: "So, John, I want you to know, this is my view. I want tariffs. And I want someone to bring me some tariffs."

Kelly replied: "Yes sir, understood sir, I have it."

At one point in the meeting, Navarro pulled out a foam board chart. Trump didn't pay attention to it, saying "I don't even know what I'm looking at here."

It's remarkable how reported conversations in the White House transpire almost exactly like I imagine they would.

Anyway, if Trump is so insistent, why haven't we seen tariffs materialize yet?

Well, it's not clear what legal rationale or authority Trump could use to impose them and even if he did they would almost certainly be challenged in court, but not by the Chinese. Major manufacturers and retailers from Wal-Mart to General Motors have already indicated through various media reports that they would immediately file a lawsuit to challenge any tax on imports from China.

And that's what we're talking about here. Imposing tariffs (taxes) on imports from China would not hurt China as much as it would hurt American consumers and companies who rely on imports from China. And it's not as if imposing tariffs would persuade American companies to purchase goods from American producers because, in many cases, American producers don't exist.

Those who can import goods from Canada and Mexico under the North American Free Trade Agreement (NAFTA) already do so but, as you know, Trump is also considering ripping up NAFTA.

I don't think it does anyone good to put this delicately. If Trump got his way and imposed tariffs on imports from China and unilaterally withdrew from NAFTA, we'd be completely fucked. The economy could immediately dive into recession if not something much worse. The price of almost every single thing you buy and use on a daily basis would immediately jump by 20 or 30 percent.

This should not be read as a defense of China. It isn't. We all know intellectual property theft and bootlegs are prolific in China, but this isn't going to solve that problem.

Trump has already handed Chinese bootleggers a big 'win' by withdrawing from the Trans Pacific Partnership (TPP), a trade agreement that would have united most of the Pacific against intellectual property theft.

  • muselet

    An old joke:

    A millipede was scurrying around the forest floor, doing what millipedes do, when a squirrel called to it.

    “Hey, millipede! How do you manage to walk with so many legs?”

    The millipede stopped and thought, then thought some more, then thought even more. And the millipede never managed to walk again.

    If someone had asked the obvious questions (“Mr President, in your own words, what are tariffs, and why do you believe they are desirable?”), I doubt Trump would have been able to say another word about trade again.

    –alopecia

  • Badgerite

    Very good post. Well reasoned, informed and true. Like Bill Kristol has said, it is clear that the man is unfit to lead this country. The only question is how much damage the GOP will let him do before they stop this. And that, apparently, is a lot of damage. It could take a generation or more just to get back to where we were, let alone keep up with the trajectory of the rest of the world.

    • ninjaf

      BUT HER EMAILS!

    • Christopher Foxx

      Imagine how much better off we’d all be if it had been Clinton-Gore-Obama-Clinton.

      • Badgerite

        I do. The GOP would have made her life as miserable as they could. Putin as well. But she has withstood that for at least two decades so I think she would have weathered that as well. The country lost a real opportunity for a good person to lead this country and now we are being lead by a treasonous POS who sold out to the Russians. Seriously, the only one in that family I can stand is Melania. Ironic.

  • I love the way he demands tariffs as if they can just pull them out of their ass and give them to him. It’s ridiculous.

    • Nefercat

      Aw, maybe we should cut his some slack. It’s a two syllable word, so he is no doubt proud of using it. Tariff. tariff, tariff. Is our children learning?

    • Aynwrong

      “Chieee-na!” —>(Trump saying China)

  • Aynwrong

    Trump has the economic knowledge, wisdom and experience typically heard in a “man on the street” interview seen on your local six o’clock evening news report.

    • Nefercat

      He reminds me of the genius at the end of the bar who knows everything about everything which is why he is spending his life sitting at the end of a nondescript neighborhood bar instead of in a corporate penthouse suite.