The misleading ‘critic’ on Trump`s tariffs - Ylli Përmeti

Trump`s tariffs received furious ‘critics’ from neoliberals. The chief commentator of FT on economics, Martin Wolf, for example, represents a newspaper that supports neoliberal globalization. Besides, he does not use the right principles in his critic.  The same might be argued for other “economists” mentioned by the same newspaper when Trump presented his final plan on tariffs.  Some called he`s plan “deeply flawed” or “a figleaf” or “highly mechanical” or “insane” or a “recipe for hammering poorer countries with large trade deficit with the US” or “chaotic”, or “shocking ignorance” or “hurting US consumers”, because tariffs will be payed by them. But they mention only he`s aim to balance US`s trade deficit. Even economics professor Jeffrey Sachs sees Trump`s tariffs from the same perspective. 

But the president aims also to bring back US`s corporations, by incentivizing them with deregulation and lowering US`s corporate tax only for companies that produce in the US. An additional effort is he`s invitation to foreigners to invest in the US (through a ‘gold card’, replacing the EB-5 immigrant investor visa program, which allows individuals to reside in the US in return for job-creating investments of at least $1m or $800,000 in distressed parts of the country) and in the process to develop an economic system strong enough to resist future challenges particularly from China`s economic advantages and balance US`s government budget.

He aims, in other words, to achieve four (not one) aims at once: a strong economic system, greater economic independence, a trade balance and a balanced budget. Even the argument that those tariffs are going to hurt US`s citizens, is not entirely correct, because, indeed those products are being imported by American companies, which will pay the additional levy, and which usually pass those costs on to US`s citizens. But by doing so, foreign companies are also harmed, because their products become more expensive. They might, of course, cut their prices to offset the impact of tariffs. In such case, US`s citizens might profit from lower prices. But since Trump aims to protect the existing manufacturers and develop others, US`s companies might find some of those products in the domestic market while waiting for others to be developed.