The tariffs have backfired. Do his voters care?
I'm sure you'll be surprised to learn that Trump doesn't know anything about economics. Considering his history, it's clear that he's really only good at inheriting money, self-promotion and running con-games. He liked to present himself as a trade "expert" but his understanding of that is really just a puerile xenophobia in which wily foreigners are screwing America and all you have to do is be "strong" and "make them pay" and America will make the world bend to its will. It is a 6th grade understanding of how the world actually works.
Here's how well that's worked out for him:
President Donald Trump’s strategy to use import tariffs to protect and boost U.S. manufacturers backfired and led to job losses and higher prices, according to a Federal Reserve study released this week.
“We find that the 2018 tariffs are associated with relative reductions in manufacturing employment and relative increases in producer prices,” concluded Fed economists Aaron Flaaen and Justin Pierce, in an academic paper...
“While the longer-term effects of the tariffs may differ from those that we estimate here, the results indicate that the tariffs, thus far, have not led to increased activity in the U.S. manufacturing sector,” the study said.
Tit-for-tat trade retaliation is an idea best relegated to the past, given the presence of globally interconnected supply chains, the Fed researchers found.
The top ten manufacturing industries hit by foreign retaliatory tariffs were producers of: magnetic and optical media, leather goods, aluminum sheet, iron and steel, motor vehicles, household appliances, sawmills, audio and video equipment, pesticide, and computer equipment.
The top ten industries hit by higher prices were: aluminum sheet, steel product, boilers, forging, primary aluminum production, secondary aluminum smelting, architectural metals, transportation equipment, general purpose machinery and household appliances.
The researchers don’t measure the effects on business confidence resulting from the uncertainty regarding U.S. international trade policy. Many economists see this doubt about future government policy as a primary driver in the decline in business investment this year.
He and the Republicans have juiced the economy to the max with massive military spending and tax cuts in the middle of an expansion and it's worked well for them in the short term. I suspect that the Great Recession was so deep and affected people so profoundly that inflation has been kept in check because workers are still risk averse and employers know it.
I think Trump is oblivious to all that. He's just lucky and has been enabled by the shameless Republican party which is happy to give their rich patrons an enormous payday regardless of the consequences.
You would think the results of this trade war would show some erosion in his base. But there doesn't seem to be any. I guess all that "economic anxiety" doesn't really have anything to do with economics after all. Go figure.
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