Max Boot: Sheer idiocy of Trump's China tariffs

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WASHINGTON — As President Donald Trump was announcing a new round of tariffs against China on Monday, my thoughts turned to Bob Woodward's book "Fear," which describes in excruciating detail how former economic adviser Gary Cohn tried, in vain, to educate the president about international economics 101.

Cohn, Woodward writes, "was convinced that trade deficits were irrelevant and could be a good thing, allowing Americans to buy cheaper goods." He patiently explained to the president that his "Norman Rockwell view of America" — wherein the United States became wealthy by making steel, cars and other industrial products - was no longer true: "80 plus percent of our GDP is in the service sector." People didn't want to work in factories anymore servicing "2,000-degree blast furnaces" when they could "sit in a nice office with air conditioning and a desk."

Cohn pointed out that the only time the trade deficit went down was in times of economic crisis, when Americans couldn't afford to buy imported goods. "If you want our trade deficit to go down, we can make that happen," Cohn exclaimed. "Let's just blow up the economy!"

FOG OF FOOLISHNESS

In one ear, out the other. Trump wasn't buying it, Woodward writes. When Cohn asked him why he was so convinced that trade deficits were bad, Trump said, "I just do. I've had these views for 30 years."

Little wonder that his own aides view Trump as an "idiot" and a "moron." He doesn't understand the first thing about international economics, and he isn't interested in learning. But he doesn't hesitate to make big, momentous decisions while blundering around in a fog of foolishness.

On Monday, Trump said, "China's now paying us billions of dollars in tariffs and hopefully we'll be able to work something out." Uh, no, that's not how it works. As Politico notes, "Importers of the products pay the tariffs and either eat the extra cost or pass it on to consumers." Put another way: Tariffs are taxes. Trump just increased taxes on American consumers, without realizing it. Not even two senior administration officials, on a call with reporters, could defend Trump's misconception. One of them said: "The tariffs work the way tariffs normally work."

Equally daft is Trump's claim that his steel tariffs, imposed earlier in the year, were already a raging success. He tweeted on Monday: "Our Steel Industry is the talk of the World. It has been given new life, and is thriving. Billions of Dollars is being spent on new plants all around the country!" Again, not quite. According to the government's own figures, employment in primary metals manufacturing has gone up by about 1,000 jobs since February. Meanwhile, the increase of 10 percent in steel prices is affecting steel-consuming industries - which employ 6.5 million Americans, compared with just 140,000 working in steel mills.

The carnage is just beginning. Trump is spending $12 billion to bail out farmers hit by retaliatory tariffs, but there is no relief for other industries. As Business Insider notes, Mid-Continent Nail, the largest U.S. nail manufacturer, has already laid off 130 workers. Element Electronics, a TV maker, plans to lay off 127 workers, and Brinly-Hardy, a maker of lawn-care equipment, laid off 75. According to one study, Trump's steel and aluminum tariffs alone could cost 400,000 jobs. The expanding list of tariffs will prove even more costly.

Those sorts of numbers would cause any president with an iota of critical intelligence to reexamine the course he is on. But that's not who we have in the Oval Office. We are governed by an invincible ignoramus who increasingly surrounds himself with advisers who are either ignorant, fanatical or opportunistic — and sometimes all three.

'NOBODY WILL NOTICE'

Commerce Secretary Wilbur Ross is one of Trump's chief trade advisers — even though Trump himself told Ross, according to Woodward, that "you're past your prime" and "you've lost it." Ross gave credence to those characterizations with his clueless defense of Trump's new tariffs on Tuesday: He told CNBC hosts, who were visibly dumbfounded, that American families won't be bothered by all the tariffs on consumer goods because they're "spread over thousands and thousands of products," so "nobody will actually notice" the price increases. Maybe a millionaire like Ross won't be bothered, but middle-income families will find it hard to ignore the higher prices for cars, washing machines, diapers, beer, soda, slow cookers and other products.

Then there is White House trade adviser Peter Navarro. In one Oval Office meeting reported by Woodward, Cohn said "99.9999 percent of the world's economists agreed with him" that trade deficits don't matter much and that tariffs are bad. Navarro is part of the .0001 percent who disagrees — and he has Trump's ear, because he is telling the needy, insecure president that "his intuition is always right."

So we are embarked on simultaneous trade wars with all of our major trade partners under the leadership of a commander in chief who literally does not know what he is doing. I am reminded of the words of Gen. David Petraeus during the invasion of Iraq: "Tell me how this ends." My guess: badly.

Max Boot, a Post columnist, is the Jeane J. Kirkpatrick senior fellow for national security studies at the Council on Foreign Relations and a global affairs analyst for CNN. He is the author of the forthcoming "The Corrosion of Conservatism: Why I Left the Right." The Washington Post.




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