Trump has declared world trade war, disrupting business plans, abrigating contracts, upending consumer budgets, rendering $billions of productive investment useless, hammering Americans’ retirement portfolios, and killing jobs. It’s much worse than expected, which was already bad. For the first time, an American Administration is deliberately trying to engineer a global recession—or worse. And it’s based on discredited poverty-inducing 17th Century economics. It’s pre-Adam Smith. It’s primitive. And it’s also based on unimaginable paranoia. What does it even mean when Trump says “other countries have been ripping us off” and other such nonsense? Countries don’t trade. Private individuals do. When a foreign company exports its product to the U.S. to offer for sale, and an American decides to buy it, both sides win. Trade is WIN-WIN. Who's getting “ripped off?” Nobody.
Economically, Trump’s collectivist premise that this will “make America wealthy again” really means make the government wealthier. The money raised by the tariffs—which will be much less than Trump dreams—will not enrich the average American. It will be sucked out of American consumers to enrich the government. Somebody’s getting ripped off, alright—American consumers, American businesses that depend on global trade, and foreign companies that supply the goods that enrich Americans’ lives. Trump cares about America, in the same sense as a big government Progressive—but he doesn’t care about Americans.
Trump’s trade war is not only economically destructive. It is immoral. It violates the inalienable individual rights of Americans to freely trade with other people. Economic freedom is fundamental to Americanism. Trump is trampling all over the American Dream.
Too many Americans have been flipping out over a few Federal workers losing their jobs and some spending being cut. But this is penny-ante stuff—and in principle positive. The real danger is in Trump’s trade war. I hope Congressional Republicans get a backbone, join with Democrats—as 4 rational Republicans just did on Canada tariffs—and outlaw Trump’s whole tariff scheme, and curb the presidential power to impose tariffs willy-nilly by executive order—a power no president should have. No, it’s not the end of the world—not yet. Perhaps the hope that this is all a negotiating ploy, and things will ultimately work out, is still alive. But we’re in dangerous territory. Make no mistake. Trump has led our country into taking the first step down a road that ends in World War III. Congress must stop Trump on this issue. That would really be Putting AMERICANS First.
At this posting, the stock market is experiencing a massive coronary.
But there is one potential silver lining developing. Trump’s unconstitutional power grab may be jolting Congress into growing a spine. The Washington Post reported . . .
A bipartisan bill that would give Congress final approval on tariffs imposed by a president was introduced Thursday by Sens. Chuck Grassley (R-Iowa) and Maria Cantwell (D-Washington). The bill seems to have little chance of passage but underscores the unease among some Republicans with Trump’s tariffs plan, which sent shock waves through financial markets and rattled business owners around the world on Thursday.
I’m not holding my breath. Maybe enough Republicans will join all Democrats in stripping Trump, and the presidency, of it usurped power to impose tariff taxes, which Constitutionally belongs to Congress. Unfortunately, too many Republicans are blind Trump backers, Democrats have their own protectionist problems. But “I’ll keep my fingers crossed.”
Related Reading:
Trump just imposed the largest tax hike since 1942 without congressional approval
Trump’s tariffs are a tax by another name, and the power to levy taxes lies with Congress.
If Trump were trying to implement an income tax hike of similar magnitude by executive order, it would be plainly unconstitutional. Everyone knows that only Congress can set tax rates. What’s different about tariffs? On its face, nothing. Article I, Section 8 of the Constitution states: “The Congress shall have Power To lay and collect Taxes, Duties, Imposts and Excises.”
The McKinley Tariff that Trump has said he admires was not an executive order signed by President William McKinley; it was legislation sponsored by McKinley when he was chairman of the House Ways and Means Committee. So, too, the 1930 Smoot-Hawley Tariff Act — which did much to worsen the Great Depression — was passed by Congress. It was not an executive order from President Herbert Hoover.
The problem is that, since the 1930s, Congress has delegated considerable authority to the president to set tariff rates. But, as in so many other areas, Trump is stretching executive authority beyond the breaking point.
The United States has done much better during the past 50 years than other industrialized economies: U.S. GDP per capita is 2.4 times larger than Japan’s and 1½ times larger than Germany’s. In October, just before Trump’s election, the Economist proclaimed the U.S. economy “The envy of the world.” How is this an emergency?
“This is a shocking abuse of the president’s authority to declare national emergencies,” she told me. “I don’t think that will stand up to a court challenge.” It is imperative that Congress take back the power to set tariff rates. Only elected legislators are allowed to raise taxes, and only elected legislators should be allowed to raise tariffs — which are simply taxes under another name.
Phony Liberation From a Phony War
Hillary’s Cave-in to the Left on Free Trade
NAFTA, Whatever its Flaws, Was a Good Thing
‘Buy American’ is UN-American—Harry Binswanger