Trump’s trade policy is no policy
At a hearing yesterday before the Senate Foreign Relations Committee, Secretary of State Mike Pompeo had to walk back his earlier pronouncement that not all presidential utterances represented United States policy. Later in the hearing he admitted that presidential comments do, in fact, represent policy.
The problem with that clarification is that the president constantly contradicts himself, so it’s difficult to ascertain what the policy is unless it policy that is changing week by week and day by day. Such policy is really no policy al all.
Trade presents a perfect example. The other day, President Donald Trump tweeted that “Tariffs are the greatest!”
Tariffs are the greatest! Either a country which has treated the United States unfairly on Trade negotiates a fair deal, or it gets hit with Tariffs. It’s as simple as that – and everybody’s talking! Remember, we are the “piggy bank” that’s being robbed. All will be Great!
— Donald J. Trump (@realDonaldTrump) July 24, 2018
Yesterday, standing beside European Commission President Jean-Claude Juncker, Trump announced that the US and the EU were in talks to lower or even eliminate tariffs. Which is it?
It’s all testimony to the chaos that is Trump administration trade policy. The president imposed tariffs on imports from China, to which the Chinese retaliated, moving against US soybeans among other products. The Chinese tariffs caused soybean prices to drop by 25 percent, so Trump announced a $12 billion bailout package for US farmers, a move that was roundly condemned by members of Congress from both sides of the aisle. Senator Ben Sasse, Republican from Nebraska, was quoted in The New York Times as saying: “This trade war is cutting the legs out from under farmers and White House’s ‘plan’ is to spend $12 billion on gold crutches.”
The administration started to move against auto imports, with the Department of Commerce conducting an investigation and holding a hearing on Trump’s proposal to hit vehicles and parts with a 25-percent tariff. With Juncker’s visit to Washington, that is now apparently on hold.
And what did Trump get in return? Juncker told him the EU would buy US soybeans, although it’s hard to tell how that will actually come about since the EU as such does not buy soybeans. (Juncker also said the EU may buy US liquefied natural gas at some point in the future, when the US has adequate LNG exporting facilities and the price comes down. US LNG is currently 25 percent more expensive than what the EU buys elsewhere.)
In what way does any of this resemble policy? Policy is supposed to be a clear and consistent statement of a position. Trump is bouncing around like a pinball when it comes to trade.
The president’s defenders imagine that this is all of this is part of some grand strategy to disrupt world markets, all of which will somehow turn out to the favor of the US in the end. More likely, it is just the president reacting to the news of the day, attempting to straighten out the foreseeable consequences of his dubious trade moves, and to deflect attention away from his other problems.
Also yesterday, the Detroit automakers announced that Trump’s steel and aluminum tariffs were going to be hitting their bottom lines negatively, causing their share prices to dip on Wall Street. What’s next—another auto bailout?
TOURISM IS THE QUIET HERO OF TRADE