My (new) home state of Indiana is the top steel producing state in the country. It’s also the most manufacturing intensive state. We manufacture a lot of automobile and truck parts here, parts that rely on cheap steel and aluminum. So when assessing whether the new tariffs imposed by President Trump will be good or bad for the country, Indiana’s may be the bellwether state. We may see the impact first — for better or for worse.
Meanwhile, I’m still grinning from ear to ear at the ways the Republican Party has been transformed under Mr. Trump. Who would have thought that the Republicans would become the party of protectionism? Not me. Or anyone else if they’re being honest with themselves.
I’m also taking delight in Mr. Trump’s recent desire to take guns from people without due process of law. All I heard during his predecessor’s administration was the ludicrous fear mongering from the right claiming that Obama was “coming for their guns.” And now it turns out it’s the Republican president who wants to come for their guns. I have to admit taking some perverse delight in the way the worm has turned.
But back to trade. This could well be a train wreck in the making. Or not. Only time will tell. But it’s hard to imagine a good outcome should other countries retaliate, which one would assume is likely.
Of course, protectionist trade barriers are nothing new. Every state in the Union already has them. They’re called licensing requirements, etc. They inhibit commerce across state lines, ostensibly to protect consumers. But that’s often a ruse. Usually, it’s to protect incumbents from competition, thereby propping up the income and wealth of the incumbents (to the detriment of others, of course).
Countries have protective barriers, too. Including the U.S. Just ask any farmer in Brazil or sugar cane grower in any other country. Or foreign producers of any of the myriad of other products that already carry stiff tariffs.
So, despite the impression the press may be giving people, the world isn’t new to tariffs and protectionist policies. That doesn’t mean they’re good. They’re usually not. And it doesn’t mean we should add more. But it does mean it’s not the black and white issue that many are projecting it to be.