Tales from the Trade War

Not good, not easy to win.

Doug Mataconis has already noted that despite Trump’s trade war, the trade deficit with China hit a record hit recently.

Another number I would add to that towering achievement:  115 Percent of Trump’s China Tariff Revenue Goes to Paying Off Angry Farmers.  Those figures comes from a Council on Foreign Relations report from December:

fiscal effects of us china trade war

It is utterly amazing to me to suggest that it is appropriate to create a tax on imports and then have to use the proceeds of that tax to subsidize industries being harmed due to the original tax.  It is Dumb Policy Hall of Fame worthy.

Dare I say that I am tired of the winning?

(Sometimes one resorts to snark to avoid weeping).

What is especially galling about all of this is that Trump keeps talking about these tariffs as if the Chinese are paying them (spoiler alert: they aren’t).  Here is is from his recent CPAC marathon speech:

Right now, China is paying 25 percent tariff on $50 billion worth of technology goods.

Except no, they aren’t.  Tariffs are taxes on imports.  The importer (in America) pays the tax and almost certainly pass the cost onto consumers (here’s an explainer).  A reason that tariffs are a tool of protectionism is because those taxes increase the price of imports and can therefore make domestic products cheaper by comparison.  Trump’s goal (whether he understands it or not) is to make American avoid paying more for foreign goods, hence leading to less imports of those goods, and an eventual reduction of the trade deficit. Of course, it really isn’t that simple, especially is a radically globalized marketplace–even if China starts selling us less (which, as noted, has not happened), other countries, like Viet Nam, can step into the breach. The idea that this is going to lead to substantial changes in US manufacturing is simplistic and absurd.

Not to mention, via the NYT:  U.S. and China Near Currency Deal, but Provisions May Not Be New (and ForbesA Trade Deal Will Not Make A Dent In Trump’s Trade Deficit).

Back to the snark: art of the deal, indeed.

To put it all a more serious way:  Trump has created economic disruptions (see the bar graph above for a clear example) for what?  His premises are flawed and the outcomes sub-optimal, to be kind.

Pursuant to conversations had in a different thread on a wholly different topic, I would submit that Trump’s policies here have empirically been shown to be flawed.  So to supporters I ask why support this nonsense?  Or, what am I missing?

One thing is for sure:  China is paying for those tariffs just like Mexico is paying for the wall.

FILED UNDER: International Trade, Science & Technology, US Politics, , , , , , , , ,
Steven L. Taylor
About Steven L. Taylor
Steven L. Taylor is a Professor of Political Science and a College of Arts and Sciences Dean. His main areas of expertise include parties, elections, and the institutional design of democracies. His most recent book is the co-authored A Different Democracy: American Government in a 31-Country Perspective. He earned his Ph.D. from the University of Texas and his BA from the University of California, Irvine. He has been blogging since 2003 (originally at the now defunct Poliblog). Follow Steven on Twitter


  1. Kathy says:

    What matters to Trump’s supporters is what he says.

    The clueless leading those who don’t want to be clued-in.

  2. CSK says:

    “So to supporters I ask why support this nonsense?”

    Because they support Trump the man (sic), not whatever passes for his policies. He owns the libtards, and that’s all that counts.

  3. Teve says:

    Can we get China or somebody to start producing insulin, so these drug companies stop raping poor and middle-class Americans?

  4. An Interested Party says:

    Yet another example that proves that the current occupant of the White House is an idiot…anyone who supports him is either stupid, naïve, has some internal nefarious reason (nefarious in that it is obvious how much he is hurting this country) for supporting him, or perhaps a combination of all three…Hillary Clinton must ask herself on a daily basis, “How did I lose an election to this dumbass?”

  5. grumpy realist says:

    @An Interested Party: Equivalent stupidity is going on over in the U.K. with Brexit and multiple people’s willingness for a no-deal drop-out.

    (As has been pointed out by the intelligent–“no deal Brexit” isn’t no deal. It’s simply a case of going over the side of the ship into the midst of the shark feeding frenzy, THEN trying to figure out whether you can swim away.)

  6. Franklin says:

    I had to check some polls on this, but it’s interesting. Democrats and Republicans are still in general agreement that trade is good. But certain demographics like uneducated white men and Midwest farmers believe tariffs are good for the U.S. (especially if they’re the ones getting paid off for “trade relief”, I suppose!).

    Hmm, and Trump won some critical states in 2018 …

    Whether it’s smart policy is completely besides the point.

  7. Kit says:

    So to supporters I ask why support this nonsense? Or, what am I missing?

    Try to imagine a world where all Trump’s promises were coming true. Personally, my world view would be collapsing, and I’d be face to face with having to reevaluate not only what I thought I knew, but my very way of knowing. I’d have to face up to the fact that I was part of the problem. To avoid that day of reckoning, I would invest all my efforts in justification and deflection. If any part of reason is demonstrably unreasonable, reason collapses, similarly to the infallible word of God as set down in the Bible. Trump’s supporters don’t need reason because they feel in their bones that he is right. No discussion on that score. But he must be proven right on everything, or the whole project collapses and his supporters are revealed to be nothing more than the rubes that the coastal elites have always assured them that they were. If these tariffs are nonsense, then Trump’s gut is simply full of shit and not some oracle. What consequences flow from that realization?

  8. Ben Wolf says:

    So to supporters I ask why support this nonsense?

    Because they intuit the problem is corporate labor arbitrage but don’t understand the causes. Nor have Democrats, academics and others of the technocratic caste done much (if anything) to suggest productive alternatives to Trump’s scheme. He presents them with a narrative and a solution. What are you presenting?

    *Also, the technocratic caste hasn’t covered itself with glory regarding trade. Labor opponents of NAFTA were much more accurate in forecasting its effects than Ivy League pedants.

  9. @Ben Wolf:

    What are you presenting?

    A question about the logic of charging tariffs, lying about who is paying, and then having to use the money to subsidize one segment of the economy harmed by the policy.

    It is pretty straightforward, really.

  10. Ben Wolf says:

    Where is your narrative? Where is your policy prescription? Where are your politics? All you’ve done is pose a question 9 kajillion other people asked long before you did, while you avoid discussion of alternatives. You bring nothing to the table.

  11. @Ben Wolf:

    You bring nothing to the table.

    You don’t have to read.

    You certainly don’t have to comment.

    I would take your critiques more seriously if they weren’t rude. You aren’t engaging, you are just doing drive-by insults–it makes you more pedantic. It is just trolling.

    What are you bringing to the table other than that?

  12. Ben Wolf says:

    @Steven L. Taylor:

    I would take your critiques more seriously if they weren’t rude. You aren’t engaging, you are just doing drive-by insults–it makes you more pedantic. It is just trolling.

    I’m not the one posting intellectually incurious pap.

    You’ve had a year to enhance your discussion of trade, and have done absolutely nothing but continue to ask the same vapid question, make an excuse for “snark” and then proclaim how those Trump troglodytes make you weep. That’s it. No discussion of how we got here other than a truncated narrative of “everything was normal in 2016.” No discussion of where to go from here, because apparently you can’t be bothered to read anything more than high-school level NYT op-eds. “Oh, those silly Trumpers, aren’t I so very logical for showing how silly they are.”

    And if you don’t like the criticism, ban me.

  13. @Ben Wolf:

    And if you don’t like the criticism

    It doesn’t really even qualify as criticism, to be honest.

  14. @Ben Wolf: I will actually step back and say that you do raise issues that are worthy of consideration, as well as underscoring the limitations of snark.

    Still, I will continue to note that I find your rude approach utterly off-putting and unnecessary, making what might be a useful interchange into trolling.

  15. Just nutha ignint cracker says:

    “Because they intuit the problem is corporate labor arbitrage but don’t understand the causes. ”

    I think someone is overestimating the intuitive capabilities of Trump supporters.

  16. wr says:

    @Ben Wolf: “You bring nothing to the table”

    Actually, he brings the table.

    What’s your contribution here?

  17. @wr: Perhaps I have could have set the table better. Still, one would like to think that a reader could see that the point was more about the empirically measurable fruitlessness of the policy in question rather than any attempt at macroeconomic policy analysis.

  18. Kit says:


    Actually, he brings the table.

    Damn! I wish I had said that!

  19. MarkedMan says:

    @Ben Wolf: I’m gonna call BS on this. In fact, you bring nothing to the table. I’ve followed your comments for a while and while they are angry and scornful of all others you rarely actually say anything meaningful yourself. The one thing concrete you more or less implied (rather than came out and said) in the above exchange is the the real problem with current day trade is “corporate labor arbitrage”. But this, without any further explanation, is just mumbo jumbo. All trade, to one degree or another is a form or arbitrage. It always has been and it always will be. And since all trade items involve, to a greater or lesser extent, labor, then all trade is labor arbitrage. Like a doctor hiding behind Latin names, you’ve merely restated the name of something in bigger words in order to make others think you know what you are talking about.

    If you’ve got an argument to make, then make it. If you’ve only got snark, keep it to yourself.

  20. @MarkedMan: As best I can tell he has some neo-marxist economic positions or, at the very least, is a critic of neoliberalism. I have tried to figure it out before by asking some questions, but he just does the rude routine.

  21. An Interested Party says:

    I have tried to figure it out before by asking some questions, but he just does the rude routine.

    Well, if he is a neo-Marxist, his bitterness makes perfect sense…