As a Twitter pal said, at least we saved ZTE.
The findings from the White House Council of Economic Advisers have been circulated only internally and not publicly released, as is often the case with the council’s work, making the exact economic projections unknown. But the determination comes as top White House officials continue to insist publicly that Mr. Trump’s trade approach will be “massively good for the U.S. economy.”
The chairman of the Council of Economic Advisers, Kevin Hassett, an economist who came to the administration from the American Enterprise Institute, a conservative think tank, dodged questions at a White House briefing on Tuesday about whether tariffs would hurt an economy that has accelerated during Mr. Trump’s tenure.
Asked whether the administration’s economists had modeled the impact that a trade war with China would have on the United States economy, Mr. Hassett said Mr. Trump was a great negotiator who would persuade other countries to open their markets to American products.
Are Trump and his protectionist advisors even claiming that tariffs will be good for growth, though? Whenever I catch Wilbur Ross on TV, he’s making the case that the tariffs won’t hurt much. A few basis points off of GDP, nothing to worry about, certainly well worth it to the cause of projecting “strength” on trade and rewarding industries like steel that the administration favors at the expense of taxpayers. (Goldman Sachs projected GDP would shrink by 0.15 points in its own study this month, the Times notes.) The spin, echoed by Hassett, has been that the tariffs are a leverage play designed to convince rivals and, ah, close allies to lower already existing barriers to U.S. goods. If it works and they cave, the tariffs will lift and America’s economy will soar even higher. If it doesn’t work and we end up in a global trade war with the EU, Canada, and Mexico, well…
I know a guy who’s pretty excited to see the U.S. picking a fight with Europe over trade. Expect to see “Trump ordered tariffs at Putin’s behest” added soon to the #Resistance fever-swamp theory of Russiagate:
European leaders long ignored his warnings about the dangers of a world dominated by the United States, Putin said Thursday during his nationally broadcast annual call-in show. With Trump’s new metals tariffs, Putin said, Europeans are now finally getting their comeuppance for showing excessive deference to Washington — and getting a taste of the way the United States had long treated Russia.
“In essence, these are sanctions,” Putin said of the tariffs. “What, did they ‘annex Crimea,’ as many of our partners say?”
Putin went on: “Our partners probably thought that these counterproductive policies would never affect them. . . . No one wanted to listen, and no one wanted to do anything to stop these tendencies. Here we are.”
“They got what they deserved,” said one of the show’s hosts. I suppose we all have. Putin’s right too that the tariffs are essentially a form of sanctions. And they go both ways.
Unless, that is, the congressional GOP nukes Trump’s tariff power by passing Bob Corker’s new bill. Some Republicans are gung ho to do it. If you follow the president’s Twitter feed, you can guess some of the names:
The problem is that the two Republicans who count the most, Mitch McConnell and Paul Ryan, both oppose the idea. Ryan said yesterday at his weekly presser that it’s pointless to pass anything since Trump will only veto it, which is true — unless they get a veto-proof majority or attach it to a must-pass bill like the defense authorization, which is what Corker wants to do. (Tariffs are important enough to Trump that he’d probably even veto the defense bill because of it.) McConnell gave the same excuse, that Trump wouldn’t sign it, but noted that “I don’t think we need to be trying to rein in the president through legislation.” McConnell doesn’t want to do anything to alienate Trump at this point, having reached a meeting of the minds with him about supporting establishment candidates in Senate primaries. And he doesn’t want a divisive intraparty war so soon before the midterms for fear that it might suppress turnout, especially if Trump goes full loose cannon and starts attacking the Republican Congress as “globalists” who hate the working man.
So McConnell and Ryan are playing it cool for now. Probably they suspect that this problem will work itself out on its own. If the economy slows down or if Larry Kudlow makes some headway in the West Wing, Trump might rethink the tariffs. And if the standoff with trade partners wears on, he’ll probably fold. If worse comes to worst and he digs in on tariffs even as the economy starts to go south, they can always revisit Corker’s bill then. They’ll have more leeway to legislate the next two years since Trump will be more reluctant to attack them, knowing that he’s on the ballot in 2020 too and their fates are to some extent joined. They’re going to bide their time.
Here’s Jeff “The Flake” Flake laying into him on the Senate floor today over the tariffs.