When it comes to tariffs, is President Donald Trump “crazy like a fox”?
While some people would cut off the last three words of that last phrase above, others—including some economics experts—believe the president might just get what he wants in the ongoing tariff battle.
Dr. Mark W. Hendrickson, an adjunct faculty member, economist, and fellow for economic and social policy with The Center for Vision & Values at Grove City College, wrote this week that the steel and aluminum tariffs the president imposed as of June 1 on “our closest neighbors and oldest allies to match those he had already imposed on China and other non-Western countries” did not seem to make much sense.
Dr. Hendrickson points out that Canada and Mexico were already running a steel trade deficit with the U.S. He also quoted the U.S. Chamber of Commerce projection “that a full-blown trade war could wipe out over 2.5 million U.S. jobs.”
But Dr. Hendrickson adds, “This is where Trump’s crazy, economically irrational, bite-off-your-nose-to-spite-your-face trade war comes into play. Our trading partners never thought an American president would be willing to risk the pain to Americans of a trade war. Well, Trump is willing. He is playing a high-stakes game of ‘chicken,’ calculating that the United States can withstand the economic pain of higher tariffs longer than our allies can, and that they will capitulate. Indeed, it may turn out that Trump is crazy like a fox.
“Consider: Trump cagily cut business taxes and regulations before initiating his trade war. That boosted the U.S. economy with strong tailwinds to counteract tariff-caused headwinds. Like when President Reagan outfoxed the Soviets in the 1980s, Trump knows that the American economy is stronger and healthier than that of our ‘adversaries,’ giving us an advantage in the contest.”
Dr. Hendrickson said negotiating lower tariffs would be “a historic achievement, both economically and politically.” That is far from a done deal, and there may be significant pain to get there. Only time will tell if the president is crazy like a fox.
—Mark Sherry