There is something wrong about Trump's tariffs, and it's not just the numbers being all over the place. There is something else, something that runs much deeper and that underpins every mistake by this administration: Trump is trying to explain very complex concepts in the easiest possible terms, oversimplifying reality to please his base.
If you watched live, your jaw too must have dropped when Trump welcomed an auto worker to the stage -- someone, we're told by Trump, who "understands this business a lot better than the economists". While I don't doubt he might be better than whatever "economists" the Trump administration hired to set the tariffs, it is hard not to see the point Trump is making here: economics is simple, the "elites" are stupid, and I am here to explain to everyone how easy it is to get economics right.
Except the global supply chains, trade deals, currency exchanges and goods flows are much harder than Trump can even hope to understand. The tariffs have been announced almost 24 hours ago and the markets are still trying to price the consequences -- hundreds of thousands of people across the globe are racing to shift their investments to cut losses and make profits out of companies that might either not be affected or even gain from this. The markets are, I am afraid, very difficult to understand.
Oversimplifying reality allows Trump to reduce the complexity of economics to something that even his supporters can understand: a table with names and percentages. Simple, right? EU, 20%. UK, 10%. Forget how these numbers were dreamt up: just take these numbers as true, we did the difficult maths for you, and all you have to know is that we're making things fair for Americans. Hurray! The manufacturing jobs of the UK will come rushing back to the mighty suburban America the second companies see that they can set up production in a country that is soon to be hit with retaliatory tariffs from just about anyone. I am, for the die-hard Trump supporters reading me, being sarcastic.
Look, let's forget for a second that these numbers make absolutely no sense. And let's assume that, in an oversimplified version of this world that works like one in Trump's fervid imagination, putting up tariffs brings production back into your country. Now: what jobs exactly is Trump hoping to "bring back" from nations that have suffered the same deindustrialisation as America? Jobs have been fleeing the West for decades now, and companies have been setting up production in Asia for multiple reasons, cheap labour being one of the factors. The UK, Canada, and most of the EU have all been hurt by this exodus.
I could understand, and to some extent support, tariffs on countries that are producing goods with lower standards on the environment, on labour, or countries that are too close to holding a monopoly on certain industries, or that are too cheap and threaten to dump their products in the US. But if we're honest, environmental and quality standards in the US are lower than in the EU in many regards (think of food), and Trump is lumping together all countries in his mad race to be perceived as the saviour of American manufacturing. However, by putting tariffs on close allies such as Canada, Australia and the UK, the US is only creating more enemies than it can cope with.
All hope is not lost yet, at least for the UK. Our labour government will never admit this, but by making full use of our Brexit-earnt freedom we are inching closer to a trade deal with the US. Of course, anything can change at any moment and the government is right to put retaliatory tariffs on the table, but at this point I am convinced that they are more of a way to add pressure on the Trump administration to get a deal quickly rather than a real threat. An escalation is nobody's interest.
