Is Donald Trump Creating His Own Viet Nam?

GELFAND’S WORLD--Hubris might not be the exact word to describe Donald Trump's threat to impose tariffs on steel and aluminum imports, but it is close enough to the idea expressed by the Greek tragedians. There is pride and there is arrogance, there is cruelty and there is a colossal level of foolishness. Together, these character defects have led to this latest bit of posturing that may ultimately damage the national economy and in so doing, destroy Trump's presidency. The problem for the rest of us is that the tariff, should it actually be effectuated, is likely to do significant economic damage to the whole western world. 

As one former Bush official pointed out, everyone loses in a trade war, and such wars are hard to stop once they get started. These remarks were in response to Trump's statement that trade wars are good, and easy to win. 

Trump's remark was a remarkably stupid thing to say, considering. 

At this point, Trump has a choice whether to back off on his threat and lose face in the process, or to barge right ahead and find himself in a situation that only gets worse. 

There is an analogous story that many in this country remember. Back in the mid-1960s, president Johnson had to make what he probably thought of as a routine, even humdrum decision -- whether or not to send more troops to Viet Nam. There was some resistance, but in the end, LBJ stuck to his guns. He sent more and more troops to Asia and even in the face of increasing public protest, he rode that tiger right through to 1968. At that point, he declared his retirement from politics and unintentionally left things to Richard Nixon. For the U.S., Viet Nam was an ongoing disaster that affected our politics, our economy, and our self respect for the rest of the twentieth century. 

Starting a trade war might not do as much damage as LBJ's Viet Nam decisions, but it is equally foolish. The Viet Nam escalation was at least based on an ongoing policy of containment of communism -- to fail to fight in Viet Nam would have been to discard that policy . By contrast, creating a trade war over steel and aluminum imports has no such foundational logic. 

In a sense, Trump's desire to make America great again by bringing back American steel preeminence is like asking to return the world to its immediate-post-WWII condition in which much of Asia, Russia, and western Europe were in ruins. You don't get that back (or should you want to) by messing with the world's carefully crafted system of currency and trade controls. 

Creating an international recession by instigating a trade war is simple destructiveness. It is clear that Trump doesn't have a lot of support among current economists. 

Well, it's one way to get people's minds off guns and sex scandals for a few days. 

Economic protectionism goes against Republican doctrine of the past half century. It violates the idea of free markets. It even violates the precepts of that Republican catch-all called supply side economics

The latter point is certainly what you would conclude if you were an acolyte of the original supply side economics, the theory that has been so influential among Republicans since the 1970s. Back in the days just before Ronald Reagan was elected president, Jude Wanniski wrote a book titled The Way the World Works. Along with the supply side arguments originally offered by Arthur Laffer, it made an argument that the Great Depression was created or at least strongly stimulated by the Smoot-Hawley tariff of 1930. The argument in essence was that the effect of such a tariff was to reduce worldwide economic output and thereby make a cyclic recession into a worldwide disaster. 

Whatever Wanniski's logic and underlying motivation (whether academic or politically strategic) the supply side approach has been supported by several generations of Republican politicians. Whenever they try to cut taxes on the rich, they argue that reduced taxes have a stimulatory effect. You could hear some of that old cant in the run-up to the recent Republican tax bill. 

But that tax cutting argument is linked in Republican ideology with the free trade argument. They are two horns on the same beast -- maybe not particularly merciful to the working poor, but of a kind. 

So, it being 2018 and the presidency being in the hands of Donald Trump -- a man who obviously doesn't think coherently about economic theory -- why not threaten Europe, Asia, and Canada with a trade war over steel and aluminum? What could possibly go wrong? 

At some level, the newly announced trade war is consistent as a Trump centerpiece. You may remember that even during the campaign, he was complaining about how bad our trade agreements are -- not just NAFTA but the recent agreement with South Korea too. He has been complaining that the Asians are taking us to the cleaners. 

Of course Trump, in his usual way, hasn't provided a consistent description of the problem or an appropriate remedy. Mostly, he argued that he is the consummate negotiator and if we were to leave things in his hands, we would do much better as a nation. You can fill in your own jokes about how tired we would become of all the winning. 

Apparently that winning has not yet arrived through the sheer force of Trump's personality or good looks. So here comes Trump in one of his off weeks and drops a bombshell announcement regarding tariffs on foreign steel and aluminum. Apparently negotiations haven't been as fruitful as he promised, so he's going rogue. 

By now, the whole world has heard of the threat, knows of the reaction from the Euro-zone, and has become acquainted with the reactions of economists and business experts. Political centers who might otherwise agree with some of Trump's actions have weighed in. For example, the libertarian-conservative source Reason has a whole collection of articles about free trade. [] The imposition of punitive import tariffs doesn't find favor there. 

Even the most superficial look at the facts belies the Trump approach. 

It turns out that for every American steel worker who may benefit from reduced foreign competition, there are fifty or sixty other American workers in the manufacturing sector who will be hurt by it. Just think about the fact that airplanes and other aerospace products are prime American exports. All of a sudden, Airbus will have a serious advantage in terms of the cost for what goes into a modern jet aircraft. Rolls Royce will have an advantage over GE in terms of the raw material that goes into manufacture of jet engines. 

Public radio was able to find one manufacturer who is supporting Trump's approach. It turns out he has a company that manufactures stainless steel beer kegs. When questioned, he conceded that the tariff threatens to raise the price of his raw materials. But he is hoping that the steel tariff is just the beginning and that his company will get some protectionist advantage down the line. I wonder if he recognizes that he is rooting for an actual trade war. Let's hope that such people are in the minority. 

I also wonder if Trump's latest pronouncement will push a few Republicans into the Independent voter ranks. That would be a serious signal to the holdouts in his party.


(Bob Gelfand writes on science, culture, and politics for CityWatch. He can be reached at