Just when I thought I was out, they pull me back in.
Ok, maybe that’s a bit too dramatic, but it’s most definitely how I felt last week when hearing about the latest tariff proposal from former President (and still-GOP-frontrunner) Donald Trump. In particular, multiple news outlets reported last week that the Trump campaign is actively considering a “universal baseline tariff”: a 10 percent “ring around the U.S. economy” that would automatically apply to all imports, regardless of source—and, presumably, above and beyond all the current tariffs already in place. The plan’s details are unsurprisingly non-existent, but Trump did gleefully confirm the idea in a subsequent interview.
If Trump is reelected, of course, the United States likely has bigger problems than tariff policy. (Understatement, I know.) But since economic nationalism remains a bipartisan trend, since nobody on the GOP debate stage seems eager to buck that trend, and since somewhat-more-serious people have floated a similar global tariff plan or defended Trump’s proposal, it’s arguably worth discussing. So, instead of me writing about fun things like Applebee’s or expiration dates or rent control, I get to write about tariffs. Again.
Anyway, as you can probably imagine, I view the Trump tariff plan as economically ignorant, geopolitically dangerous, and politically misguided. And, per those same reports, plenty of other economists, diplomats, lawyers, and trade wonks tend to agree. So, apparently, does the Biden White House. But underdiscussed—if discussed at all—is how the last several years have paved the way for precisely the type of unilateral tariff mayhem that Trump just proposed, and how the Biden administration itself has greatly contributed to the problem.
Newsflash: Tariffs Remain Terrible Policy
Back in this newsletter’s early days, I reviewed the economics of tariffs and the United States’ experiences with them before and during the Trump era, and I’ve done deep dives on China and related tariff stuff both here and elsewhere. So, I won’t dig too deeply into the basics again today. A few points do, however, warrant elaboration in light of recent events and new research.