September 21, 2018
Paul Krugman is on the money in his analysis of Trump’s trade policy. The issue is not just that he is using tariffs. Tariffs can sometimes be useful tools, either to pressure a trading partner to change their practices or, in some cases, to support an industry in need of breathing space.
But no such logic can be applied to Trump’s tariffs. He is angry at Canada and China for reasons that have never been clearly stated and seem to change daily.
He also doesn’t seem to understand the most basic logic of tariffs. He is not imposing taxes on Canada and China, he is imposing taxes on US consumers. If he carries through with all his threatened tariffs, the bill for a typical household will be in the neighborhood of $600 a year. That is a pretty good size tax increase.
But it gets worse. As several news articles have pointed out, Trump is exempting his friends from the tariffs that are being applied to their competitors. This is pretty much the dictionary definition of crony capitalism. Trump is using the government’s trade policy to punish people he doesn’t like, both foreign and domestic, and benefit the people who support him politically.
The amazing part of this story is that Trump doesn’t even seem to see anything wrong with this practice. Having been brought up a spoiled rich kid, he never had to pay any attention to rules or think about the consequences of his actions.
He pretty much said exactly this in his complaint about not having an attorney general. While Attorney General Jeff Sessions has followed Trump’s policies in a wide range of areas, such as not enforcing civil rights laws and arresting immigrants applying for asylum, he is not doing what Trump wants his attorney general to do.
Based on his tweets, Trump considers it the attorney general’s job to protect him and his friends from criminal prosecution and to use the Justice Department to harass his political enemies. Sessions has instead allowed the professional staff in the Justice Department, including the special prosecutor, to determine who should be investigated and which charges should be filed.
There is no reason to think Trump views trade policy any differently than he does the Justice Department. When someone gets him angry, he wants to be able to slap a tariff on them. If he wants to help his political backers, he gives them special exemptions.
There is no policy here, that would require far more thought than we have ever seen from this president. It’s just a spoiled child punishing his enemies and helping his friends.
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