Donald Trump has earned himself widespread, global opprobrium for his multifront trade war, with nearly every enemy and ally lambasting the president for waging a reckless trade war with no clearly articulated objective. The domestic reaction to new tariffs has been more mixed, however, as the president has displayed his uncanny knack for convincing his besieged base to support his quixotic war on the global trade order.
So far, stock markets have taken new trade barriers in stride, recognizing that what has been enacted so far affects only a small share of the U.S. economy. But with the Commerce Department holding a day-long hearing Thursday into the prospect of levying 25% tariffs on imported cars on Thursday, that may be about to end. The proposed tariffs would be the most disruptive by far, affecting more than $300 billion in annual imports in an integrated, global supply chain that directly or indirectly employs 7 million Americans. Consumers would feel the pinch too, with the average price of an imported car rising $6,000 and the price of a U.S.-built car $2,000, according to the Alliance of Automobile Manufacturers.
That just one of 45 witnesses in Thursday’s hearing will speak in favor of the tariffs suggests just what a stupid idea they are. For better or worse, the global auto industry has spent the past thirty years organizing itself under the principle of free trade and new automation technology. The U.S. automotive industry is so wedded to tariff-free trade between Mexico, the United States and Canada that a car traverses the borders of these countries as many as eight times in the course of manufacturing the final product. Foreign automakers are too, employing tens of thousands of Americans to produce cars sold in the U.S. and abroad, a strategy that is already being upended by China’s decision to slap a 40% tax on auto products sold via the United States.
At this point, a betting man would have to wager that Trump does go ahead with these tariffs, even as typically hawkish branches of his administration, like the office of the USTR, reportedly advise against it. The president clearly sees his trade war as a political winner, a battle that only he has the political courage to wage, and there’s at least some evidence to support this instinct.
Among the 15 states most directly affected by recent trade actions, the president’s approval rating is 57%, according to a recent Washington Post-Schar School poll. Meanwhile, the president retains historically high approval rating from the GOP, with 90% of self-identified Republicans indicating their support of the President.
The president has watched as the media, Democrats in Washington, and even some in his own party have predicted that he would be hurt politically as a result of his radical policy positions. But the President has remained relatively unscathed by his decision to buck the establishment by pulling out of the Paris climate accord, the Iran nuclear deal, and imposing a series of new tariffs. Even the economy and the stock market are holding steady, powered by debt-financed tax cuts and the natural momentum of a still-growing economy.
For those of us insulated from the immediate effects of Trump’s trade war, we should welcome Trump’s kamikaze mission on the global trade order as a clarifying natural experiment. Either he will turn out to be right, that the march of globalization can be reversed, that manufacturing jobs can be brought back to the United States without being automated, and that the manufacturing sector can be protected as a source of well-paying, middle class jobs for another generation or more. What’s more likely however, is that this whole affair will expose tariffs as a tool wholly unfit for the job of reversing the erosion of the middle class, and Trumpism as an ideology with nothing coherent to offer anyone who is not primarily motivated by a suspicion of foreigners nonwhite Americans.
Christopher Matthews is a writer who splits his time between New York City and Accra, Ghana, with an interest in the intersection of markets, the economy, and public policy. He previously held staff positions at Axios, Fortune Magazine, and Time Magazine, and has been published in Forbes and Debtwire.