The official Trump-administration line right now is that the trade war he’s launched against China, the European community, and others is a total no-brainer, and simply a matter of Uncle Sam deciding to stop being Uncle Sucker. This March tweet from POTUS himself summed up the philosophy, such as it is:
You read that and wonder if Trump took a single economics class at the University of Pennsylvania, but it’s not an entirely unpopular position. And officially, he’s still claiming trade wars are fun and easy, as recently as this morning:
But this is undoubtedly not what the White House is hearing from Republicans in the places — especially though not exclusively agricultural states — where Trump’s “easy” and “simple” trade polices are wreaking havoc and breeding political panic. The good thing for Trump is that having all but abandoned free-market economics, he has no inhibitions about just throwing money at the problem, as the Washington Post reports:
The U.S. Agriculture Department on Tuesday plans to announce a $12 billion package of emergency aid for farmers caught in the midst of President Trump’s escalating trade war, two people briefed on the plan said, the latest sign that growing tensions between the United States and other countries will not end soon …
The aid package is expected to target soybean farmers, dairy farmers, and pork producers, among others. White House officials hope it will quiet some of the unease from farm groups, but the new plan could revive debates about taxpayer-funded bailouts and the degree to which Trump’s trade strategy is leading to unforeseen costs.
Details about the bailout plan are scanty at this point, though the Post indicates it will include “direct assistance, a food purchase and distribution program, and a trade promotion program.” Interestingly enough, direct assistance will apparently come principally via the New Deal’s Commodity Credit Corporation, a federal entity that needs no new congressional authorization in order to borrow billions from the Treasury and pay it out to farmers to “stabilize, support, and protect farm income and prices.” It’s intended to keep farmers from feeling the brunt of circumstances beyond their control, and since Trump’s trade war is most definitely beyond their control, it fits, albeit in a way that will make small-government conservatives who already hate protectionism even crazier. But it is a bit novel to hit farmers with one hand and then offer them compensation with the other, and it could even expose the U.S. to sanctions by the World Trade Organization for supplying the same sorts of illegal subsidies of which Trump likes to complain.
Axios notes the bailout is being advertised as “temporary,” but that, too, was the original idea with the tariffs that produced the retaliatory actions by China that have created the most heartburn in the heartland. If the trade war drags on, then so, too, will the administration’s need to deploy some old-school democratic socialism (though perhaps with an appropriately Republican upward-redistribution twist depending on how much aid goes to big agribusiness entities).
Using government power to dig economic holes and then fill them up: Isn’t that what it means to Make America Great Again? This reaction from farm-state senator Ben Sasse will be quoted a lot:
