The Promise of Tariffs

If the secret of authority is never to disappoint, as critic Walter Benjamin put it, then what a gamble President Trump is running by throwing up punitive tariffs on America’s top trading partners. He had previously suggested a month’s delay on threatened levies of 10 percent on Communist China and 25 percent on both Canada and Mexico. Yet the president’s press secretary says that the tariffs are full steam ahead. “Promises made and promises kept,” she says.As of Friday afternoon, it’s not clear if Karoline Leavitt’s remarks amount to bluster in fast-moving negotiations or confirmation that the tariffs are moving ahead for Saturday. Mr. Trump vowed, too, in Oval Office remarks to put new tariffs on steel and oil, among other goods. It was enough to prompt, for some moments, a retreat in the markets before they stabilized. The Dow fell 0.75 percent, the S&P 500 fell 0.50 percent, and the Nasdaq dropped 0.28 percent. One could well imagine the threat of tariffs on this scale, implicating hundreds of billions of dollars in imported goods, would be enough for Mr. Trump to secure the demands he is making from Canada, China, and Mexico. That, at least, was how Mr. Trump’s advocates during the presidential campaign framed his use of tariffs as a cudgel for negotiations. The ultimate goal was said to be reciprocity between America and its trade partners.The efficacy of that strategy, though, is approaching a moment of truth — and fast, just days into Mr. Trump’s new term. At a time when inflation is stubbornly persisting at levels higher than the Fed’s 2 percent target — 2.8 percent over last year, in today’s reading of the personal consumption expenditures price index — it is sobering to consider the prospect of new tariffs making consumer goods even more expensive. That’s especially true since frustration over high prices at the grocery store helped propel Mr. Trump’s victory on Election Day. Asked about the prospect of those prices leaping again, Ms. Leavitt pointed to Mr. Trump’s track record on inflation. “Americans who are concerned about increased prices should look at what President Trump did in his first term,” she said, adding he “is going to do everything he possibly can to cut the inflation crisis.”Yet Ms. Leavitt “declined to speculate on whether” the president would scale back the tariffs if prices increased, our Bradley Cortright reports today, and she “did not share details on what, if any, products would receive an exception from the tariffs.” Dodges like that make it seem like the White House is essentially making policy on the fly without the careful planning and consideration warranted by such a momentous shift in the terms of trade.Could this lead to new questions over whether Congress has delegated too much tariff power to the president? After all, the first power the Framers assigned to Congress, in Article I, Section 8 of the Constitution, was “to lay and collect taxes, duties, imposts, and excises.” Tariff debates used to roil Capitol Hill as sectional interests sought advantage in the terms of trade. Yet after World War II, Congress allowed the White House to take the lead on tariff policy.One doesn’t want to discount the possibility of a last-minute reprieve on imposing the tariffs, or that Mr. Trump could secure the concessions he is looking for. Yet even the lame-duck Canadian premier, Justin Trudeau, appears to be talking tough as the tariffs near. He avers he has a “purposeful, forceful, but reasonable, immediate response” to the tariffs, and that Canada will not “relent until tariffs are removed,” Mr. Cortright reports.If tariffs might trigger inflation, the direr concern is that they could spark a trade war. The last time America “experimented with a tariff shield, the results were disappointing,” the Sun noted in an editorial titled “Smoot-Trump?” That was a reference to the high tariffs enacted by America in 1930, which sparked retaliation and helped turn the downturn of 1929 into the Depression. It’s a cautionary tale as America stands on the brink of a new wave of tariffs.

The Promise of Tariffs

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