Tyranny of Trump's tariffs

Before the November 2024 presidential election, we offered this cynical (but true) assessment: After the votes are counted, all we really do when we replace a Democrat with a Republican in the White House, or vice versa, is trade one autocrat for another. One president’s and political party’s versions of interfering in our lives and taking away liberty versus the other president’s and party’s versions.

They both stink.

Nevertheless, when the choice was Trump versus Harris, we sided with closing the borders; banning men from girls’ sports; no electric-car mandates; less regulation; lower taxation; no DEI military; and emptying the federal swamp.

Few paid much attention to Donald Trump’s tariff talk. Eyes glaze over quickly when candidates start talking about “balance of payment deficits,” and “reserve currency exchange rates.”

But Trump buttressed his support when he talked about those things in terms that resonate with the average American: “China has been ripping us off for decades. No more!” … “We’re going put America first and bring back all those beautiful manufacturing jobs.” … “No more unfair trade.”

Oo-rah!

But in a repeat of the Obama and Biden elections — of the feckless national media not investigating Obama’s anti-American beliefs; or Biden’s open-border plans — the press did nothing to goad Trump into explaining how his tariff plans were going to affect our lives. All we heard were the standard Trump promises — more manufacturing jobs for us than ever before, than in the history of the world.

So now we are getting what we got the first time around — Trump’s chaos.

Liberation Day? Ha. No one is feeling liberated. Quite the opposite.

The stories of business disruption and chaos have become a tsunami of adverse consequences. Here are a few examples from local conversations in the past few days:

• Mark Rutledge, CEO of Sarasota-based World Precision Instruments, maker of sophisticated instruments that analyze human cells in the development of pharmaceuticals, told us WPI is shifting supply-chain strategies to minimize the cost impact of the tariffs. 

His company has parts manufactured in Germany and China and distribution offices in a dozen countries. “We’re not only redirecting supply routes, we’re also looking at dual sourcing in countries other than China,” Rutledge told us. No doubt about it, he believes, WPI’s sales will decline.

• Despite Trump’s recent cherry-picking for automakers, a Longboat Key resident who has been a manufacturing engineer and executive for multiple companies in the automotive industry told us if Trump sticks with his mayhem, some automotive suppliers can easily fall into bankruptcy. 

Consider: If automakers require suppliers — many of which import parts from Asia — to live with pre-tariff contractual pricing and not pass along the cost of the tariffs to the manufacturers, those higher costs will wipe out the suppliers’ already thin profit margins.

And if that occurs, parts availability will contract. Manufacturers in turn will be forced to curtail production, reducing the supply of new cars and, inevitably, result in raising the sale prices of all cars and loss of jobs throughout the chain — contrary to what Trump has promised.

• A personal story: Daughter Kate runs a 450-student ballet school in Colorado Springs, which includes a retail store that supplies students with ballet shoes and dancewear. For 2025, the plan was to open a second store. 

Last week, suppliers notified her of growing disruptions to manufacturing and shipments. We put plans for the new store on hold.

Stories like this are everywhere. Everyone is adversely affected. 

And yet, from what we’ve gleaned, there seems to be only seven people who think Trump’s reciprocal tariff plans make sense: Trump, Vice President J.D. Vance, Treasury Secretary Scott Bessent, Commerce Secretary Howard Lutnick, Trade adviser Peter Navarro, Press Secretary Karoline Leavitt and Steve Miran, chair of the Council of Economic Advisers.

But now put those seven names next to 25 of the nation’s most noted conservative and libertarian economists and 1,700 more economics professors, fellows, scholars, policy experts and business leaders, all of whom came out April 18 against Trump’s tariffs. All of those noted economic experts authored and signed “The Anti-Tariff Declaration: Reaffirming America’s Prosperity and A Call to Reject Harmful Tariff Policies (Go to: anti-tariff.org/#declaration).

“For 250 years,” the declaration says, “the United States of America has demonstrated to the world that a people left free to innovate and produce for themselves, and for all who trade with them, will enjoy increasing abundance, higher standards of living, and greater security both economically and militarily.”

In one of the bullet points, the declaration says: “The administration’s protectionist policies repeat the catastrophic errors of the Smoot-Hawley Tariff of 1930, which was opposed by 1,028 economists. These scholars understood that protectionist tariffs would provoke a retaliatory trade war, thereby exacerbating the very same Great Depression that it was intended to solve. Rates resembling Smoot-Hawley are being imposed upon a significantly more integrated global economy, risking a similarly devastating outcome for ordinary Americans.”

One of the 25 co-authors of the declaration is Florida State University’s eminent economist, Randall G. Holcombe. We asked Professor Holcombe to explain for our readers the concept and effects of “balance of payments deficits.” 

Contrary to the president’s pronouncements of how horrible they are, Holcombe shows how trade deficits actually benefit Americans (see “In truth, our trade deficits benefit Americans”).

Ever since Adam Smith penned “The Wealth of Nations” in 1776 — 250 years ago — economists the world over have never wavered over their support for free trade and the harm tariffs inflict on the masses.

But Donald Trump and his advisers apparently know better. Such hubris.

To be sure, there is much in the federal government that needs disruption and elimination. But the question on so many minds is this: Did Trump and his advisers not do what we all do when we’re about to make a big decision? We ask ourselves: What are the likely consequences of the decision?

Paraphrasing economist/philosopher Thomas Sowell: Worldwide trade wars have a devastating history. “All that happens is you get a great reduction in international trade.” What’s more, he notes, if Trump is constantly changing the rules, uncertainty will reign. “That is a formula for having people hang on to their money until they figure out what you’re going to do,” Sowell says. “And when a lot of people hang onto their money, you can get results such as you got during the Great Depression of the 1930s.”

Trump can’t help himself. But by this time in his long business career, he and his advisers should know this tried-and-true business maxim: Spend a little, learn a lot. Try a little, learn a lot. If it works, do more. If it doesn’t, stop.

And there is this one: When you make a mistake, admit it and fix it.

President Trump: On this, we’re not winning and won’t.