Trade War Hits Home: Trump's Asinine Protectionism

On MSNBC’s Morning Joe, Steven Rattner presented charts showing how the fallout from Trump’s trade war is coming home.

The video, charts, and an excellent trade discussion by Rattner are on MSNBC.

Steel in Europe is 50% of the cost in the US.

Nearly everybody is a loser.

Soybeans are the US's biggest agricultural export.

There is a deliberate policy by China to target Republican states.

There is absolutely nothing new here. I have discussed all of this numerous times.

However, the Morning Joe produced an excellent non-nonsense interview that was a lot of fun to watch.

Perhaps it will sink home to the doubters if they watch the interview.

Trump's Asinine Protectionism

Don Boudreaux at Cafe Hayek puts it succinctly "Trump is insufferably stupid and officious on matters of trade."

Here is his letter to the WSJ on Trump's Asinine Protectionism.

Editor:

Donald Trump is unjustifiably furious with Harley-Davidson for responding to tariffs in ways that any business in competitive markets must - namely, by minimizing its exposure to these government-imposed artificially higher costs (“Trump’s Motorcycle Club Revenge,” June 27). And he screeches like a banana-republic authoritarian when he threatens to impose more punitive taxes on Harley.

Finally, Trump reveals his cluelessness about competitive business when he suggests that, in moving more production overseas, Harley will suffer because Harley’s “customers are already very angry at them.” Obviously, Harley believes that its customers would be even more angry with it if it charges the higher prices that it must charge were it not to escape as much as possible the higher costs created by Trump’s asinine protectionism.

Sincerely,

Donald J. Boudreaux

Professor of Economics and

Martha and Nelson Getchell Chair for the Study of Free Market >Capitalism George Mason University

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Some readers assert Trump is playing 3-D chess or whatever to get what he wants. The notion is ludicrous.

Why?

Because No Matter What Any Other Country Does, the Correct Action is to Reduce Tariffs.

Mike "Mish" Shedlock

Comments (20)
No. 1-20
Tony_CA
Tony_CA

Rattner is not worth listening. Our system has become a complete joke. It only benefits the .01%.

Stuki
Stuki

"Some readers asset Trump is playing 3-D chess or whatever to get what he wants."

Just as some cheered for Chavez and his "Bolivarian revolution." Dear Leader says jump on TeeVee; some can't wait to fall all over themselves begging "how high, master?"

Curious-Cat
Curious-Cat

When you are dead, you don't know that you are dead. It is difficult only for others. It is the same when you are stupid.

douglascarey
douglascarey

"Some readers asset Trump is playing 3-D chess or whatever to get what he wants. The notion is ludicrous." It is not ludicrous. I am an ardent free trader, but Trump has shown time and again that he has a plan. Look what he did in the primaries. Look how he played the media like a fiddle. Look at his discussions with N. Korea. Give Trump a chance on this. He has earned it.

ZZR600
ZZR600

Well, Trump is highly entertaining if nothing else! Be interesting to see how much more Tesla cars will cost now with increasing metal prices, and no diversified production outside of the US. Maybe this is one of the reasons for the additional $2500 down payment?

thimk
thimk

and old wilbur is sitting at his desk doling out tariff exemptions at his discretion. as of april 2018 1200 companies filed for steel exemptions. why doesn't congress intervene . not a peep from them. wait till the world puts a tariff on t-bills.

El_Tedo
El_Tedo

Off topic, I apologize, but I know there a lot of Hussmanian on this blog. From his most recent opus: "Late last year, we adapted our methods to prioritize the condition of market internals ahead of those “overvalued, overbought, overbullish” warning signs, with no exceptions." Has, perhaps, the most iconic bear of them all finally capitulated?

SMF
SMF

Trump has already clearly stated that what he wants at the end is the removal of all tariffs, what he does not like now, and what I have seen first hand, is that the US before gave away the house for a mere pittance during trade deals. My family outside the US often pays 2X to 3X the price for what we pay for normal commodities here. Why does it cost China $2 to ship to the US, when the reverse cost is $16?

Max66
Max66

Trump wants to create a lot of noise internationally so that the noise at home regrding the investigation by Mueller gets drowned. Of course, it is an illegal investigation but they will find something against Trump. Sad state of affairs in our country. Democratic results are no longer being respected. If everyone would have accepted Trump as the President and supported him we may not have had this state of affairs.

SweetKenny
SweetKenny

I agree with Schiff that it’s all coming down on Trump’s watch which will result in socialist governments - we will look back to now as the good times.

Realist
Realist

It’s hilarious to listen to Trump supporters. They are clueless. They believe whatever Trump tells them; like how the US is being screwed by high tariffs in other countries. The reality is that the US has higher tariffs than every other industrialized country it trades with. What a joke. And all the new tariffs that Trump is imposing will only hurt the US economy as Mish states.

Zardoz
Zardoz

A cavorting fat man has always been a staple of comedy.

Ambrose_Bierce
Ambrose_Bierce

One of the benefits of keeping liberal trade deals is that we can fund government with printed US dollars, the real victim of Trumps trade wars is his fiscal spending package, but I suspect that this is a bait and switch, and that when he backs off on fiscal spending the Congress will decide to curb government spending, (no choice at that point) which will come as a real market shock. At that point Trump takes a victory lap for restoring fiscal conservatism as a plank of the GOP, with Hooverish overtones, and Democrats raising the ghost of FDR (and we all know what the economy was like) but in the near term more like the 1970s, with impeachment or resignation, end of a long and expensive war, and reduced government spending and confidence in government.

Ambrose_Bierce
Ambrose_Bierce

Trump is the socialist (the man made his fortune in bankruptcy court) but if he keeps mingling military and corporate/government business he will morph it into fascism for which he seems well qualified

Sechel
Sechel

this is excellent.

Sechel
Sechel

Rattner made his economic arguments effectively and with clarity. The average man should be able to digest this and see the folly of protectionism.

SleemoG
SleemoG

I am an ardent free trader, but Hitler has shown time and again that he has a plan. Look what he did in the Rhineland. Look how he played Chamberlain like a fiddle. Look at his discussions with the Soviet Union. Give Hitler a chance on this. He has earned it.