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Unlike most political commentators, I have no problem admitting when I’m wrong. In fact, I normally like it because being wrong usually means things worked out better than I expected. The latest example of my potential wrongness comes in the form of a trade deal with China that, if it materializes, means the tariffs I’ve been railing against for the better part of a year may have actually worked in our benefit.
Don’t get me wrong. That doesn’t mean I support tariffs. It also doesn’t mean I approve of using tariffs as anything other than a legitimate threat. Even if the deal comes through, I would have preferred to see a very limited form of tariffs used in reality with the threat of worse ones in lieu of a deal. But I didn’t expect a deal to come at all based on the way the President has used them, which means if the deal comes through, I was wrong about the tariffs being completely bad.
In that case, they will have only been partially bad.
As the President has noted, we’ve brought in billions of dollars in “tariff money” since he started instituting them. This isn’t something he should be bragging about, as tariff money is invariably a filtering of money from United States citizens and businesses who pay higher prices to receive resources and products affected by the tariffs. No, China didn’t “pay” tariffs. Their companies simply charged more from U.S. importers (and therefore U.S. consumers) to compensate for the increased expenses.
Nevertheless, the economic effects of the tariffs so far have only been a little bad. They would have turned horrendous if allowed to continue for much longer, and if a deal isn’t made, that’s still their fate. But news is coming in that hopes are high for a trade deal.
I am pleased to report that the U.S. has made substantial progress in our trade talks with China on important structural issues including intellectual property protection, technology transfer, agriculture, services, currency, and many other issues. As a result of these very……
— Donald J. Trump (@realDonaldTrump) February 24, 2019
….productive talks, I will be delaying the U.S. increase in tariffs now scheduled for March 1. Assuming both sides make additional progress, we will be planning a Summit for President Xi and myself, at Mar-a-Lago, to conclude an agreement. A very good weekend for U.S. & China!
— Donald J. Trump (@realDonaldTrump) February 24, 2019
We’ve heard similar claims in the past, but there’s actual action attached to this one. By delaying or possibly ending the tariffs that are set to be imposed next week, the President is expressing real hope that an equitable trade deal can be reached. This is the closest we’ve been to a tangible deal. For the first time, I’m actually seeing it as better than 50% odds that we’ll have a trade deal in place sooner rather than later.
Before anyone jumps up and down and says, “See, tariffs work,” let’s temper the enthusiasm a bit. Even with a trade deal, there has still been damage. The United States is seen as a better trading partner when our power as consumers is used to promote free trade with the rest of the world instead of the “fair trade” ideology of Chuck Schumer, Bernie Sanders, and President Trump. But unlike the Democrats’ use of tariffs for revenue and to curtail business growth, the President attempted and may succeed at using tariffs to bolster trade numbers. I shouldn’t have to say this to a conservative audience, but in the era of Trump, nothing should be taken for granted. Trade deficits are NOT bad. In fact, they’re an indicator of the state of the economy. As trade deficits in a consumer nation like the United States go up, that means more people are buying, prompting American companies to import more.
The argument that trade deficits are bad are made strictly by leftist economists and the President of the United States. Fiscal conservatives universally see trade deficits as a key indicator of economic strength.
If this is the path that gets China to import more United States goods, so be it. My concern is never about being right. My concern is about doing what’s right for America. If this is how it’s done, then this is how it’s done and I’m happy as a result.
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