Trump Doesn’t Really Want Free Trade (He Just Wants To Make It Look That Way)

The US wants tariffs on trucks, the EU wants tariffs on agriculture. Hypocrites all.

Trump claims to be a free trader who wants to eliminate tariffs altogether as well as industry subsidies and non-tariff trade barriers across countries. He proposes higher tariffs to eliminate them.

….Tariffs will make our country much richer than it is today. Only fools would disagree. We are using them to negotiate fair trade deals and, if countries are still unwilling to negotiate, they will pay us vast sums of money in the form of Tariffs. We win either way……

— Donald J. Trump (@realDonaldTrump) August 4, 2018

Tariffs are the greatest! Either a country which has treated the United States unfairly on Trade negotiates a fair deal, or it gets hit with Tariffs. It’s as simple as that – and everybody’s talking! Remember, we are the “piggy bank” that’s being robbed. All will be Great!

— Donald J. Trump (@realDonaldTrump) July 24, 2018

Making Sense of Trump’s No Tariff Call

Please consider Making Sense of President Trump’s Call for Zero Tariffs.

Is that no-tariff objective serious after all that Mr. Trump has said in favor of them?

Probably not. As recent talks with Europe help show, most nations have industries they are determined to protect—including the U.S.—which makes it hard even for the most ardent free traders to level the global trading field completely. It is one reason the global trade deals that do exist are so complex and often uneven, and why they are likely to stay that way.

The U.S. initially pushed the zero-tariff line in recent talks with Europe, but both sides quickly watered it down.

The U.S. insisted that automotive trade be exempted from the talks, even though the U.S. is pushing Europe to eliminate its car tariffsand has threatened tariffs as high as 25% on European car imports, if they don’t.

The reason vehicles aren’t in the talks: The U.S. auto industry itself relies on 25% tariffs to protect U.S. trucks from import competition, and the Trump administration wanted to preserve that. The European Union, on the other hand, blocked U.S. efforts to consider agricultural subsidies because it wanted to preserve the Common Agricultural Policy, which relies on subsidies. Also off the table: U.S. “Buy America” provisions, which block foreign firms from government contracts.