Opinion | Trump’s tariff break is less than the eye hits

Presidents who make major changes in government policy normally put their plans with care. They play out what could happen next. They sweat the little things. Richard Nixon not only decided one morning to fly to China. Ronald Reagan’s tax cuts were mostly part of a decade in the creation. The details of the expansion of health insurance by Barack Obama resulted from countless public debates.

President Trump prefers to shoot before the goal. He explained that he intended to restart America’s relationships with the rest of the world, and has imposed imports with duties tariffs, which shows a disregard for details or collateral damage. Its careless behavior of the public’s business has built up shares and bond markets, caused a recession and damaged the global reputation of America. The president’s decision-making was so unpredictable that the government’s top trade officer was interrupted this week in the middle of the certificate before the congress because the president had just changed the politicians that the official defended.

The original version of Mr. Trump’s plan, which he held on Wednesday, imposed on foreigners at prices that did not make an obvious connection to the national interests of America. The highest tariff rate, 50 percent, applies to Lesotho, a tiny and impoverished nation in southern Africa.

The latest version is not much better. Mr. Trump relies on a tariff of 10 percent on imports of most nations as well as higher prices for imports from the three largest trading partners in America: Canada, Mexico and China. The average tax on imports will increase at the highest level for more than a century and increase prices for many consumer goods. The maximum rate of 145 percent for Chinese imports is intended to areolate this national economically, but the simultaneous tariffs for everyone else will undermine this goal. And while the specified purpose of all tariffs is to expand American production, there is no time to build factories. It will cause pain without benefits.

We would like to emphasize that Mr. Trump has a point about the pain caused by free trade. In the decades in which the United States opened their doors to imports from other countries, many Americans left the country’s industrial core without jobs and decimated. Washington naivety about China’s rise, which is partly achieved by its own trade barriers and theft of intellectual property, is particularly unfortunate.

A revival of American production is a worthy goal. It would not heal in previous wounds, but it could form a basis for future generations of Americans to build life and rebuild communities that are more wealthy and safer.

This is the tragedy of Mr. Trump’s trade war. Instead of addressing the diseases he diagnosed, he started a ruthless campaign that threatens to reject the advantages of trade without providing sensible economic revival.

From the end During the Second World War, American leaders of both political parties tried to expand the trade until Mr. Trump’s first term of office started, and believed that this would increase the nation’s prosperity and contribute to maintaining peace between the nations.

The advantages of their efforts were significant. Globalization has lifted billions of poverty in Africa, Asia and Latin America. It also enriched the United States and suggested innovations by increasing both competition and rewards for success. Wall Street, Hollywood and Silicon Valley have all achieved the advantages of global markets. This is how American farmers, arms manufacturers and pharmaceutical companies have. Nine of the ten most valuable companies in the world are today Americans, some of them due to the openness of the trade of this country.

However, the advantages came disproportionately for the wealthy. In theory, the government could have distributed these advantages better; In practice it didn’t. For many Americans, especially those who lost factory jobs, the availability was cheaper at Walmart an inadequate reward. In a widespread academic paper by economists David Author, David Dorn and Gordon Hanson, it estimated that trading in China between 1999 and 2011 led to a loss of 2.4 million American jobs. Many of the communities have still not recovered. Many former factory workers never returned to work.

Tariffs could be used as part of a broader strategy to expand the country’s production base and achieve more integrative growth. The taxation of imports protects domestic manufacturers from foreign competition at the expense of domestic consumers who, as a result, have to pay higher prices. This compromise is sometimes worth it.

There is a good case to impose tariffs for carefully defined categories of products, including those that are necessary to maintain the security of the country. Customs can also protect American industry from unfair competition if other countries subsidize exports. And tariffs can be effective as a shield for aspiring industries such as electric vehicles. Under President Joe Biden, the United States tried to expand Green Energy Technologies by combining targeted tariffs with funds for research, investments in infrastructure and incentives for consumers. The result was an increase in the factory building.

It is a bitter irony that even if Mr. Trump increases tariffs, the support of these technologies, which are among the most promising areas of domestic production, receives support for these technologies. Some companies already give up their blueprints.

Mr. Trump’s use Tariffs are indiscriminately. It imposes tariffs for goods that do not produce the United States and cannot produce like manganese from Gabon that have to make American companies steel. He puts on tariffs for nations that buy more goods from the USA when they remove all their tariffs for American goods like Israel to the United States, such as Australia, and for nations that have offered. Even after Mr. Trump stuck a few tariffs under pressure from investors and members of his party, the measures he raised have increased the average effective tax rate for imports to the United States to 27 percent, which, according to Ernie Tedeschi, an economist at Yale University, since the early 20th century.

In addition to increasing prices, the tariffs should slow down economic growth. And another danger is: There are warning signs that Mr. Trump’s provocations reduce the demand for government bonds and the government force to offer investors higher interest rates. In this case, the federal debt will be repaid even more difficult.

Mr. Trump and his consultants say that the pain caused by tariffs are necessary to revive household production. However, the construction of factories takes years, and companies have a good reason to doubt that his successors will be retained his guidelines. Companies have little trust that Mr. Trump will keep his tariffs in place. The president has made it clear that his obligations are negotiable at best and, in the worst case, is moody.

Mr. Trump could of course return to the drawing board at any time. But the congress and the nation cannot afford to wait. The president’s behavior makes it clear that the congress has too much authority on the trade in so many questions, and it should act to correct its course and contain its trade powers.

A reasonable reform is a legislative template that was introduced by Senator Charles Grassley, Republican of Iowa, and Senator Maria Cantwell, the Democrat of Washington, under which the tariffs would expire if they were not approved within 60 days. This would preserve the ability of a president to react to emergencies and at the same time prevent a president from causing emergencies. In addition, the approval of the congress would demonstrate the broad political support that is necessary in order to provide companies with confidence in making long -term investments.

Mr. Trump signs up as a miracle healing for a wide range of economic complaints. He still seems to believe his explanation of the first time that “trade wars are good and easy to win”. The truth is that tariffs can help the United States or be able to violate the United States. If the president does not change the course or is forced to do so, these tariffs are violated – and the pain will worsen.