President Donald Trump has announced that he will impose tariffs on imports coming from Canada and Mexico into the United States of America. Almost all economists say that tariffs are de facto taxes, which will ultimately, in this case, be paid by American consumers. Now, I don’t dare argue with the economists. However, I’d like to comment on the politics of the tariffs because I find Donald Trump’s move quite remarkable.
Number one, I think it’s really the spin of the year. It’s a masterpiece in terms of political framing because I can’t recall a time when new taxes have ever been welcomed so enthusiastically by those who will pay for them.
Number two, I think the move is quite courageous. In the current environment, inflation is a major issue and it has arguably cost Democrats the last election. So, to push through with this, I find it really courageous.
That said, I also see classic Trump here. I think that Donald Trump is uniquely skilled at sensing and exploiting weakness, and that’s exactly what he’s trying to do here. In fact, much of his success—both as a businessman and in politics—is based on that very skill. How does this relate to the trade war? Watch the latest edition of The Campaign Doctor, where I discuss this in some detail.