As if Trump’s taxes on the consumption of imports of various goods, also known as tariffs, aren’t bad enough, he’s now planning to punish taxpayers again by giving even more handouts to farmers to mitigate the damage of his irresponsible trade policies.
Far from making trade more “fair,” the Trump tariffs have led to tit-for-tat retaliation from the EU, China, and others whose goods have been slapped with import taxes. Rather than backing down as the President predicted, foreign trade partners responded by specifically targeting Trump’s core constituencies with tariffs of their own. As a result, the President is feeling political pressure to relieve their pain. Unfortunately, he has chosen to do so in the most fiscally irresponsible manner, by adding to the considerable taxpayer handouts that farmers already receive, rather than rethink his rash approach to trade.
The President recently tweeted that “tariffs are the greatest!” His new subsidies for farmers put the lie to that statement. Trade is the greatest because it makes us all better off, contrary to the President’s belief that if the other guy isn’t getting ripped off, then it means that you are.
At last week’s public hearing on the Section 232 national security investigation of automotive imports, I argued that the effort is a transparent attempt to advance misguided protectionist policies by citing nonexistent national security concerns. When combined with today’s announcement, it looks as if President Trump will go to any length to maintain his trade war despite the suggestions by his defenders that he doesn’t really mean it and is actually a free trader at heart. Perhaps that is because Trump thinks that having signed a pro-growth tax reform package means that sabotaging the economy is just “playing with the bank’s money.”
It’s unfortunate that Trump sees American workers, consumers, and businesses as nothing but pawns in his geopolitical games, and that his strategies are being dictated by a profound ignorance of trade. If reaching into the pockets of taxpayers is how Trump plans to respond to foreign retaliation whenever he throws a tariff tantrum, the economy is in for a rough ride.
