Over the weekend, President Trump announced sweeping, broad-based tariffs across all Canadian and Mexican imports at a 25% tax rate (with Canadian energy products at a 10% rate), with goods manufactured in China also subject to a tariff tax of 10%. He has long promised to start this trade war, and in his first term famously said trade wars are easy to win. Easy, maybe*. Harmful to all parties, certainly. Beneficial to the U.S. in the long run? Doubtful.

In Mr. Trump’s post over the weekend, he is beginning to acknowledge that tariffs will be harmful, and will cause pain, but insists it will be worth it. Does this remind you of anything? Like Mr. Biden telling us all his inflationary spending will be worth it in the future? Insisting that “no economist” predicts inflation ahead (ignoring all the economists, including Larry Summers the former Democratic Secretary of the Treasury). Mr. Biden just wanted to spend on his parties priorities, and used the excuse of Covid. Mr. Trump just wants to have his trade war, despite the almost unanimous opposition of economists of all stripes. As I commented after the election, which let us remember, was not a very large margin of victory against a historically bad prior administration with a candidate that was widely viewed as incompetent, Mr. Trump really had a mandate only to get prices under control and to stop immigration. His stubborn idea to raise prices via tariffs is not going to go well, especially in an economy with effectively full employment. There are no people to take back all those manufacturing jobs he covets, especially given the planned goal of a massive deportation operation. This is just going to raise prices and dramatically harm the U.S. and it’s near neighbors, if the tariffs are of any substantial length. Prior to the airline crash this past week, we were at Peak Trump. His initial reaction to blame the crash on DEI and Democrats is, charitably, unpresidential, given we had almost none of the facts, and reminds many Americans why they had to hold their nose at the voting booth. We are now to his most controversial nominees (RFK, Jr. and Tulsi Gabbard, both long time hard-core leftist Democrats), and before he even gets any legislative wins in place, Mr. Trump declares a trade war. And while these are just our top three trade partners, he has also threatened Europe (in addition to Russia and the other BRICS). In general, it’s not a good idea to declare war on the entire world. This could be Mr. Trump’s Afghanistan moment, from which his popularity begins to decline and never recovers. And the longer he keeps the trade war going, the more certain that possibility will become. Our best hope, and surely Mr. Trump’s strategy, is to quickly get Mexico and Canada to agree to something that will allow him to declare victory. Since Mr. Trudeau is a lame duck, it’s hard to see him wanting to help out a man who has humiliated him recently. We shall see.

I’ve written repeatedly about Mr. Trump’s tariff views over the years; almost everything he says on trade is wrong, but it all begins from his view of the deal–in his view, each deal creates winners and losers, and it’s his job to get as much of the win as possible. So others need to lose. But voluntary trade always–always–leads to both parties perceived advantage. Nations do not trade, individuals do. And Americans have always voted with their pocket book that they’d prefer lower cost for any given product or service. They may prefer to buy perceived Made in the USA products, or they may prefer Chinesium. But when their costs go up, they will know precisely who to blame. Let’s remember that Mr. Trump trashed NAFTA as the worst trade deal ever, then made very minor changes in support of UAW demands on auto manufacturing and the environment, and Mr. Trump proudly in 2020 declared:

The USMCA is the largest, most significant, modern, and balanced trade agreement in history. All of our countries will benefit greatly.

And indeed we have. But now Mr. Trump is trashing a framework that he called the most “balanced trade agreement in history.” Our economies are completely interconnected, and higher prices mean higher component imports for our own production. Even if one were to agree with Mr. Trump’s goal, one cannot reverse an aircraft carrier’s direction in an instant. It took years to get to the interconnected and efficient global economy we have, and the only thing that could quickly change that is a global economic collapse. Smoot-Hawley tariffs helped do that in the Great Depression, let’s hope Mr. Trump relents before things get that bad again. As Mr. Trump says while hawking his watches, “It’s Trump Time!”

There is so much more we could say; I’d be happy to discuss any aspect of this in the comments.

* E.g., his threatened tariffs against Columbia, which quickly led to the Columbians rethinking their willingness to take back their portion of the illegal immigration wave.

EDIT UPDATE: