In golf, there is a concept of “feel” versus “real”. This article from golf.com explains it in more depth, but basically it means that someone practicing golf will try to exaggerate a motion in their swing, such as pulling downwards on the golf club, so that when they go for the real swing, the motion comes naturally. You would not want to actually do this exaggerated motion during a real swing, though, because then you may overdo it and shank the golf ball into the woods. How does this apply to Trump’s tariffs? Well, for one thing, he definitely exaggerated the hell out of that tariff “motion”. More importantly, the practice of this motion was being done far before April 2nd, or as he called it, “Liberation Day“. I believe Trump was trying to make the tariffs seem as destructive as possible, in the hopes that countries would fall in line. Well let’s say his golf club was not on line, the club face was wide open, and he sliced the shit out of this ball into a bush full of snakes. Okay, I promise no more golf analogies. As much as I hate to say it, Trump is pretty decent at golf (not champion level as he would claim at Trump International Golf Club), but he has quite a swing. What Trump is not good at, though, is world trade dynamics and policy. In this piece, I want to discuss a couple of theories as to exactly why Trump imposed these tariffs and why he has recently decided to back off of most of them, including China.
Theory 1: The MAGA Master Plan
The most conservative big-brain idea I have heard of comes from Stephen Miran. Miran is the new chair of the Council of Economic Advisors and has long been a protectionist, which coincides very well with Trump’s profound belief in the power of tariffs. This video from Dr. Joeri Schasfoort of Money & Macro explains it in depth.
To sum it all up, many believe that the declining industry of the United States is becoming a national security concern. After all, reality dictates that you need a lot of factories to make a lot of bombs. So Miran’s answer to this is what Dr. Shasfoort calls the “MAGA master plan”, which is a set of steps to reindustrialize the U.S and still maintain the U.S. dollar’s reserve currency status. If you are wondering why our reserve currency status would be in question, it is because we would now be importing less, so we will be handing foreign countries fewer U.S dollars to stock in their reserves. This will also lead to a less valuable dollar. I know that sounds bad, but just vibe with Miran on this one, he has a concept of a plan. Step 1 is Tariff Chaos. This stage involves showing how macho and alpha dog you are by threatening the whole world with massive generalized tariffs. This is to create negotiating leverage to kick off the other two stages. Step 2 is Reciprocal Tariffs. This is where the U.S, no matter what, matches the tariffs levied by foreign countries on our imports. Why? If China always retaliates with a higher tariff than we add, then this master plan will never come to fruition. Step 3 is the Mar-a-Lago Accord, which is described as an economic cooperation agreement between friendly “Green” countries that agree to become our vassal states in exchange for protection by our military and economic security in the form of the U.S dollar. The video explains how this is basically a throwback to our old way of doing things during the Bretton Woods agreement, except in a neo-fascist sort of way. So could this work? Maybe if Miran had tried this in Dungeons and Dragons, it could have, but the fact of the matter is, Trump is not actually that good at negotiating. Remember, these are actual leaders and politicians Trump is now dealing with, not the corrupt jesters that roleplay as political leaders like we have in the U.S. So convincing Mark Carney or Emmanuel Macron to fall in line is not as easy as it seems. The U.S. is not the only cowboy in town when it comes to being an economic powerhouse; there is such a thing as China, and they are now competing on a massive scale with American companies in industries that we originally felt comfortable in, like automobiles. And on top of that, we are threatening the basic sovereignty of our closest allies, so why the hell would they want to go down the route of becoming a vassal state to begin with? They won’t, so this plan is dead in the water, just like this golf shot.
Theory 2: The Trump Master Plan
Perhaps Trump is just using these whole shenanigans to manipulate the market. If you don’t care about the law and only want to enrich yourself and those around you, why not just do a worldwide pump and dump scheme? You are now aware that there are literally no consequences for your actions in the casino, so the logical next step is to start counting cards and bringing down the house. I really want to believe that a guy like Trump has no use for more money, but considering the fact that New York still has him on the hook for that massive fraud case, I would not be surprised if he is just covering his own ass still. More evidence that Trump is money hungry includes his cryptocurrency scheme and his constant overcharging of the Secret Service whenever they stay at one of his properties. It also does not have to be the case that Trump is doing any kind of insider trading to enrich himself. He could also be trying to strong-arm American companies into falling in line with his political and, more importantly, self-fulfilling agenda. Time will only tell which of the two he is trying to accomplish.
Theory 3: He is a Big Boy Now
I think at the end of the day, Trump wants to feel like he is in control of everything. This whole tariff ordeal was probably something he read in a Twitter post about William McKinley, and he just wanted to feel as tough as a guy who spent his final years conducting wide-scale imperialism in the Pacific. His new trade policy is very close to his general foreign policy in the sense that he doesn’t want to feel like he is being pushed around by the Bush-era losers anymore. Picking on Iraq and Afghanistan is sooo last decade, and everyone knows the good shit is actually in Canada and Greenland. These tariffs are just a piece in his big puzzle of inflicting damage on our international relations, just so he can finally not get yelled at when he wants to annex his own new large frozen version of Hawaii.
Final Thoughts
Performing shocks to your own country’s economy in the form of tariffs is not going to get the world on board with your new “world order”. Good economic policy comes in the form of the carrot, not the stick. Using the stick too much is going to piss people off and lead to mass layoffs in the short term. It is very possible that Miran’s theories could work, but not in this world, or at least not with this administration. Trump does not have the grace and patience to execute this master plan correctly. He is also missing the industrial policy element of this whole reindustrialization idea. You have to actually start giving money out like Biden did to get these companies to come back to the U.S. That missing piece leads me to believe that this is all kind of a scam. He is all about the feel, but the economy is actually real, and real things do not react well to being spun around in circles by a madman. As he has shown in the past few weeks, he is willing to back away from these tariffs in an instant, because thankfully, the only thing that keeps his brand alive is if the state of the economy remains good. If he does something to screw that up, the Americans that voted for him are going to start getting very confused (like they already are).