Oren Cass, the prominent New Right commentator, thinks the concept behind Trump’s tariffs is right, but the execution is flawed. He believes the initiative can work if it is phased in, made more flexible, and explained better. Is he right?
Here are my reactions to his arguments:
- Trump is never going to give up his right to go with his gut and change positions on a dime. Asking him to take a consistent position, explain it clearly, and ride with it regardless of the consequences is a waste of time. American business knows that and will refuse to rely on anything he says. As a result, the investments that Cass is counting on will never happen.
- In the end, Cass is asking America as a whole to accept a lower standard of living in the form of significantly more expensive goods in exchange for more factory jobs in red states. He doesn’t like government programs that redistribute wealth, but that is exactly what his tariff scheme, if successful, will do.
- Universal 10 percent tariffs will generate some revenue and provide some incentive to build factories in America, but the revenue will probably be sent to farmers to compensate for the loss of exports, and the incentives won’t be enough to make much of a difference. This will be a new form of right-wing recycling; American consumers will pay the tariffs, and farmers will get the proceeds.
- As I’ve noted many times before, there is no vast pool of workers to take the new hypothetical factory jobs in the unlikely event they actually do appear. Of course, if the Cass plan creates a recession, that could change.
- Cass sees the Reagan-Japan voluntary auto agreement as a model for deals that will be inspired by the reciprocal tariffs. That won’t work, because reaching enforceable managed trade agreements with scores of countries based on the entirety of their economic conditions–not just auto sales–will be too complex.
- The Cass critique of the status quo is based on the premise that we need to bring back more manufacturing jobs, not because they are inherently superior to service jobs, but because they can be done by underemployed men in red states. Why not simply take some of the proceeds from globalization and give them to its victims in the form of tax credits and social programs? That would be a more efficient solution to the same problem.
- There will be innumerable serious casualties in a trade war with China. We are proposing to fight it without any meaningful preparation and without allies, thanks to the blundering of the new administration. Cass would probably agree that this is a mistake, but the die is cast; it is already too late to turn back.