Tag: trade

The Tariff King

The fight over the president’s tariffs is taking place in Congress.

Or is it?

“House Republicans blocked on April 9 an effort by Democrats to force a vote on halting the reciprocal tariffs imposed by President Donald Trump,” explains The Epoch Times, “which are currently paused for three months.”

Let’s make that clearer. These now-infamous/much-debated “reciprocal tariffs” went “into effect” immediately after midnight yesterday. As Republicans “sneakily” worked to change the rules to disallow any congressional move to dissolve the president’s declared emergency — which, by Congress’s own legislation, gives the executive a great deal of latitude to change tariff rates — and Democrats moved to do just that, get rid of the “state of emergency,” President Trump put most of his tariff hikes on hold for three months.

Except for those on China — now in effect, at a rate of 125 percent.

It sure looks like Trump’s main concern is trade relations with China, not Lesotho or Israel or anywhere else. And much can be said about China’s trade policies (try selling American consumer goods in China) or respect for intellectual property. But it is the matter of constitutionality that interests me most.

Whatever the alleged merits of high tariffs, unilateral free trade, or any of these issues, these policies should not be decided by the president; the Constitution gives Congress the responsibility “to lay Taxes, Duties, Imposts and Excises” and “regulate Commerce with foreign Nations.”

By handing the president “emergency” powers to change tariff policy in the first place, Congress has abdicated its role in setting tax policy. Republicans in the House seem gung-ho about Trump’s prerogatives. And Democrats haven’t sought to repeal the International Emergency Economic Powers Act, which gives the president legislative taxing authority.

Apparently, Congress wants the president to be king.

This is Common Sense. I’m Paul Jacob.

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Tags Donald Trump, foreign policy, free trade, tariffs, trade

free trade & free markets international affairs

The Real Free Trade Problem?

Post author By Redactor
Post date February 7, 2025
3 Comments on The Real Free Trade Problem?

tariffs, international, trade, economics, TDS, Trump Derangement Syndrome

Trump Derangement Syndrome is not a mysterious disease. He triggers people for reasons. Still, there is no excuse for smart folks to fool themselves into misunderstanding his sometimes genius.

Take the subject of yesterday’s Common Sense, trade protectionism. Trump is plain speaking on this issue, and it is all-too-obvious that Trump harbors old autarkist notions of trade: it’s as if he resents having to pay foreigners for anything.

His apparent resentment of benefiting others — alien others — is what’s so ultra-right-wingéd about him, and why leftists instinctively hate him.

And it’s why many free trade economists regard him as a complete and utter moron. His basic attitude appears to be that trade that benefits The Other must hurt us, and that’s just plain wrong.

But sometimes traders do aim to harm us.

This is where Trump’s attacks on trade with China make more sense. For when we deal with China, we don’t just make Chinese workers and businesspeople stronger, we make the Chinese State stronger — most particularly, the Chinese Communist Party. And that organization has set itself as the enemy not only of the United States but also of all competing states … and the very idea of individual freedom.

Free trade is great, because voluntary trades make both sides better off, and all sides are positively advantaged even when many participants are out-competed and required to re-tool, re-group, and re-invent.

Yet, free trade with those who seek to destroy you is quite problematic. And this is not often figured into the elaborate reasoning offered by free-market advocates.

Trump instinctively knows this, looking warily at those who would use the strength they gain from their people’s trades to transform market power into military power. There exist free traders who think this cannot happen. They are wrong.

The point is to recognize threats and defend ourselves while also embracing the mutual benefits of trade whenever possible.

This is Common Sense. I’m Paul Jacob.

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free trade & free markets international affairs

The 51st State?!?!

Canada, United States, border, trade, economics

“What I’d like to see?” confessed the president. “Canada become our 51st state.”

Why?

“We give them military protection,” he offered.

Then things got weird.

“We don’t need them to build our cars,” Donald Trump added. “We don’t need their lumber. We don’t need them for anything.”

Shocking? Yes. But not just for the disrespect shown to our northern neighbors.

What’s most shocking is our president’s ignorance of economics. While we don’t “need” Canada for any of the things Trump mentioned, we’re better off trading with Canada than not. The sending of “billions of dollars” up north is neither charity nor waste; the gains both sides make are apparent in the voluntary trades themselves.

It’s as if he thinks if “we” must pay anyone, it should be to ourselves, that is, to our fellow countrymen.

Behind this is that old crank notion, protectionism: “we have big deficits with Canada, like we have with all countries.”

Now, it’s true that Canadians send more raw materials to the U.S. than we send to them, and that we send them more dollars than they send us theirs: that’s what “trade deficit” means.

But how is this bad for us?

Trump doesn’t explain. “I look at some of the deals made and I say, ‘Who the hell made these deals?’ They’re so bad.”

Mr. Trump identifies no specific trade rules or agreement; he doesn’t say which are unfair, or why; nor does he say who made them. But the trades that pile up to that overall deficit, each was made by Americans and Canadians who thought the deal best for them.

Trump’s seemingly goofy idea of adding Canadian provinces to the U.S. as new states would have one great benefit: more trades with these good people than ever. This belies Trump’s far, far more troublesome notion that we need nothing from Canada. We need everything. As Canadians do.

That is, freedom.

This is Common Sense. I’m Paul Jacob.

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free trade & free markets international affairs tax policy

Trump’s Tariff Question

If Donald Trump fails to re-take the White House in November (and then for real in early 2025), his legacy may quickly devolve into a matter for historians, not live politics. After people calm down and the culture war stuff recedes (once again, if allowed by events), what will be left to argue over are a half-dozen major issues, which include war, mass migration … and tariffs.

Tariffs have long been Mr. Trump’s major hobby horse; he gets excited about 100 percent levies. The whole business about the “bloodbath” quote was his insistence that American auto industry will be destroyed if Trump himself doesn’t get the chance to erect ultra-high tariffs against automobiles from Mexico.

Trump looks at tariffs on foreign goods as harming foreign nations and helping us, the Americans.

But it is worth noting that economists from Adam Smith and David Ricardo onward have regarded tariffs as chiefly harming consumers within the country that erects them.

At Reason you can read Veronique de Rugy make the classic free-trade case, anew, in “No, Trump-Style Tariffs Do Not Grow the Economy.” If Frédéric Bastiat didn’t convince you, maybe de Rugy will.

But something’s missing. Surrounding Trump’s talk against free trade in general and China in particular there was always another element that neither Bastiat nor de Rugy emphasize: free-trading with China helps Chinese and Americans, sure; gotcha — but it also helps the Chinese state, and its ruling Communist Party.

“Trump is an avowed restrictionist on both immigration and trade,” de Rugy writes. But both unchecked immigration and free trade present problems not economic so much as political. It’s about real bloodbaths, actual warfare, not metaphorical ones.

Even if Trump misdiagnosed the domestic economy, he saw problems with China perhaps more clearly than anyone else.

This is Common Sense. I’m Paul Jacob.

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general freedom

Catching Something

Our civilization depends on our ability to move about and trade.

Which is based, in part, on trust and reciprocity and mind-your-own-business. The basic ‘deal’ is ‘I won’t hurt you if you don’t hurt me.’

But it’s not just manners and morality. When we fear that being around others, especially strangers, could lead to catching a severe or even life-threatening illness, the normal business of commerce breaks down.

Which becomes clear, now that a new disease in China threatens to break out worldwide.

Called the ‘2019 Novel Coronavirus,’ the illness has become widespread there, leading the government to quarantine the city of Wuhan, said to be the epicenter of the contagion.

“The lockdown follows fears that the respiratory disease could become a global epidemic,” writes Isabel van Brugen in The Epoch Times, “and as the United States this week became the fifth country outside of China — and the first outside Asia — to confirm a case of infection.”

“The closures,” said the municipal government, “will continue until further announcement.”

Pestilence and war are the two major reasons for this kind of collapse in normal commerce. But contagion may be less controllable even than war, so learning the lesson Wuhan’s inhabitants are now learning is something we can eagerly import from China right now.*

The lesson?

Have food on hand, in case a pandemic bars you from going to market for days or weeks on end.

Wuhan folk are scrambling for supplies now.

Take it as a cue to shop for staples: stock up on bottled water, beans, sterno cans, and, say — with a tip of the hat to the beset Chinese — rice.

This is Common Sense. I’m Paul Jacob.

* Since my first draft, two more cities have been closed to travel, and six countries outside of China have experienced cases of infection. And questions have been raised about how transparent totalitarian China will be.

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national politics & policies Popular responsibility U.S. Constitution

Congress’s King

King of Diamonds, King Donald, Donald Trump, trade, tariff, power,

Politics today reveals a troubling dialectic.

Thesis: President Trump boasts that he is going to unilaterally “do something” as if he were Emperor, not President.

Antithesis: Then comes pushback from political opponents and the media, castigating our current commander-in-chief for imagining himself a lawless dictator.

Synthesis: This is soon followed, however, by the discovery that the president does have such awesome power.

Legally.

In our constitutional system, can a president can just wake up one day and slap tariffs on imports? Well, numbskulls in Congress passed a law handing the president that specific power.

When President Trump declared an emergency to re-direct money, appropriated by Congress for different purposes, toward building the Wall, many argued that the president cannot usurp Congress’s undisputed power of the purse. True, but irrelevant. Congress had indeed delegated all these undefined and largely unchecked “emergency” powers to the prez.

Last week, as the trade war with China was coming to a boil, Mr. Trump tweeted, “Our great American companies are hereby ordered to immediately start looking for an alternative to China, including bringing … your companies HOME and making your products in the USA.”*

I thought, “Does Trump really think he has the legal authority to order all U.S. businesses to leave China?”

Yes … and apparently he does. It’s called The International Emergency Economic Powers Act.

“One of the enduring phenomena of the Trump era,” University of Texas law professor Stephen Vladeck told CNN, “is going to be the list of statutes that give far too much power to the President, but that many didn’t used to worry about — assuming there’d be political safeguards.”

Or that “the right person” would always be in office.

This is Common Sense. I’m Paul Jacob.

* Note that Mr. Trump did not order the companies to leave, but did assert his “absolute right” to do so.

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