International Trade is Counterintuitive and Trump Won't Study It

There was a headline article in the heugh Iowa paper today about the damage done by Trump's tariffs. Unfortunately, it was mostly about small businesses who import products and not about low farm prices and high farm costs which are even more important. Trump, as readers know, carried states like Iowa, North Dakota and South Dakota 60-40. Trump voters in these states need to heed the advice of the late columnist Ann Landers, "Wake up and smell the coffee." 

There has been a pattern in U.S. trade policy Since trade policy is largely under the control of U.S. Presidents, it is important they understand the basics. The basics are that countries have unique weather, soil and people that make it advantageous to produce some things and import others. This is counterintuitive because our instinct is to believe it is better if we product stuff ourselves instead of pay others. Republican Presidents come from an ideology that markets generally make better decisions than governments and trade is about markets. Thus, Republican Presidents have advanced low tariffs and trade. 

Democrats have been closer to U.S. workers and unions. Unions have a history of protectionism and usually opposed trade and supported tariffs. Many Democratic Presidents have come into office thinking like unions. But after learning that all nations, including the U.S., benefit from producing some goods and importing others, all Democratic Presidents, (perhaps excluding Biden) have been in favor of low tariffs and more international trade. An issue lying underneath the prosperity of voters is that a strong economy better supports national defense. The only President who could not master the counterintuitive nature of international trade economics has been President Trump. It has taken a while for his branch of the media to lecture him, but it is finally showing up. The link, from the Wall Street Journal, explains that Trump's tariffs have not helped the trade deficit but this doesn't matter because the trade deficit is meaningless. Trump thinks it is something important but does not understand his tariffs make it worse instead of better.

 The trade situation is digging a hole the U.S. will have trouble digging itself out of. This is an avoidable problem caused by a lazy President and not corrected by a lazy Republican Housen and Senate. That both would be lazy at the same time is astounding.