I'm a conservative: Trump's tariffs poster board is a prop when we need a plan

Originally published in the Columbus Dispatch, this is a slightly expanded version that goes into more detail. I truly appreciate the Dispatch for their willingness to include contrarian voices and headlines that help to sell newspapers. Just a few hours after the Dispatch version of this column was published on April 9, President Trump “paused” the punitive tariffs on most countries other than China. As of this writing, the President’s tariff plan remains unclear.

Are President Trump’s tariff threats a negotiating tactic to lower trade barriers or a long-term plan to raise the cost of imports to promote domestic production? Were they imposed to reduce consumer prices or increase economic growth? Do you want to lose weight or eat more?

In each case one must choose because you can’t do both, at least not without having a detailed and targeted plan. And, no, despite the infomercial claims, you can’t actually eat more and lose weight unless you also actually work your butt off.

On trade, Mr. Trump’s poster board isn’t a plan, it’s a prop. His press conference was a fad-diet snake-oil sales pitch. Those who claim it’s some form of four dimensional chess are displaying incoherence bordering on fantasy fed by blind partisanship.

And — hat or no hat — it most certainly won’t make America great again.

Here’s the President’s premise: the global trading order built up over the past 50 years has been fundamentally unfair to American companies, resulting in the loss of manufacturing capability and the jobs that go with it. In addition to the job losses, we’ve also grown so dependent on foreign producers that it has become not only an economic problem but a threat to our national security too.

Much of that is true.

I built my career in the industrial manufacturing sector, mostly in and around Ohio. I spent thousands of hours walking the floors of steel, lumber, and paper mills, auto assembly plants, and glass factories. I got to know the people who worked there, and the communities built around them.

Many are now gone. Even if some of those industries come back, most of the jobs never will.

Fifty years ago, nearly a third of American workers were in manufacturing. Today, it’s less than ten percent. Few Americans have even set foot inside an industrial facility. Too many of us have no idea what it takes to make the things we buy and little appreciation for the people who make them.

The “creative destruction” of capitalism that replaced horses on dirt roads with engine-driven horsepower on asphalt also eliminated most of the jobs for farriers and buggy whip makers. It’s hard for those individuals who bear the burdens of change but it is nonetheless a necessary part of progress that serves so many more. It’s also demonstrably superior in raising human living standards to any other economic system ever created.

That said, the COVID shutdowns exposed the risks of our extended global supply chains as virtually none of our consumer goods, industrial machinery, or military equipment can be fully sourced from domestic suppliers.

These are real problems that Mr. Trump is right to address. It would be helpful if his proposed tariff policies could resolve these challenges. They won’t.

International trade works because countries have natural resource, labor, geographic, or structural advantages to produce some goods more efficiently than other countries. Even if the U.S. could produce everything we need, it would be inefficient to do so. That’s why we’re economically better off buying from other countries the things they make more efficiently and selling to them the things we make better.

Economists call this comparative advantage.

Unfortunately, the cold math of comparative advantage that lowers prices and drives economic growth doesn’t always work best for the overall well-being or security of our nation, or the warm-blooded humans within it.

With just a few rare exceptions, every country has erected significant barriers to free trade to protect favored industries, domestic food supplies, or for strategic defense. Many, including the U.S., have imposed significant regulatory costs and public policies that indirectly create trade barriers or skew the math on production for which we would otherwise have a comparative advantage. In many cases, prosperity itself drives these changes as governments rightly respond to their citizens’ demands for environmental, safety, and wage protections.

It’s also true that the U.S. market is more open to foreign producers than many of them are to our products. It’s reasonable to work to fix the imbalance. It might even be a perfect use of Mr. Trump’s preferred strong-arm tactics to do so.

What isn’t reasonable is to expect those actions to simultaneously lower prices and stimulate domestic production. If the Trump tariffs remain, prices will rise and so will inflation. If he negotiates the tariffs away, the incentive to move production to the U.S. will diminish. 

It’s even more unreasonable to think any boost to domestic production or jobs will happen quickly, if at all.

Just look at the $20 billion Central Ohio Intel computer chip plant supposed to open this year that’s now pushed backat least until 2030, if at all. It’s supported by billions of taxpayer dollars. Or consider the recent announcement from Microsoft that they’re abandoning their $1 billion Licking County data center plans. Politicians propose; markets dispose.

By far the greatest threat to domestic business investment is uncertainty. Mr. Trump starting a global trade war has created nearly as much uncertainty as the COVID shutdowns did. No rational business owner will choose to invest the capital or time to build a production facility in an environment of public policies manifestly at odds with each other.

There’s still time for President Trump to drop the poster prop and return to reality. But time is running out. Like all wars, any plans that might have existed are obsolete the moment the first shot is fired. We don’t have a plan, and with our $36 trillion national debt, our ammo is already running low.