Trump’s Gamble on Tariffs Will Test His Popularity With Voters

Is President Trump bent on political self-harm? It often seems that way. His overall job approval rating still hovers within a point or two of the 50 percent popular vote he received last November. Yet he is losing support on the economy and inflation, the No. 1 issue last year, while his overwhelming success in reducing illegal immigration has reduced the salience of what was the No. 2 issue.Meanwhile, he is taking positions that a critical majority of voters consider simple lunacy. A prime example is tariffs.Tariffs make things cost more. If you slap a 25 percent tariff on imported automobiles, they will cost more than they used to, even if sellers absorb some of their increased costs. Sellers of American-made cars are likely to cost more too. That’s because sellers can raise their prices some distance even while gaining market share.Voters understand this. And they don’t enjoy price increases.When the Biden administration’s spending programs led to sharp price increases, voters were assured they were just “transitory.” That turned out to be wrong. Prices never went back down.More importantly, America had not experienced serious inflation since the 1970s, meaning no voter younger than 65 had any memory of facing sharply increasing prices.Now the Trump administration is explaining that increased prices caused by tariffs will be temporary — another four-syllable word that starts with T. Voters seem skeptical, while investors seem spooked by the president’s rapidly changing threats. Mr. Trump’s job approval on the economy has tumbled.America has not experienced sharply increasing tariff rates since the passage of the Smoot-Hawley Tariff Act in 1930. No voter has any memory of that.At this writing, it’s not apparent exactly what Mr. Trump is proposing on what he has called “Liberation Day” and how it will play out. Only we have seen an example of self-harm on policy: his attacks on Canada.Did any voters expect Mr. Trump to set 25 percent tariffs on imports from Canada? Did any significant number want that? Did any Trump voter want to see Canada become the 51st state?Mr. Trump’s referring to Prime Minister Trudeau as “Governor” may strike some as funny, but it amounted to political self-harm. Mr. Trudeau resigned, and now Pierre Poilievre’s Conservative Party, once far ahead in polls, is essentially tied with the Liberals in the snap election called for April 28. Moreover, both parties are now pledging to retaliate with high tariffs on imports from America.The fact is that America and Canada are pretty much one country economically and have been for a long time. We have our continuing trade disputes over softwood lumber and wheat marketing, which have simmered for years. Years ago, I looked into these issues and decided that America was right on one and Canada on the other, though I can’t remember which was which now.Only over time, we’ve become more tightly linked. The germ of the 1993 North American Free Trade Agreement was the Canada-U.S. Automotive Products Agreement of 1965 — 60 years ago — sought by the Detroit-based Big Three, as they were then, automakers and Walter Reuther’s United Auto Workers, then the leading creative force on the political left.Before World War II, the Big Three had built a separate Canadian line of cars as they had in Europe. It made good sense to meld the supply chains and assembly plants over the Michigan-Ontario border — as it had over the Michigan-Ohio border — and to eliminate cross-border tariffs.As a result, the Detroit Three’s supply chains centered in Michigan extend east into Ontario just as they do south to Ohio and Indiana. This is of huge importance to Canada. About one-quarter of its foreign trade passes over the Detroit River on the Ambassador Bridge, and, given the bridge’s age — it opened in 1929 — and high tolls, the Canadian government is paying for the construction of the new Gordie Howe International Bridge.Suddenly imposing tariffs on autos and parts crossing the U.S.-Canada border wreaks destructive havoc on the Detroit Three and its major suppliers on both sides. It threatens to put them at a commercial disadvantage to the foreign-based automakers whose assembly plants and supply chains extend south from Ohio and Indiana through Kentucky and Tennessee into South Carolina, Alabama and Mississippi.The Trump tariffs also threaten to increase costs for purchasers of Detroit Three autos, who are concentrated geographically between the Appalachians and the Coast Range and politically among Trump and Republican voters. In my light, this policy is a textbook case of political self-harm.Couple that with the president’s attacks on Denmark and threats to nab Greenland. Denmark has been a positive ally, raising its military spending to 2 percent of GDP. It’s also one European country that has been tough on illegal immigration and strong in promoting assimilation. There’s no reason to think Denmark and Greenland wouldn’t collaborate with America on Arctic issues in which, because of Alaska, America is already involved.In terms of trade, Mr. Trump’s goal seems to be autarky: sealing off America from the world. In pursuit of that goal, he is willing to inflict huge, gratuitous damage. Yet as geopolitical analyst Peter Zeihan argues in “The Accidental Superpower: Ten Years On,” with its enormous economy, isolated geography, and post-fracking energy self-sufficiency, America is already closer to autarky than most advanced economies. Imports, as Obama administration economist Jason Furman notes, are only 10 percent of the American economy.Over the years, I’ve observed self-made millionaires with brilliant insights on some issues and absolutely lunatic ideas on others. America and the Republican Party have benefited from some of Mr. Trump’s brilliant insights. We’ll see whether they can endure the self-harm of his lunatic ideas.Creators.com

Trump’s Gamble on Tariffs Will Test His Popularity With Voters

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