Of Tariffs and Totalitarianism

In MAGA world, there are no honest skeptics

I’m traveling, and posting will be lower for the next 6 weeks or so — zero when my wife and I are on our bike trip. But I thought I’d say something brief today about the auto tariffs. There’s lots of economic analysis out there (spoiler: they’re bad). Let me add two observations: what these tariffs say about America as an ally (worthless) and what the response to criticism says about the Trump administration’s mindset (totalitarian).

On the first point, I’ve seen surprisingly little discussion of the legal basis for these tariffs. U.S. law gives the president a lot of discretion to impose tariffs without prior legislative approval, but the process is still supposed to be constrained by rules. There are, or are supposed to be, specific situations in which the president is allowed to impose tariffs, beyond “he feels like it.”

So these tariffs are being justified under Section 232 (of what? never mind), defense of national security. For Canada and Mexico, this is bitterly ironic. As Joey Politano points out, substantial production has been shifted from Asia to our near neighbors because nobody seriously considers importing manufactured goods from Mexico, let alone Canada, a threat to national security.

But Donald Trump seems determined to treat our allies as enemies, with a special animus toward Canada. And this systematic destruction of any credibility America might have as a trusted partner is a even bigger story than the impact of tariffs on consumer prices or real GDP.

On the second point, the other day Larry Summers declared that administration claims that foreigners will absorb the entire cost of tariffs are “ludicrous.” I’m not sure why this declaration was considered newsworthy; Larry was only echoing what every economic principles textbook and 95 percent of economists say (see the chart at the top of this post.)

Still, Larry’s statement did inspire some headlines, and got a response from Scott Bessent, the Treasury secretary. Did Bessent explain why he thinks the administration is right and almost the entire economics profession is wrong? No: he immediately accused Summers of being, in effect, a paid protestor:

This isn’t how democratic governments respond to criticism. Even if you’re sure you’re right, you’re supposed to acknowledge the possibility that critics are sincere unless there’s clear reason to believe otherwise. But Trump and his minions already have a totalitarian mindset, in which there is no such thing as legitimate skepticism of the Leader’s proclamations. Anyone who expresses doubt, whether it’s Larry Summers or the Wall Street Journal editorial page, must be a corrupt globalist, or a woke radical left-wing Marxist, or maybe both. Hey, Larry Summers isn’t really Jewish — he’s Palestinian.

Do people in the business world still think Bessent is a sensible guy who will exert a stabilizing influence on Trump policies?

There’s a lot more one could say about the Trumpist mindset and its implications. But for now, let me just note that it’s one more reason nobody should believe claims that there’s a serious intellectual agenda behind the administration’s economic policies. Serious agendas arise from hard thinking and debate; what we have here are people dedicated to the proposition that anything Trump says is right, and anyone who questions the perfection of his thought is an enemy with evil motives.

This is not a recipe for good policy.

MUSICAL CODA

An anthem for North American economic integration