The United States International Trade Commission's (USITC) analysis of Trump's new NAFTA projected modest gains, entirely due to a reduction of uncertainty associated with its rules on digital commerce. (It makes it harder to regulate Facebook and Google.) The gains the USITC attributed to reduced uncertainty from this fairly limited segment of the economy were extraordinary, but they raise the obvious question about the cost of uncertainty in other areas.

For example, Donald Trump is now tweeting threats to substantially expand his trade war with China, raising a wide range of tariffs from 10 percent to 25 percent. If tariffs against any country can be raised or lowered by presidential whim, then it has to create a substantial amount of economic uncertainty. It would be interesting to see how the USITC would assess the impact of this uncertainty on the economy. It would almost certainly have to be an order magnitude larger than any reductions in uncertainty in the digital economy associated with the new NAFTA.