REUTERS/Leah Millis
Once again, President Donald Trump has cast conventional wisdom to the wind and imposed hefty tariffs on Canada, Mexico and China, triggering market anxiety and ideologue freakouts.
Chill. Predicting the fallout is a fool’s game; wait and see what actually happens before jumping off the Brooklyn Bridge.
We generally believe in free trade, but not in blind dogmatism.
And Trump’s hardball tactics could very well spark a long-overdue shakeup of the global economic order, including a return of key industries to the United States.
As the prez’s tariffs (25% on Canadian and Mexican goods, 20% on Chinese imports) kicked in, critics, whether righty free-trade purists or the lefty #resistance, warned of everything from runaway inflation to a Great Depression.
And it’s true that higher prices are a risk.
But Trump’s out-of-the box approach has proved useful on other issues: His call for removing Palestinians from Gaza, for example, has prompted Arab nations to draft their own plan.
Already, Honda has responded to the tariffs by scrapping plans to produce its Civic in Mexico, opting for Indiana instead.
“President Trump has taken the ‘kick me’ sign off the backs of our workers and manufacturers,” cheered Indiana Sen. Jim Banks (R).
Volkswagen, too, is now reportedly looking at making Audis and Porsches here to avoid possible tariffs on European imports; in January, Stellantis reversed plans to close its Illinois facility after meeting with Trump.
The border taxes can also shore up vital supply lines and domestic production of goods (pharmaceuticals, electronics, raw materials) we shouldn’t rely on other nations — especially enemies! — to provide.
Germany found that out the hard way after becoming dependent on Russia for natural gas; COVID should’ve been our own wake-up call.
Add to all that the national-security implications of pumping US dollars into the economies of foes like China: Last year, the US trade deficit with the People’s Republic hit nearly $300 billion.
The prez is also right that other nations have erected unfair trade barriers to US exports, whether it’s tariffs, quotas, government subsidies, dumping tactics, currency tricks, import licenses or other measures.
Trump’s tariffs might get them to rethink those barriers.
None of this, of course, is to pooh-pooh the risks and short-term pain. A lot will depend on how countries react, how long the tariffs last and how businesses and consumers adjust.
But those who predict unmitigated, long-term disaster have no crystal ball.
Better to reserve judgment and hope for a more favorable economy for all.