Trump's tariffs are a loser for him no matter what he does

It's laughable when someone calls Trump a great dealmaker. Actually he's a terrible dealmaker. The only reason anyone claims this is that Trump paid someone to write a book for him called "Art of the Deal." 

His name is on the cover, even though he didn't write it, but that's a far cry from the reality: Trump is incapable of making deals because he isn't a strategic thinker and nobody trusts him to keep his word.

Look at the evidence. In his first term as president Trump failed to make any significant deals. His main claim to fame, or in this case infamy, was botching the United States response to the covid pandemic, which led to about 200,000 unnecessary deaths. 

Now, in his second term, Trump has failed to make a deal to end the Ukraine-Russia war. failed to make a deal to end the Israel-Hamas war, and is floundering in his attempt to use tariffs on other countries as a cudgel to make deals that reduce trade imbalances.

In each case, Trump has failed to stake out a consistent position that would lead to productive deals. Instead, he says one thing one day, then another thing another day, causing the leaders he's dealing with to recognize an obvious truth: Trump can't be trusted, which undermines his attempts to bend others to his will.

With the tariffs on almost every country in the world he announced last Wednesday -- Russia and North Korea escaped tariffs, which shows how much Trump loves authoritarians like himself -- it's impossible to know what goal Trump is pursuing.

It isn't fairness, because Trump imposed tariffs on countries that have zero tariffs on United States imports. It isn't reducing trade imbalances, because that's impossible to achieve (we buy lots of vanilla from Madagascar, as it isn't grown here, but Madagascar can't buy much from us, being such a poor country). It isn't bringing factory jobs back to the United States, because this would require keeping high tariffs in place for years to reassure corporations of a long-term change in tariff policy, but Trump has already begun negotiations to reduce or eliminate the tariffs he imposed five days ago.

The big problem for Trump is that regardless what he does with tariffs, he's going to be a loser.

That's what happens when a pathetically poor dealmaker tries to use blunt force to get their way without being clear about what they're trying to achieve, and without establishing a negotiating approach that could result in a win-win for both parties.

Currently China, Canada, and the European Union are threatening to impose counter-tariffs on United States goods in response to Trump's heavy-handed imposition of tariffs on goods exported from their countries. Given Trump's childish approach to disputes -- if you hit me after I hit you, I'll hit you even harder -- an international trade war seems likely.

That's why economic forecasting experts have raised the risk of a recession here in the United States up to about 50-50. Worse, this probably would be a recession with dreaded "stagflation."

Meaning, higher inflation caused by tariff-induced price increases as imported goods become more expensive, and higher unemployment caused by supply chain disruptions along with a weakening of both business and consumer confidence -- totally understandable given the trillions of dollars of wealth erased in the stock market after Trump announced his tariffs.

Exacerbating Trump's tariff problem is the absolutely screwy way the so-called "reciprocal" tariffs were calculated, as I laid out in "Not a surprise: Trump's tariffs are based on lies." 

Given Trump's notorious disregard for the truth, it isn't surprising that yesterday when he revealed his so-called "reciprocal tariffs" on goods imported to the United States from other countries, massive lies were used to support his massive and economically destructive tariffs -- which amount to a gigantic tax increase on the American people. 

Noted economist Lawrence Summers has said that Trump's tariff policies are the economic equivalent of creationism: a crackpot idea that has no evidence backing it up. This makes it much more difficult for leaders of other countries to take Trump seriously when they engage in tariff negotiations with him. He basically has no good arguments to use, other than his habitual mob boss approach: "Do what I say or I'll break your kneecaps with a baseball bat."

That may work with some small powerless countries. It won't work with larger countries, whose citizens and leaders don't like to be pushed around by the United States. 

Thus we're probably in for a very bumpy road, economically. Get used to high stock market volatility with big price drops mixed in with periods of optimism, only to be followed by more declines. This is good news for Democratic chances in the 2026 midterm election. However, it's bad news for both Americans and the world.

All we can hope for is that Trump changes his mind about tariffs and realizes this is a losing proposition for him. But betting on Trump being reasonable rarely pays off, unfortunately. 

Comments

[Danner]

I don’t know if all the Trump haters are going to turn out being correct on this. (I’m no big fan either, but I don’t think he’s the sinister character portrayed in partisan media and childish Facebook memes). The age of automation and AI are coming. Do you really want to be left in a country unable to produce its own stuff and in utter decay from its former glory when it was a producer of goods? One only needs to look at the transformation of China since we traded our jobs and manufacturing for cheap crap at Walmart (that falls apart in record time). China is a gleaming modern civilization; the US is a decaying has-been. We shall see.

I also don’t understand that outcry over the stock market—the play thing of the wealthiest among us. Average ordinary Americans have been barely scraping by for over a generation now and neither party has seemed to give a damn about it. The Democrats (my party) decided that race and gender fights were the best diversion for handling their lack of solutions. Republicans, now joined by MANY former Democrats, seem to actually have a plan. I’ve really appreciated hearing about it from former Dem, now Secretary of the Treasury Scott Bessent and others in the administration. Do I wish it didn’t have a guy like Trump at the top of the ticket, yeah. But more and more it’s starting to appear like maybe he is including all Americans in a plan for a better future. And maybe he’s the only guy who’s truly up for the job. Maybe all the crap I willingly swallowed about him (like “the very fine people” BS) was all mostly lies and partisanship from an establishment that absolutely did not want to budge from their globalized plans for the future. I really don’t know anymore except that I do know I’ve been betrayed again and again by voting for Democrats. Sorry, I know this will not sit well with you.