Trump's Rationales For His Tariffs Are Incoherent And Contradict Each Other
Bring back manufacturing? Raise revenue? Negotiate with every country in the world? Trump can’t have his cake and eat it too.
“I think tariffs are a means to an end, and that end is bringing the manufacturing base back to the U.S.,” Bessent said on Fox Business in February. This is, quite plainly, the point of tariffs. A country imposes a levy on imports as protection for the domestic market. This disincentives imports while incentivizing domestic production, especially if paired with an industrial policy that subsidizes or promotes domestic industry.
That is what the Biden administration did with its combination of tariffs and industrial policy enacted through the Inflation Reduction Act and the CHIPS & Science Act. Those two laws provided subsidies to build domestic production of microchips, electric vehicles, batteries and various other products for the clean energy sector. To protect these infant industries, Biden imposed tariffs, largely on goods from China where the industry is more developed. The most stringent of these was a 100% tariff on Chinese electric vehicles.That was a targeted and strategic pairing of tariff policy and industrial policy aimed at reshoring jobs and building entirely new manufacturing industries. This is not what Trump’s “Liberation Day” tariffs look like. Rather than strategically designed tariffs on countries with known unfair trade practices or targeting China’s unbalanced export economy, Trump’s tariffs hit almost every country in the world, including those that export products to the U.S. that cannot be manufactured or acquired here. No one can grow bananas in the United States nor do we have vast diamond mines.
At the same time, Trump is doing nothing to promote domestic industries or protect American workers. He is trying to unilaterally gut or not implement the Inflation Reduction Act’s subsidies meant to build domestic manufacturing capacity in the clean energy sector, and he’s called for Congress to repeal the CHIPS & Science Act. He is also actively working to undermine workers through National Labor Relations Board rulemakings and other anti-union and worker practices.Still, there’s a reason this is the main rationale the administration promotes: It makes sense to the public and has public support. But it makes no sense when you look at the other explanations.
https://www.huffpost.com/entry/donald-trump-tariff-rationales_n_67f43312e4b09643222ccc46
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