Journalists have always had a tendency to treat Donald Trump as a gold medalist in some kind of Olympics of Stupidity. But even for them, the trade war he has fitfully waged over the last two weeks has been dazzling in its illogic and arbitrariness. He has imposed tariffs, both on China and on his country’s nearest neighbors and closest allies. Then called them off. Then reimposed them.
Sowing ill will, repelling investors, decimating the 401(k) plans of those who once thought it was a good idea to vote for him, Trump appears to most newspapers readers as a mad king, or as the crazed naval captain Humphrey Bogart plays in The Caine Mutiny—someone from whom control ought to be wrested, and soon.
Yet there is powerful evidence behind certain Trump arguments. European and Chinese ambitions really do have something to do with abuses of the U.S.-Mexico-Canada Agreement on free trade. The United States now imports half a trillion dollars in goods from Mexico every year—more than we import from China. That is because, since Trump left office in 2021, China has increased its manufacturing presence along the U.S. border, in order to take advantage of favorable trade terms in the USMCA. So have European companies. So have American ones, including Elon Musk’s Tesla.
Trump is no less correct that the present architecture of the global economy is unsustainable. In peacetime, this country runs large, permanent trade deficits not just with China, Europe, and Mexico but with the entire world, and has accumulated $36 trillion in debt in the process. That’s $323,000 per taxpayer.