Trump’s Tariffs Are Economically and Politically Disastrous

In an apparent bid to make mercantilism great again, the Trump administration has amped-up its pursuit of protectionist trade measures in recent months, even as others within the president’s own party descry the adverse effects these policies will likely have on the domestic economy.

For his part, the president—always a fan of a good superlative—has touted tariffs on the grounds that they facilitate not simply free trade but a more refined type of trade, one in which executive meddling makes it “fair” and “smart” as well.

One might well wonder exactly who judged Trump’s protectionism to be fair (especially as the president has in the past railed against the punitive effects of protectionist tariffs, such as the one Canada levies against imported milk) or smart.

Unfortunately, the sole proprietor of that judgment is seemingly the president himself.

The ability of the president to hold his own opinions, on its own, is not so troubling; the president’s ability to institute sweeping policies on this basis, however, is.

The president’s recent spate of tariffs, including those levied against residential washing machines imported from Canada and Mexico and those soon to be imposed against imported steel and aluminum, were all done through executive action.

They needed no sanction beyond the highly dubious rationale of the president, who, in an apparent bid to push back against the push back, including that coming from his own party, acknowledged his policies are likely to provoke a trade war. This, the president declared with all the erudition that can be mustered in a Tweet, is not a negative because “trade wars are good, and easy to win.”

This, though would seem to violate the principle of fairness which the president has outlined as an integral part of his trade policy. It’s hard to see how trade can be made fair if those most affected by policies—in this case those American producers who will see the price of goods increase—are excluded from the policy-making process.

Leaving aside the president’s economic illiteracy, these policies are deeply troubling as they are rationalized under the guise of protecting the welfare of the American citizen. Yet, as these are executive actions, they seize the power to define and pursue one’s own good from citizens and instead gift it to the president. Paradoxically, protectionism strips agency of the very actors it purports to act in betterment of.

Thus, protectionism is inherently logically incongruous. Take the rationale offered by the president in defense of his tariffs against imported washing machines. The presidential proclamation in part reads, “I have determined that this safeguard measure will facilitate efforts by the domestic industry to make a positive adjustment to import competition and provide greater economic and social benefits than costs.”

The centrality of “I” looms large; it highlights just how cemented these measures are in the judgments of the president.

But what if the actors who purportedly receive the great social and economic boons of which the president speaks dissent?

In response to Trump’s announcement of the steel and aluminum tariffs, beer brewers MillerCoors released a statement descrying the likely effects of the president’s action. According to the company, there is simply not enough domestic aluminum to keep up with the demand for the cans in which the company packages most of their product. With no choice but to purchase foreign aluminum, the tariffs will mean increases in the cost of doing business, which inevitably are passed on to consumers.

The president, it would seem, is unsympathetic to such arguments. As he announced the steel and aluminum tariffs, he issued an ultimatum to American companies: “You’ll have to regrow your industries, that’s all I’m asking.”

This sends a clear message: anyone who wants a piece of the prosperity Trump is promising will have to bow to his judgment. Clearly, this is not a policy agenda that respects the freedom to dissent or understands the culture of American politics which leaves the object of defining good to individuals, in context of the unique confluence of situations which makes up their life.

Good, particularly in regard to the ever-shifting world of commerce, is a relatively subjective term. What is in the interest of one actor is not necessarily in the benefit of another. Hence the benefits of the free market: it allows for pluralism to burgeon, for independent and private actors to pursue their business as they see fit and for consumers to patronize companies with whom they feel some kinship.

There are great social and economic benefits to this system, but they take diverse forms and are thus difficult to gauge on a wide scale. But, then, that is not the point of most economic interactions, which are temporary pacts between a consumer and a producer, who enter into a relationship on grounds deemed beneficial to both parties. The good does not even need to be in-kind: a consumer’s received good is a product he needs or desires; a producer’s is the money he receives in exchange for his good or service, which will be repurposed to further grow his business.

Protectionism, however, destroys pluralism and instead implements a monistic vision of good, one that is defined in reference to the rationale of a central figure: in this case, Trump. Businesses, and consumers, have no choice but to go along with his vision of good if they hope to reap the benefits of the prosperity promised by his actions. Again, it is difficult to see the fairness or the intelligence of this method.

On an economic and a political level, protectionism does not work. It removes agency from the actors who drive economic actions and makes them subservient to the judgment of a central authority; it negates the principle of self-sovereignty by removing the ability of each individual to pursue, let alone define, what is in their best interest.

The president’s economic protectionism rests on a bizarre rational that blends economics and national security. Congress, not the executive, is given the authority by Article I, Section 8 of the Constitution to “provide for the common Defence and general Welfare of the United States.” But there is no indication even here that this power includes the ability to proactively mold the business climate in such a manner as seems likely to promote domestic prosperity. The Founders erected a high wall between government and the private sphere; outcomes and conditions of private enterprise are beyond the purview of government.

Also published on Medium.

All content protected by copyright. The Politics of Discretion, 2016.
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