Alternative Approaches to Tariffs

As Trump's devastation of the economy progresses it is worthwhile considering what a thoughtful use of tariffs might look like.  Zyphyr Teachout's latest column in The Nation explores that idea, with dissections of both the MAGA and the neoliberal Democrat strategies.

"Trump’s chaotic, personalized trade agenda is certainly extreme. But so is the opposite vision: tariff abolition, with no guardrails, no democratic planning, and no strategy. Real industrial policy—the kind that builds capacity, disperses power, and supports workers—lives between those extremes. That’s the tradition we should be reclaiming."

Read:

 Trade, Monopoly, and the Fight We Can’t Let Trump Define

Trump's Tariffs Policy Explained

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Clueless

 From the way that the tariffs were rolled out it is clear that Trump really has no clue about the economic effects of his actions or how to manage the process. However, that is not a barrier to the objectives of the 2025 Project.  The chaos created by Trump's flailing executive orders creates a climate which facilitates the destruction of the institutions of government as specified in the Heritage Foundation publications which lay out the Project 2025 agenda.

A good example of how the 2025 authors are now manipulating the process is the recent modification of the tariffs to exempt smart phones and computers from the tariffs.  That is likely to be enough to quell the alarm among the Trump base that depends on social media for its news. Trump clearly lacks the analytic capacity to make that kind of course adjustment, but he is the perfect conduit for those close to him who pull his strings.

 

The Elephant in the Room

... and the probability of detection.

Trump's justification for imposing tariffs on Canada is to force reduction of cross-border ingress of fentanyl and undocumented immigrants.  The contribution  of Canada to both of those unauthorized imports is 1%.  So, even if Trump's initiative in regard to Canada was 100% effective, the impact would affect 1% of the purported problem.  In exchange for the unlikely achievement of that outcome both countries will probably see catastrophic inflation and job losses.  But that is not the elephant.

The real elephant (driver) in the case of fentanyl, of course, is demand.  The real questions worth exploring are why the demand for illicit drugs is so high in the U.S. and what would be required to effectively reduce that demand.  Better support for behavioral health services seems a much more plausible way to attack the substance abuse issue.  What do you suppose  the chances are that such a policy will be supported by Trump and RFK Jr. ?

See:

What is motivating Trump’s reckless trade war?
Robert Reich