A Tip for Tariff Man
“I am a Tariff Man,” Trump tweeted last week. “When people or countries come in to raid the great wealth of our Nation, I want them to pay for the privilege of doing so. … We are right now taking in $billions in Tariffs. MAKE AMERICA RICH AGAIN.”
I’m sorry, Mr. President, but you got this wrong. Tariffs are paid by American consumers. About half the $200 billion worth of Chinese goods you’ve already put tariffs on come almost exclusively from China, which means American consumers are taking a hit this holiday season.
These tariffs function exactly like taxes. By imposing them, you have in effect raised taxes on most Americans. You have made Americans poorer.
Worse yet, they’re regressive. The middle class and poor pay a larger percentage of their incomes on these tariffs than do the rich.
I needn’t remind you that your Tax Cuts and Jobs Act, passed last year, slashed taxes on big corporations and the rich by about $150 billion annually. You claimed it would cause companies to invest more in America and thereby create more American jobs. They didn’t. (See General Motors.)
They spent most of their tax savings buying back their own shares of stock. This gave the stock market a steroidal boost. Not surprisingly, the boost was temporary. Last week, the stock market erased all its gains for 2018. Worse may be in store. The whole American economy is slowing.
Your tariffs could put us into a recession. The world’s other big economies are slowing, too. In 1930, Congressmen Smoot and Hawley championed isolationist tariffs that Herbert Hoover signed into law. They deepened the Great Depression.
Your economic advisers are trying to put the best possible face on all this, arguing that your tariffs are designed to improve your bargaining leverage with China.
But your recent U.S.-China trade deal is already unraveling. More accurately, the deal never happened. Your claims about Beijing agreeing to buy more U.S. agriculture and natural gas weren’t backed up by your own administration or the Chinese government. Sort of like your “great” deal with Kim Jong Un.
Some of your advisers say your real aim isn’t about trade at all. It’s to get China to stop stealing American technology. This presumably was the reason behind last week’s arrest of the chief financial officer of Chinese tech giant Huawei Technologies. (Hint: That arrest won’t make it any easier to reach an agreement with China.)
I’m not sure why you’re so interested in helping American corporations protect their technology, anyway. That technology doesn’t belong to the United States. It belongs to those corporations and their shareholders. They develop and share it all over the world.
Most of these corporations have been willing to share their technology with China in joint ventures with Chinese companies, because that’s the price of entering the lucrative Chinese market. They still come away making lots of money.
Of course, they could make even more if the Chinese didn’t take the technology. So maybe, as with the tax cut, you just want to make big corporations richer.
But let me give you the benefit of the doubt. I’m going to assume your real concern is America’s national security, and that this whole “Tariff Man” blunderbuss is designed to prevent China from racing ahead of us in technologies that are critical to national defense.
John Bolton, your national security adviser, has said the real issue is “a question of power,” and the theft of intellectual property has “a major impact on China’s economic capacity and therefore on its military capacity.” Bolton advises you, right?
But if this is your real motive – and, quite frankly, I can’t come up with another reasonable one — might I suggest a better way to protect national security?
You have the authority to stop foreign corporations from buying any American corporation whose technology is critical to national security. So why not prohibit American corporations that possess such critical technology from sharing it with China, even if that’s the price of gaining access to China’s lucrative market?
Bar them from entering into joint ventures with Chinese corporations, prevent them from teaming up with Chinese state-owned companies, and demand that they guard their technology, under penalty of law.
Sure, these American corporations would have to sacrifice some profits, but so what? Your job isn’t to make them more profitable. It’s to protect the United States. And isn’t this is a better way to do so than to impose a hugely regressive tax on average Americans and risk a global recession?
Robert Reich’s latest book is “The Common Good,” and his newest documentary is “Saving Capitalism.”
© 2018 By Robert Reich; Distributed by Tribune Content Agency, LLC
In The News
One of the biggest challenges facing agriculture in the U.S. and around the world is how to make farming more... Read More
One of the biggest challenges facing agriculture in the U.S. and around the world is how to make farming more efficient and limit greenhouse gas emissions in the process. Among the most promising tools for doing so are CRISPR and GMOs. Scientists are now using CRISPR... Read More
Health care reforms that make medicines more affordable for patients and encourage discovery of powerful new medicines are possible. We’re... Read More
Health care reforms that make medicines more affordable for patients and encourage discovery of powerful new medicines are possible. We’re nearly there: If Congress were to fix some counterproductive flaws, the drug pricing provisions in the Build Back Better Act would represent genuine advances. The bill... Read More
Our government is supposed to protect us, that is the bare minimum of what the American people expect from their... Read More
Our government is supposed to protect us, that is the bare minimum of what the American people expect from their lawmakers. Which is why the recent push for deregulation across the nation is troubling. The 1970s and 1980s brought a wave of deregulation intended to reverse... Read More
Democracies around the world face a growing number of challenges. Authoritarianism is resurgent in many countries. Bad actors are challenging... Read More
Democracies around the world face a growing number of challenges. Authoritarianism is resurgent in many countries. Bad actors are challenging and undermining global rules and norms on every continent and in many international institutions. COVID-19 continues to tear at the social fabric and economic livelihoods of... Read More
The agricultural portion of Biden’s methane reduction plan, announced alongside the COP26 global methane pledge, proposes a reduction in U.S.... Read More
The agricultural portion of Biden’s methane reduction plan, announced alongside the COP26 global methane pledge, proposes a reduction in U.S. cattle emissions by facilitating the development and adoption of climate-friendly livestock innovations. It’s a notable inclusion, since, despite being overshadowed by the oil and gas industries... Read More
Abraham could have asked for anything. The Make-A-Wish folks stood ready to make a dream come true for the 13-year-old... Read More
Abraham could have asked for anything. The Make-A-Wish folks stood ready to make a dream come true for the 13-year-old boy, who has aplastic anemia, a life-threatening blood disorder. But Adeola “Abraham” Olagbegi didn’t ask for a PS5 or a day with LeBron James. No, he... Read More