Former President Trump hit back at The Wall Street Journal editorial board over its warning about massive new tariffs he has floated if elected.
The 45th president proposed a “universal baseline tariff,” which would apply to nearly every import to the United States.
“I think we should have a ring around the collar” of the U.S. economy, Trump told Fox Business recently. “When companies come in and they dump their products in the United States, they should pay, automatically, let’s say a 10 percent tax...I do like the 10 percent for everybody.”
The WSJ editorial board cautioned that this threat should be taken seriously, since the former president followed through on what he said about tariffs in 2016 while campaigning.
In a piece titled “Trump Courts a Global Trade War,” the WSJ editorial board expressed its criticism of the idea and said it would be U.S. consumers who pay the price.
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Protectionists pitch tariffs as a tax on other countries, but American consumers pay the price—a total of $80 billion during Mr. Trump’s term, according to a Tax Foundation analysis. This cost the U.S. 166,000 full-time-equivalent jobs, the Tax Foundation says, and the Trump trade tax wiped out roughly 12% of the economic benefit of the 2017 Tax Cuts and Jobs Act. (WSJ)
In his response, Trump dismissed the impact on American consumers and said the board was repeating “debunked talking points from corporate-funded studies...”
“Even after being proven spectacularly and totally wrong in all their past predictions regarding my historically successful trade policies, the die-hard globalists at the editorial board still have not learned their lesson,” Trump wrote in his letter to the editor.
Price increases for consumers were virtually nonexistent and there was effectively no inflation when I was president. The trade deficit with China was down year-over-year for five straight quarters before Covid hit in 2020.
Under Joe Biden, our trade deficits, also known as losses, have hit record highs. Since 2000 the U.S. has racked up $17 trillion in cumulative trade deficits with the world. Only a fool or a fanatic would dismiss these facts as irrelevant.
These gigantic sums of exported wealth are being used to build up our enemies’ military strength and transfer permanent ownership of American companies, intellectual property, real estate, and other assets to foreign nations. Foreigners now own $16.75 trillion more of our economy than we own of theirs. Our country is being plundered.
The best way to stop this hemorrhaging of America’s lifeblood is a simple but powerful tariff on most foreign products, like the kind that was the primary source of government revenue through most of American history, and which built this country into the manufacturing powerhouse of the world.
As I demonstrated repeatedly, the tariff is also an important tool of U.S. national security and diplomacy. I am proud to be the only candidate for president who believes in true economic nationalism. (WSJ)
Contrary to what Trump argued about the trade deficit, the WSJ editorial board claimed this isn't a "useful measure of economic performance."
"In his first year in office, the U.S. imported $517 billion more than it exported in goods and services, according to data from the Census Bureau. That increased to $653 billion in 2020, and this relationship holds after adjusting for inflation," the board said.
The WSJ editorial board wasn't the only one to warn about Trump's proposal.
Economists of both parties said Trump’s tariff proposal is extremely dangerous. Adam Posen, president of the Peterson Institute for International Economics, a Washington think tank, called the idea “lunacy” and “horrifying” and said it would lead the other major economies around the world to conclude the United States cannot be trusted as a trading partner. Although aimed at bolstering domestic production, a 10 percent tariff would hurt the thousands of U.S. firms that depend on imports, while also crippling the thousands of U.S. firms that depend on foreign exports, Posen said.
The United States today imposes an average tariff on imports of just above 3 percent, according to Posen. That number is higher for some countries, with goods coming from China facing an average import duty of 19 percent. “You would be depriving American families of an enormous amount of choice, making their lives much more expensive, and putting millions of people out of work,” Posen said. [...]
Even former Trump economic officials were sharply critical of the idea. “A tariff of that scope and size would impose a massive tax on the folks who it intends to help,” said Paul Winfree, an economist who served as Trump’s deputy director of the Domestic Policy Council and is now president of the Economic Policy Innovation Center, a center-right think tank. “It would get passed along through higher prices at a time when the Federal Reserve has had difficulty limiting inflation.” (WaPo)
Former President Donald Trump’s proposed 10 percent tariff would raise taxes on American consumers by more than $300 billion a year—a tax increase rivaling the ones proposed by President Biden.
— Tax Foundation (@TaxFoundation) August 28, 2023
See our latest analysis: https://t.co/V6M8uNgcN6 @ericadyork #tariffs #trade pic.twitter.com/dzZNsYynCN
Jason Miller, a spokesman for Trump, pushed back on the criticism, however.
“The globalists who push false claims of economic disaster have been proven wrong time and again,” Miller told the Post. “No amount of fearmongering from special interests and establishment hacks in Washington will stop him from defending American workers and fighting to return millions of manufacturing jobs to the USA.”
