Members Only | June 3, 2019 | Reading Time: 3 minutes
With Tariffs, Outcomes Don’t Matter to Trump
All that matters is looking tough on immigrants.
Donald Trump is trying to force the Mexican government to do what the United States government has failed to do since forever: prevent immigrants from arriving without proper authorization. The president campaigned on stopping “illegal immigration.” The reality is more complex, however. He’s doing his best to pretend it isn’t.
Trump said last week he will increase tariffs on Mexican imports until the Mexican government ends all improper border crossings. You might call this extortion, but that’s a misleading term. Extortionists care about outcomes. This president does not.
For this president, it doesn’t matter that tariffs, once they are fully realized, would be a $27 billion tax on the state of Texas, Mexico’s largest foreign trading partner.
It doesn’t matter that tariffs might trigger a recession in under a year.
It doesn’t matter that Trump is disgorging 50 years of GOP orthodoxy.
It doesn’t matter that Mexico can’t stop border crossings.
You might call it extortion, but that’s misleading. Extortionists care about results.
To this president, appearances matter more than anything. He’s betting they matter more than economics. The smart money would have been against him in the not-too-distant past. We’ll see if partisanship trumps economic interests next year.
Reminder: a tariff is a tax.
It is not paid by any government. It is paid by private businesses importing goods and services into the country imposing the tax. But businesses don’t merely eat the loss. They pass it on to buyers. The Mexican government therefore won’t feel an immediate impact from Trump’s tariffs (the long-term is a different question). The Mexican government does not have immediate incentive to do what Trump is demanding.
Indeed, the only people with any incentive to do anything is us.
Americans will pay more. Two times over, in fact. Once as consumers of Mexican goods and services, then again as taxpayers. The White House is easing tariff pain by giving billions in handouts to farmers who can’t get their crops to market due to a trade war the president doesn’t seem to care about winning. Again: all that matters is appearances, and mattering most is the appearance of getting tough on immigrants.
There’s a lot of debate about when all this will end, but rarely about what’s most likely: it won’t. Not soon. Trump has now linked trade to immigration. There’s no going back as long as people are able to cross the border. Since the border is thousands of miles long, people will always be able to cross. (As I said, Trump wants the Mexican government to do what ours can’t.) So this new Mexican front in Trump’s international trade war won’t end any time soon. This is a chance for the Democrats to strike.
I don’t mean Democratic candidates for the presidency. (As I have argued, they should left alone to forge broad national coalitions.) I mean candidates for the Senate.
There are at least three incumbents from big red agricultural states wedged between economic and partisan realities. They are Iowa’s Jodi Ernst, Texas’ John Cornyn and Arizona’s Martha McSally. Add three more weak incumbents and you have at least six Republicans whom the Democrats might knock off to take control of the Senate.
Ernst, Cornyn and McSally could push against Trump for the benefit of their farmer constituents if they talked less about “tariffs,” more about “taxes.” Yes, they are the same, but “tariff” doesn’t have the same ring to it. So far, it’s only “tariffs.” As long as they avoid it, Democratic challengers should use it. Moreover, they should pick up abandoned GOP thinking in order to wedge Republican voters in red states. They should rail against Trump’s tax hikes and his interference with the free market.
Oddly, Fox News can help.
Fox News is going to push incumbents to hold the line. Its interests, in the context of international policy and trade, are not aligned with those of Republican senators. So Democratic challengers are free to stand at the inflection point where Fox is pulling incumbents in one direction and their constituents are pulling them in another.
All this presumes, however, that economic self-interest trumps partisanship. In other words, that presidents rise and fall with the state of the economy. If Trump is harming red states with his tariffs, the thinking goes, red-state senators should be in trouble.
For one thing, we shouldn’t underestimate the power of what I’ve called Republican masochism. GOP voters can be trusted to mutilate themselves if that’s what it takes the hurt Democrats. For another, the alignment between the economy and presidential popularity has decoupled since 2008. Republicans tend to see the health of the economy through a partisan lens rather than assessing it on their own. This is why the economy looked much better to GOP voters immediately after Trump took office.
Still, money is money. Tariffs hurt. And Trump wants to pretend they don’t.