Trade is one of the key differentiators Trump was able to capitalize on to stand out in the 2016 election. Now at the helm of America’s trade regime, he has enacted tariffs he spoke about on the campaign trail, probably the most significant of which being those on foreign steel and aluminum, which aside from their domestic economic benefit in the form of employment, hold national security value as well.
Of course, Washington Swamp creatures, Never-Trumpers, and many liberals who knew zero about international trade until last year, have relentlessly accosted the president over his trade decisions, including doom-and-gloom prognostications of price hikes due a trade war with China. To these, Trump blithely responds that we already lost the trade war with China years ago and he’s merely trying to dig us out of the rubble.
In a perfect world, there would be no tariffs. Trump actually reached an agreement with the EU recently stating that our mutual goal is zero tariffs. I doubt that will happen, but it shows that Trump understands that it’s better for no one to have tariffs than for tariffs to exist for only one side. The problem is, most nations do have tariffs, and some have higher tariffs than others. We also do more business with some nations than others. If no other nations had tariffs, we wouldn’t need any either; in fact, we would look like the Global Bad Guy if we did.
But other countries with whom we do business charge us higher tariffs than we charge them. This is obviously an imbalanced situation. Trump is trying to bring balance to a problem that no previous administration was willing to tackle but instead kicked down the road until it landed in his lap. Rather than deal with the problem when it was a smaller problem, previous administrations and Congresses accepted a lying-down, defeated position before large, tariff-happy economies like China, Japan, and Europe. We didn’t hit back with enough tariffs of our own, and prices settled. The subject of tariffs faded from public memory, and voila, we had the “new economic normal.”
Our “normal” is, in fact, a position of weakness. If the health of our economy is built on economic capitulation to China and other countries, we don’t have much of an economy. We’re more like a tribute-paying state, willingly giving away money to maintain the status quo. That’s like an economy being held for ransom. And a lot of American liberals seem to have Stockholm Syndrome.
The key is that in order to get back to a place of even footing with other countries like China, course correction is required, and course correction always causes some level of pain.
This is the idea that overnight-trade-expert liberals and Washington Swamp Creatures can’t seem to grasp. It’s similar to what gets said about Social Security and Medicare’s ballooning price tags every election cycle. No one wants to bite the bullet now, so we kick the can down the road…to our kids’ generation. Well, when it comes to trade, Trump has decided it’s time to actually bite a bullet for a change instead of kicking the can down the road even longer. He’s read about and seen devastation of our economy for decades, and he’s had enough. Now for the average American, it’s true that biting the bullet might mean a little pain in the form of higher prices. Personally, I don’t think it will be anything nearly as bad as the doomsayers (who generally hate Trump and want to make him look bad) predict. China exports to us far, far more than they import from us, which means they need us more than we need them, which means we hold most of the cards. In a dollar-for-dollar trade war, Xi Jinping’s government knows it cannot win. But give it a couple more decades and it could, and that’s something Trump is trying to head off.
It kills me though that rich Swamp elites can endlessly bemoan the specter of a slight increase in prices at the grocery store, the mall, or the Apple store. Big deal! We are helping ourselves in the long run by actually dealing with this problem, no longer choosing to let it nickle-and-dime the country for the rest of our lives. Of course, the average Swamp Creature doesn’t care about Trump’s working-class base, who stand to gain the most from a rectified trade situation. They don’t care if those who aren’t as well off benefit in the long run with jobs. The Swamp Creatures are more concerned about any potential tiny pinprick to their own personal budgets. I feel this is an issue that we need a slight dose of collectivism on—commitment to our fellow countrymen. Their fates being inextricably tied to an ever-enlarging central government, Swamp Creatures can never be relied on to put the needs of the population before their own—that’s how they reached the high perch of Swamp Creature in the first place.
The trade issue is a lesson for a much larger problem, already mentioned—social entitlement programs. I’m not saying we should bite all the bullets at once, but once we’ve bitten and swallowed the trade bullet, learning that it didn’t kill us as everyone said it would, perhaps then it’s time to bite one of the entitlement bullets. The unwillingness of Swamp elites to let Trump make us bite the trade bullet and get it over with, thereby ensuring it will be an even bigger bullet years from now for our kids, is exactly the kind of thinking that everyone before us exercised and which produced the trade bullet in the first place. There wouldn’t have been a trade bullet to bite if past administrations and Congresses had retaliated with tariffs and not loved good economic numbers to get re-elected on more than the long-term economic health of the country.
But that’s what politicians are best at—selling short-term happiness in order to get re-elected while obfuscating long-term pain.
If we don’t do something about entitlements, the next generation will curse us for not having the courage to bite the bullet and fix the problem before it got to them. It’s actually cowardly and hypocritical to punt these problems to our children, the same children we raise to believe that we will always have their best interest at heart.