Will Trump’s Tariff Diplomacy Usher In a New Golden Age?

President Trump is announcing his tariff policy for his so-called Liberation Day.With the whole world watching, Mr. Trump explains how badly America has been treated in a global trading system that has completely broken down.The old post-World War II system of free trade among the victorious allies is a thing of the past.The admission of Communist China into the World Trade Organization was the straw that broke the camel’s back.Masquerading as a so-called “underdeveloped economy,” China has maintained high tariffs and a wide array of non-tariff barriers. Including, of course, intellectual property theft and forced transfer of technology for any foreign businesses operating in China.Yet, in some sense, China’s import barriers were just the tip of the iceberg.Throughout Asia and the Americas and Europe, our former World War II allies posted tariffs that were often four, five, and six times the height of American tariffs, as well as imposing a panoply of non-tariff barriers — such as quotas, price controls, customs delays, value added taxes, and in Europe’s case even a new carbon tax on imports.Hat tip to Breitbart’s John Carney on that one. All the tariff and non-tariff barriers erected by China and other countries make it virtually impossible to sell our exports to them.Essentially, what Mr. Trump is going to say is you charge us, then we’ll have to charge you. Yet if you charge us less, then we will follow suit.In effect, the theory here is import substitution.Mr. Trump’s tariffs on foreign imports should reduce the demand for them by making them more expensive.Mr. Trump also hopes to expand the market for American-made goods and open the way for an American manufacturing renaissance.That’s what import substitutions is all about.Hat tip to Michael Lind in today’s New York Post.Let Americans buy American products instead of foreign imports.Mr. Trump wants to stop countries like China and Mexico and many others from exploiting cheap labor and local government subsidies and tariffs.The communist state-capitalist China has developed a near-monopoly on medical and manufacturing supply chains. And that has to stop.Reshoring must end, and on-shoring must begin.Instead of the post-World War II consensus of free trade, there’s been a post-Cold War trade protectionist attack on America.Mr. Trump will have none of it. He is fighting back.And, not only is he a tough fighter, but he is also a master negotiator.And here’s a key point: his pro-growth economic policies — including tax cuts, deregulation, greater energy production, as well as tariff diplomacy — is a well-integrated whole-of-government economic powerhouse plan.In many ways, the American economy is the only game in town as far as the so-called global village is concerned. At some point, they have to come to us. And, whatever temporary short-term costs are associated with Mr. Trump’s trade fight, hopefully the other parts of his economic plan will mitigate those problems and will deliver the long-term benefits that add up to President Trump’s vision of a Golden Age for America.From Mr. Kudlow’s broadcast on Fox Business Network.

Will Trump’s Tariff Diplomacy Usher In a New Golden Age?

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