'Liberation' Through Massive Tariffs is Not Going to End Well for Republicans

Republicans (mostly) avoided political disaster because Trump I implemented (mostly) satisfactory policy. Not so with Trump II.

Dear readers,

While the idea that the imposition of huge tariffs constitutes “liberation” is ridiculous, some of the other descriptors the White House is using for President Trump’s big tariff announcements are accurate enough. His sweeping global tariffs will be “transformative,” “historic,” and “bold,” they say. That’s true, just as much as you can honestly say that a friend’s ugly shirt is “remarkable.” As I’ve said before, this policy is so stupid I barely even know what to say about it, except that I’d like to remind people that political gravity still applies. Trump’s ability to survive politically to date does not mean he will maintain his support while voluntarily inducing a recession.

Republicans are too complacent about his “base” and Democrats are too fatalistic about it.

Democrats have been bewildered for 10 years by Trump’s political resiliency, and particularly his ability to win two out of three presidential elections despite his appalling personal behavior, manifest incompetence, and support for certain unpopular policies. One key to understanding that resiliency is that on the economy, his first administration was not actually incompetent. His team, led by Steve Mnuchin and Gary Cohn, made conventional policy choices like cutting taxes on capital investment and fiscally stimulating the economy in response to the negative economic shock of COVID. There are plenty of available criticisms of their policy choices — the 2017 tax cut made our fiscal system more regressive and needlessly grew the federal debt, for example — but overall, Trump and his team enacted policies that were consistent with keeping the economy strong and the job market tight, and they were rewarded for it politically. Meanwhile, Trump stayed away from unpopular cuts to Medicare and Social Security that a President Romney might have pursued, and his unpopular plan to repeal the Affordable Care Act went down in defeat in Congress, reducing the political price he paid for the effort.

Both Republicans and Democrats have drawn too strong an inference from Trump’s fairly stable approval numbers during his first term — that Trump has an unshakeable base of nearly half the country that’s with him no matter what he does — but there’s an alternative explanation. Despite all the noise, 2017-2019 was a pretty stable time; 2020 was a year of crisis, but that crisis was caused by an external factor for which voters (reasonably) did not blame Trump; and his administration’s response to that crisis was mostly satisfactory. Then, Trump left office, and he was succeeded by a president who made more economic mistakes than he did. When you frame the record that way, is it surprising that voters decided returning him to the presidency might lead to both more stability and better economic outcomes?

While Trump did impose some tariffs in his first term, their effects were offset by other pro-growth policies and by specific subsidies aimed at affected sectors, and they were relatively modest to begin with, compared to the ones he has already imposed this year. His tariff policies just weren’t that important overall, last time around. Now, Trump is already more unpopular than any president on record at this point into his term except himself in his first term. His approval on the economy is underwater by nearly 20 points. And that is before his tariffs have gone into effect at scale, with all the trouble that they are sure to cause for prices and supply chains and employment.

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Trump’s supporters lately are fond of saying that his conservative critics “refuse to acknowledge what time it is” — this is their all-purpose justification for making policy that goes against what was once conservative orthodoxy, especially the idea that free trade promotes growth and prosperity. But if anyone doesn’t understand what time it is, it’s Trump. Voters elected him because they decided it was time for a return to normalcy and stability, especially stable prices. The voters wanted to turn back the clock six or seven years, to how things were before COVID. He has somehow decided instead that his mandate is to turn the clock back 130 years and implement McKinley-era protective tariff policies to promote domestic production at the expense of domestic living standards. That didn’t work out great for Republicans at the time — the McKinley tariff of 1890 was drastically unpopular for its effects on consumer prices, and helped cost Republicans their congressional majorities in the 1890 midterm elections — and there’s no reason for Republicans to believe they can punish their own voters with high tariffs now and benefit from a Trump approval rating even in its current “slightly underwater” position. They are cruising for a bruising in next year’s elections.

Very seriously,

Josh