A Terrible Solution to a Nonexistent Problem

What’s the actual problem Donald Trump is trying to solve with tariffs? 

It isn’t that the United States is being victimized by an imbalanced global tariff regime, because that isn’t happening; it isn’t that the post–Cold War liberal trading order has seen other countries romp while the United States stagnates, because that hasn’t happened, either; it isn’t “deindustrialization,” which hasn’t happened in the United States, or even a radical collapse in the availability of factory work, which hasn’t happened, either. 

Let’s look at these supposed problems one by one.  

1. What about those unequal tariffs? 

One of the very stupid claims one hears from time to time is that Trump is engaged in a far-eyed Machiavellian scheme to lower worldwide tariffs, using access to the U.S. market as a cudgel to beat our trading partners into accepting a low-tariff settlement. The most obvious problem with that line of thinking—besides the ridiculous fantasy involved in believing that Trump thinks more than a news cycle ahead—is that we already had low worldwide tariffs before Trump started mucking around with things. 

In 2014, Barack Obama was in the White House and Donald Trump was still a game-show host nobody took seriously as a presidential candidate. What did the tariff situation look like worldwide? North American trade was very close to tariff-free, with no tariffs at all on most goods under NAFTA. China imposed an average tariff of 4.74 percent when weighted for trade (meaning the average on the value of goods actually imported rather than the average on-paper rate across categories), with about a quarter of goods entering the country duty-free. Germany’s trade-weighted average tariff was 2 percent, with a majority of goods (54 percent) entering the country duty-free. Mexico’s trade-weighted average tariff was 1 percent, with almost all goods (83 percent) coming in duty-free. Canada’s trade-weighted average tariff was 1.43 percent, with 68.8 percent of goods entering duty-free. The United States maintained a trade-weighted tariff averaging 1.69 percent, with about half of goods (51 percent) entering duty-free. 

The notion that the United States spent the post-Cold War era (the era of robust globalization) with very low tariff barriers while the rest of the world fortified its domestic industries with high trade barriers is a fiction. 

That is why so much of the trade diplomacy of those years was directed at reducing non-tariff barriers to trade, which result in part from the fact that different countries have different environmental and safety standards, different labor practices, different tax rates, different kinds of financial regulation, different government-contracting procedures, etc. That’s what things like the World Trade Organization and free-trade pacts are meant to address—and did address quite successfully in the case of NAFTA.  

2. But isn’t the United States losing out? 

Another intensely stupid claim is that Trump is trying to stop the United States from getting “ripped off” by the American-led liberal economic order (under which U.S. economic growth has outpaced that of most of our major peer competitors).

The historical record tells a different story. 

In the 1980s, when what we now call “globalization” really started to take off, 27.1 percent of all economic growth in the world came from the U.S. economy—and Donald Trump was at the time going around talking about how we were getting hosed by the second-place performer, Japan, which came in at … 6.3 percent. Germany—still “West Germany” back then—was No. 3 at 5.8 percent. The United States had about three times the population of West Germany but accounted for five times the economic growth. That was a pretty good decade. 

But the 1990s were bananas. In that decade, the United States accounted for 41.6 percent of worldwide economic growth, roughly what was enjoyed by No. 2 Japan, the entire European Union, China, and the United Kingdom—combined. That wasn’t because the United States was cowering behind high tariff walls and practicing nationalist-populist welfare chauvinism—Bill Clinton was out there negotiating free-trade deals and complaining about how he was serving Dwight Eisenhower’s third term and kowtowing to the bond market, and the budget was moving in the direction of balance. The United States was extraordinarily engaged and outward-looking in those years. We didn’t thrive because we were practicing Trump-style porno-gilded game-show Juche—we were thriving because we invented the digital economy and invested tons—literal tons and tons and tons, if you stacked up $100 bills on pallets—of money in new businesses and new products. 

The next decade is when China really shows up. From 2000 to 2010, China and the United States each accounted for just under 15 percent of worldwide economic growth. For China, that meant collecting the long-delayed fruits of industrialization at gunpoint and a sustained growth spurt that has left the country as rich as … Mexico, almost: The World Bank has China’s GDP/capita at $12,614 as of 2023, a bit behind Mexico’s $13,826 and a bit ahead of Serbia at $12,282. 

That’s about 15 percent of U.S. GDP/capita ($82,769). If U.S. GDP/capita were your bill at a restaurant, you’d tip more than China’s GDP/capita. 

So, no, the United States didn’t get “ripped off” by trade liberalization or by the transformation of a few emerging economies (many of them following what was known as “the Washington Consensus”) from states of desperate poverty to lower-middle income countries. The United States did really, really well in those years. But now there are more Indians with potbellies and fewer Chinese people cooking over open flames in single-room huts, so, woe is us.  

3. What about deindustrialization? 

One of my least favorite items in the great litany of stupidity. U.S. industrial production today is right around five times what it was in the supposed golden age of the 1950s. Manufacturing output today is half-again as much as it was in 1990. When your factory workers are producing more than 50 percent more value than they were a couple of decades ago, you aren’t suffering from “deindustrialization.” 

4. But what about those factory jobs? 

When Eisenhower was elected in 1952, there were just under 16 million Americans employed in manufacturing. Now there are just under 13 million—a decline, yes, but not an especially dramatic one, though the population is bigger. That manufacturing decline adds up to around 3 million jobs in an economy with 160 million to 170 million employed people, or less than half the number of job openings there were in February. 

Losing your job can be very hard. Selena Zito writes movingly about the disruptions that are being caused by the closure of a glass factory in Charleroi, Pennsylvania where the jobs are being shipped off to faraway … Ohio. During the first Trump administration, U.S. glass manufacturers complained to the U.S. International Trade Commission that they were being victimized by Chinese “dumping,” and the USITC disagreed, finding, among other things, that there wasn’t any convincing correlation between low-priced imports and the financial difficulties of the U.S. glass industry: 

Subject imports did not significantly undersell the domestic like product and did not have significant adverse price effects on the domestic industry’s prices during the POI. In addition, there appears to be a lack of correlation between the performance of the domestic industry and subject imports. As subject imports declined in 2019, domestic producers’ production and shipments continued to decline and by greater amounts than from the prior year. Indeed, the domestic industry’s worst financial performance was experienced in 2019, when subject import volumes were at their lowest point.

My friend Selena wants this to be a story about hardworking Americans being victimized by the commies in Beijing, but this is a case of some private-equity guys in Midtown Manhattan who owned a glass business in Pennsylvania and another one down the road in Ohio and who decided, as private-equity guys are wont to do, that they could get more overall value out of a single plant with fewer workers. 

And if you read news accounts of the pain-in-the-ass union goons the private-equity guys are dealing with in Pennsylvania, you might sympathize a little. “We are fighting an evil empire,” the local union boss said, “in these money groups and capital investors that only care about their pockets and not ours.” It is true that investors care about their own pockets—in many cases, management has a legal obligation (“fiduciary duty”) to do precisely that first and foremost. The point of a glass factory is to manufacture glass products, not to manufacture jobs. The point of an investment fund is to produce returns for investors. Call them “evil” if you like–nobody is stopping these guys from investing their own capital in a glass factory. But it’s the same old stupid 20th-century labor politics. 

You can’t fix that kind of thing with tariffs, either. 

Trade has made the United States richer. A liberal global economic order that allows for low-friction trade has made the United States both richer and more powerful. And pissing that away because Donald Trump doesn’t like foreigners and Selena Zito’s pet yinzers think they are entitled to jobs for life down at the glass factory is indefensible stupidity rooted in fear and ignorance and wishful thinking. 

Tariffs are not the solution to that. If anything, tariffs are likely to make the underlying economic reality worse as it becomes more expensive for U.S. firms to rely on global supply chains, more difficult for U.S. firms to access export markets, and easier for badly run companies to keep capital and labor locked up in their underperforming but protected businesses by a government that wants to treat makework factory jobs as a social welfare program. 

Words About Words

So, what’s a gerund? It’s good to know!

Like a lot of formal English grammar, gerunds—verbs made into nouns—in our language first were described by analogy to Latin, and there are still a few Latin gerunds commonly used by English speakers, e.g., modus operandi and modus vivendi, a “way of working” and a “way of living,” respectively. English gerunds take the present participle form, meaning that they end in –ing: The Importance of Being Earnest, “Breaking Up Is Hard To Do,” “Pimpin’ Ain’t Easy.” As in Latin, English gerunds act grammatically as nouns, which means that they are modified by adjectives, often possessives: I was annoyed by his being late all the time. If I remember correctly, gerunds are pretty much always singular in Latin, but they can be plural in English: “There are many good livings to be had from trade.” Sometimes, things that look a lot like gerunds just stick around long enough and travel far enough that they end up being more or less ordinary nouns, as in human being or boxing. 

Gerunds look like participles but are different in that gerunds are nouns while participles are used in verbs. Participle: I have been thinking about you. Gerund: Thinking about you makes me happy. Participles also are used in adjectives: “Bring on the Dancing Horses.” 

Elsewhere

You can buy my most recent book, Big White Ghetto, here. 

You can buy my other books here. 

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You can check out “How the World Works,” a series of interviews on work I’m doing for the Competitive Enterprise Institute, here. 

In Closing

In 1970, William F. Buckley Jr. gave an interview to Playboy magazine, for which he wrote from time to time. (I wrote for Playboy once upon a time; the magazine later purged my work from its archive as too controversial, which I think is pretty funny.) You’ll have heard that Buckley laughingly explained that he wrote for the magazine, whose “Playboy philosophy” he criticized, on the grounds that he wanted to write something he could be sure his son would see. In the interview, Buckley insisted that some truths really are eternal, and that this will stand the test of time. But isn’t it the nature of dogmas to fall apart? “Most, but not all,” he said. And he was confident in some of his own. “How can you be so sure?” the interviewer asked. “I know that my Redeemer liveth,” Buckley answered. The biblically literate among you (an increasingly small elite!) know that is from the Book of Job, which is not the happiest book in the Bible. But our task—our job—is a lot like Job’s: to endure, to wait out hard temporary things in the knowledge that there are permanent things, some of them hard, some of them sublime. 

Not long ago, I was in a conversation (one that didn’t end well) in which the other party asked about some little professional disappointment I’d once had, and I told him, truthfully, that it didn’t bother me that much. “You’re very strong,” he said. But that isn’t it. As I have told my friends from time to time, I have a skewed perspective on the world because nothing really bad has ever happened to me. I’ve had a few rough spots, of course, and I know how to take a punch. But when I think about some of the perfectly ordinary things people close to me have endured—losing a young wife to cancer with a small child at home, having a beloved 16-year-old daughter killed by a drunk driver, having a loved one shoot himself in the bathroom, just on the other side of the door—I know: Nothing really bad has ever happened to me. Not like that. 

I have a lot more to lose than I did a few years ago, including four precious little boys, the oldest of whom just went on his first Easter Egg hunt over the weekend. A very nice gentleman at the church related to the gathered children the story of Jesus’s death and revivification, which must have gone entirely over my little man’s head, inasmuch as I think (and I certainly hope) that he does not know what death is and, hence, what resurrection might mean. But he did gather up some eggs and enjoy the candy. My sons are all named after Old Testament figures, none of whom—the Old Testament being the Old Testament—had an entirely happy life, all of whom endured disappointment and suffering that, in some cases, were not relieved before the end. 

When Jesus came into the coasts of Caesarea Philippi, he asked his disciples, saying, Whom do men say that I, the Son of man, am?

And they said, Some say that thou art John the Baptist: some, Elias; and others, Jeremias, or one of the prophets.

He saith unto them, But whom say ye that I am?

And Simon Peter answered and said, Thou art the Christ, the Son of the living God.

And Jesus answered and said unto him, Blessed art thou, Simon Barjona: for flesh and blood hath not revealed it unto thee, but my Father which is in heaven.

And I say also unto thee, That thou art Peter, and upon this rock I will build my church; and the gates of hell shall not prevail against it.

In the end, though, it is precisely “flesh and blood” that “hath revealed it unto” us. Stoicism may get you through some hard times, and Deism will help you avoid a lot of arguments, but without the flesh and blood—without the Resurrection—all is lost. Without the Resurrection, Nietzsche has the better case, because Christian ethics and morality are, shorn of the Resurrection, something worse than a farce—something very close to the insult to human nature Nietzsche and his imitators believed them to be, and maybe even something worse. 

When Paul told the Philippians to “work out your own salvation with fear and trembling,” he knew what he was writing. I might have read that passage 200 times before I appreciated how much fear and trembling there is in the thing, how deep into the fear love will, in love’s merciless way, lead us. 

I hear people say; “I never knew what love was until I had children,” which is sentimental claptrap and also maybe something you shouldn’t say in front of your wife or husband or parents or friends. 

But fear? 

I will show you something different from either

Your shadow at morning striding behind you

Or your shadow at evening rising to meet you;

I will show you fear in a handful of dust.

Flesh and blood, dust to dust. Immortal diamond. You can’t think your way out of the conundrum. You can’t fight your way out of it. You can’t vote your way out of it or spend your way out of it or read your way out of it. You cannot hold the ones you love close enough to change the facts of the case, only one of which matters in the final account. 

I know that my Redeemer liveth.