Trump’s Tariffs: Beyond Dumb
By Dr. Harold A. Black
blackh@knoxfocus.com
haroldblackphd.com
The Wall Street Journal called Trump’s tariffs “dumb,” and then he rolled out his plan for all to see. Now the Journal is calling them “dumbest.” Let’s recount. First, he said he was going to impose a 25% tariff on Mexico and Canada until they stopped the flow of illegals and fentanyl. Both were threatened equally, even though most of the influx comes across the southern border. Strangely, China, the source of fentanyl, was only hit with a 10% tariff threat. Mexico and Canada took steps, but Trump kept the tariffs on. I had called the “stop illegals and stop fentanyl” demand a ruse. And it was. Trump then said that he wanted to bankrupt the Canadian economy and that the only way to avoid the tariffs was to move production to the U.S.
Trump then said that he was going to impose reciprocal tariffs on all our trading partners to equalize the tariffs across the board between countries. Then came the great reveal of “Liberation Day,” where the reciprocal tariffs were not reciprocal at all. Rather, Trump’s new tariffs were a mixture of tariffs, the trade (goods) deficit and “currency manipulation.” The result was that when Israel announced that it had lowered all its tariffs to zero, the Trump “reciprocal” tariff was not zero but 17%! This was because we run a deficit with Israel. Therefore, in order to get their tariff down to zero, Israel must tell its companies not to sell any more goods to the U.S. when the amount sold equals the amount purchased by the U.S. This is beyond dumb. This is beyond stupid. This means that, because the trade deficit in goods (which ignores the trade surplus in services) is $1 trillion, in order to eliminate Trump’s tariffs, Americans must stop purchasing foreign goods. And this is supposed to make America great again?
The total amount of tariffs on Chinese goods was 54%. When asked how China could get the tariffs lower, Trump officials said that China needed to stop the flow of fentanyl. Trump accused China of subsidizing chemical companies to export fentanyl and of providing a safe haven for Chinese criminal organizations that launder the revenues from the opioid trade.
A statement from the White House said, “Despite multiple attempts to resolve this crisis at its root source through bilateral dialogue, PRC officials have failed to follow through with the decisive actions needed to stem the flow of precursor chemicals to known criminal cartels.”
The Chinese, of course, denied being complicit in the fentanyl trade. But really? In a country as tightly controlled as China, do you seriously think that the government does not sanction the fentanyl trade? The drug and its damage to China’s enemies in the West are surely part of China’s overall strategy to weaken Western economies. What do you want to bet that Xi and his cronies are getting wealthy off the fentanyl trade? There is enough money there to bribe hundreds if not thousands of Western partners.
Yet even if China did take tough action to stop the flow of fentanyl, Trump’s “reciprocal” tariffs would not vanish. They would not go away even if China reduced its tariffs to zero. Again, look at the example of Israel. Since the U.S. runs a trade deficit with China, Trump would still keep his tariffs in place until that deficit goes to zero. The same is true for Mexico and Canada. Even if they reduce the flow of fentanyl to a mere trickle, Trump’s tariffs will stay in place until the trade deficit goes to zero. However, even with zero tariffs, no country in the world is capable of matching U.S. wealth, making a zero trade deficit virtually impossible.
Trump surely knows this. I once wrote that Trump was like Herbert Hoover, who signed the Smoot-Hawley tariff act that helped plunge the country into the Great Depression. Well, both Smoot and Hawley lost when they ran for re-election. Hoover lost and the republicans lost 100 seats in Congress.
Some have written that the Democrat party is dead. Well, Trump has revived them. Unless Trump stops this madness, look for the Democrats to take back the House and possibly the Senate in 2028.
