manufacturing | Tom Mullen Talks Freedom

President Trump announced Friday another pause on some tariffs on products imported from Canada and Mexico after a rocky week for equities markets trying to price in their effects. At the same, he says that tariffs could go higher than 25% in the future.

Trump’s stated reason for imposing the tariffs on the two USMCA partners is their failure to control illegal immigration and drug trafficking across their borders into the United States. Apparently, the president believes tariffs are the cure for just about anything, including illegal immigration.

But in a Q&A aboard Air Force One, Trump returned to the more traditional mercantilist arguments in favor of tariffs that he campaigned on. Asked if he is worried about a recession, Trump replied no, adding,

“All I know is this. We’re going to take in hundreds of billions of dollars in tariffs and we’re going to become so rich, you’re not going to know where to spend all that money, I’m telling you, you just watch. We’re going to have jobs, we’re going to have open factories, and it’s going to be great, and the plane is landing, and thank you for a lot of good questions. Thank you very much.”

There is a lot to unpack in that relatively short answer.

First, the president seems to believe taxing and spending are the keys to a strong economy. He tells the reporter “you’re not going to know where to spend all that money.” But it won’t be the reporter or anyone else in the private sector spending the money. It will be the government.

He also says the tariffs will collect “hundreds of billions of dollars.” As the president has also suggested tariffs could replace the income tax, it is worth noting that would require thousands of billions of dollars, not hundreds. Three thousand billion, to be exact, when counting the $500 billion in corporate taxes collected last year in addition to $2.5 trillion in personal income taxes.

But the last part of his answer carries the main foundation of Trump’s economic vision.

Candidate Trump promised tariffs would protect domestic manufacturers and their employees from cheaper foreign competition. Indeed, imposing tariffs similar to those imposed upon U.S. imports to its trading partners would cause manufacturing productions and jobs lost to China and other, lower labor cost countries would return to the United States. All this begs the question: What is the goal of the tariffs? Are they meant to collect revenue, perhaps enough to replace the income tax, or to protect domestic production? “Both!” Trump and his supporters would probably answer. It’s win-win. Americans will be so tired of winning some might be hospitalized for exhaustion. But tariffs can’t do both. It’s physically impossible.

Read the rest on Tom’s Substack…

Tom Mullen is the author of It’s the Fed, Stupid and Where Do Conservatives and Liberals Come From? And What Ever Happened to Life, Liberty, and the Pursuit of Happiness?

Is Donald Trump reading this blog? If so, he’s not grasping that Trump Isn’t Hitler; He’s Hamilton and Reality Check: Trump’s Platform is Identical to Lincoln’s weren’t meant to be supportive of his mercantilist economic ideas. Maybe that’s on me, the writer.

Regardless, Trump invoked both Hamilton and Lincoln, starting at about the 10:30 mark, during a speech yesterday. He quotes Lincoln saying, “The abandonment of the protective policy by the American government will produce want and ruin among our people.”

Like all protectionists, Trump seems to have no idea about the concept of opportunity cost. He posits that tariffs on foreign imports will bring back manufacturing jobs, which he says “the nation” desperately needs. But it never occurs to him that when millions of Americans buy sneakers made in China for $100 instead of sneakers made in America for $200.00, they create other jobs with the $100 they save.

Trump’s speech confirms several of the arguments I make in my latest book. One can draw a virtually straight line from the Federalists, through the Whigs, to the Republicans. Obviously, there are nuances over such a long period, but the core tenets of protectionism, crony capitalism and central banking never cease to be the foundation this house is built on.

More importantly, these are the core tenets of true conservatism in the British-American tradition, since before the dawn of the industrial revolution. You can call Trump a lot of things, but “not a real conservative” just doesn’t hold water. Free markets, individual liberty and limited government are classical liberal ideas that have only resided within the conservative movement recently and have never been very welcome. That’s because they are all anathema to the conservative worldview that any change, from within or without, threatens to break the barriers between society and man’s dark nature.

The creative destruction of the market, the free movement of labor, capital and goods, and Jefferson’s libertarian principle that the government should be limited to “restrain men from injuring one another, shall leave them otherwise free to regulate their own pursuits of industry and improvement” is the opposite of conservatism. That’s why Hamilton feared and loathed Jefferson; that’s why Trump fears and loathes the free market. He’s a true conservative, like Hamilton, Lincoln, Coolidge, Hoover and the rest.

Tom Mullen is the author of Where Do Conservatives and Liberals Come From? And What Ever Happened to Life, Liberty and the Pursuit of Happiness? Part One and A Return to Common Sense: Reawakening Liberty in the Inhabitants of America.