When James Bond visits Tokyo in You Only Live Twice, he’s taught there are no swear words in Japanese. He learns their worst word is Shimata, which simply means “I have made a mistake.”
We might be using this word next year, if the president’s tariffs prove to be a long-term economic strategy rather than a short-term tactic. However, as we can see this week from his Win Bigly approach to threatening tariffs, rather than actually deploying them, there’s every confidence that most of his tariffs actually won’t come to pass.
Nevertheless, the threat alone caused chaos in the global markets, enraging Democrats whose attitude toward trashing markets is a little different now than when they trashed them five years ago because of COVID.
But this volatility comes as a surprise to no one in the administration, indeed it is all part of the plan. The 90-day pause on all but Chinese tariffs are a sign of the president’s endgame – they are a long-overdue opening move to re-shape the world economy for the 21st century. (At least we hope they are.)
See the “free” part of free trade is a fallacy. Free trade is extremely expensive. For the last 80 years, American naval supremacy kept virtually every liter of ocean water safe for business. Before the post-World War II, America-imposed world order, there was still plenty of trade, but it was either within an empire’s own sphere of influence, dictated at the barrel of a mercantilist gun, or very dangerous.
Maritime commerce is so safe that even the Somali “I’m the captain now” pirate brags how the American Navy protects him in Captain Phillips.
And some bad people don’t like this order – even though they’ve benefited from it. Russia, China, and others have all but declared war on our Navy, but the only thing Democrats can complain about is Trump’s tariffs.
Even those who are happy to let us continue ruling the waves don’t contribute to it. Our Navy’s budget for 2025 is about $204 billion, and that all comes from the American taxpayer. (This is why the president says things like, “We cannot be taken advantage of any longer.”) Perhaps by design, his tariffs will increase federal tax revenues by about $206 billion, according to the Tax Foundation, which would cover the cost with a slight profit.
Maybe these tariffs would go down smoother if we renamed them the “Thank A US Sailor fee.”
However, that math could be a best-case scenario. Modern shipping has long since evolved beyond ships carrying Product A from Port X to Port Y where it picks up Product B and then heads home. International shipping picks up and delivers its cargo in a complicated alphabet soup of transactions. Ships are always in motion, transporting a variety of hyper-specific goods and components along unfathomably complicated supply chains.
Or as NBC succinctly put it last month, “There’s no such thing as a fully American-made car.”
But if these tariffs stick around too long, if they interrupt these supply chains too severely, then these chains could break. If one critical, Taiwanese component in a Japanese car can’t get to the factory in Indonesia – or wherever – then it doesn’t matter how much the tariff on “Japanese” car is. It could be disaster.
Sen. Rand Paul recently warned that the tariffs won’t just be bad for the economy, they will also hurt Republicans in the midterms. He cites how the McKinley tariffs of 1890 and the Smoot-Hawley tariff of 1929 both led to electoral slaughter for Republicans.
Again, this is the first move of the president’s long-term strategy. The goal is to put pressure on multinational corporations to move manufacturing out of Chinese sweatshops, which should delight everyone. But if this week’s kind of volatility continues, or worsens, voters might not forgive us next year. If we lose the House and God forbid the Senate next year, his long-term strategy won’t matter. If the markets aren’t thriving by November 2026, tariff talk will need to be rolled back.
If we want a new 21st century world order with achievable economic and security objectives, we can’t trust it to the new 21st century frothing-at-the-mouth Democrats. If Republicans lose Congress next year, the shimata is really going to hit the fan.