Alright class, settle down, settle down! Today, in Government Basics 101, we’ll be discussing the concept and mechanics of tariffs. Come on, put away those tablets and cell phones, this shit is important.
El Pendejo Presidente has announced that he will be imposing tariffs on steel and aluminum imported into this country, 25% on steel and 10% on aluminum. His attempt to do this has more problems than Pfizer has pills. Let’s look briefly at the kinds of tariffs, and how they’re imposed, and you’ll quickly be able to see why Revlon doesn’t have enough lipstick to put on this particular pig.
In his announcement, President Trump has asserted that he will unilaterally impose these tariffs, for national security purposes. Basically, he is performing the equivalent of an Executive Order to impose them. Trump is claiming that our national security is at risk because our military requires a steady supply of steel and aluminum, and in a time of national crisis, a dependence on foreign steel and aluminum could cripple our self defense. There are three fundamental problems with this, let’s label them bullshit 1, bullshit 2, and bullshit 3 for the sake of simplicity.
Bullshit 1: Trump is claiming that reliance on foreign steel and aluminum could cripple our self defense in a crisis. First of all, the United States only imports 1/3 of those commodities every year. Second, the US military only uses 3% of the total domestic consumption of steel and aluminum every year. If Nazi Germany could collect the loose hairs on girls brushes to make felt for torpedo heads in WWII, I think we can find a way to recycle our barbecue foil in a national emergency.
Bullshit 2: Our adversaries could have us over the barrel in a conflict by cutting off our supplies. Ummm. Currently, the United States imports steel and aluminum from 110 different countries, most of them close allies. If our adversaries cut us off, I think close allies like Canada and Mexico could be counted on to pony up, especially since their own country’s would be threatened if we submitted to a foreign adversary.
Bullshit 3: This is a matter of national security. Fortunately for the world as well as ourselves, nobody is going to take Trump’s word on this. And currently, there is not one speck of evidence that our national security is at risk. The White House counsel’s office had already advised him that it would take at least three weeks to come up with an evaluation as to the risk involved by a projected interruption. And in fact, Trump’s tariff plan may be more detrimental to our national security. Defense and intelligence experts are saying that the tariffs may create a worse national security risk, by alienating close allies we depend on for all kinds of support and cooperation on national security issues.
OK, so Trump may not have a tariff leg to stand on where national security is concerned. And if he doesn’t, then he has another wholly different, and even larger problem. If these tariffs are not being levied for reasons of national security, then they are by necessity “protective” tariffs. What in the hell are protective tariffs? I’ll let Wikipedia educate you on this one;
Protective tariffs are tariffs that are enacted with the aim of protecting a domestic industry. Tariffs are also imposed in order to raise government revenue, or to reduce an undesirable activity (sin tax). Although a tariff can simultaneously protect domestic industry and earn government revenue, the goals of protection and revenue maximization suggest different tariff rates, entailing a tradeoff between the two aims
This explanation fits like a glove, since in his announcement, Trump spoke at length about protecting American jobs and industries. The critical word in that explanation is “enacted.” Executive Orders are not enacted, laws are enacted. The other two critical words in that explanation are “tax” and “revenue.” Only congress can create taxes and control revenue, by passing laws creating and regulating them. To put it bluntly, if Trump can’t prove national security, he can’t impose the tariffs, congress would have to pass a law to “enact” them. And the House of Representatives originates budgetary matters.
Why is this important? See my article yesterday, in which I chronicled the fact that in defiance of their Speaker, Paul Ryan, 107 GOP House members wrote a letter to Trump, taking issue with his decision to levy these tariffs. If Trump can’t autocratically levy these tariffs, he’s going to need the House and Senate to pass a bill that allows him to do it. And if those 107 GOP House members hold firm in their opposition, Trump would need the Hubbel telescope to see the finish line to get that House bill across. Basically, he’s screwed.
But knowing Trump, he’d go ahead and levy these tariffs anyway, knowing full well that they’d be immediately challenged in court as being unconstitutional. The first court to hold a hearing would immediately issue a temporary restraining order to keep it from going into effect pending resolution in court. And it will take months, if not years to resolve the lawsuit. And this result would be a true nightmare scenario, both in economic terms, as well as national security terms.
Because the rest of the world won’t give a fat rats ass about temporary restraining orders. As far as they’re concerned, the United States levied protective tariffs. In return they are going to issue punitive tariffs themselves in retaliation. Meaning that importing goods that we buy from other countries every day will become more expensive, due to their tariffs, and this country won’t even be getting the increased revenues from our tariffs, since they’re frozen pending the settlement of the lawsuits.Other countries get more money for the goods they ship to us, but pay no penalty themselves since our tariffs are on hold. Thank God we have Trump in the White House, instead of a dipshit President who would make stupid decisions regarding foreign trade!
So, that’s the 411 class. Trump has exploded a full blown civil war in the GOP over tariffs that he might not even be able to impose. And if he goes ahead and tries to impose them anyway, out of petulance, other countries, even friendly countries, will take us to the cleaners for our exports, while paying not one penny in penalty for their exports to us. Any questions?