How Trump’s Tariffs Are ‘Perversely’ Consistent With China’s Medium-Term Goals

On Saturday, we asked if Trump’s trade wars are “fake news“.

That was just a kind of off-the-cuff post aimed at highlighting the following commentary from Goldman which suggests that while the market is pricing in the impact from the narrow steel and aluminum tariffs, no one seems particularly concerned about an imminent escalation:

Beyond that though, there’s a more general sense in which Trump’s trade balderdash is “fake news”, and this is something we talked about at length over the course of the last week.

Trump doesn’t care one way or another for flyover America. Hopefully, you know that. Trump is a textbook narcissist that has never demonstrated any regard whatsoever for anyone other than himself, so the idea that he was going to put “forgotten Americans” first if he was elected President was always a laughable proposition. Does this look like someone who cares about “everyday Joe”?

Right. The only sense in which he cares about working Americans is in the context of his poll numbers and to be honest with you, there’s an argument to be made that he only cares about that now because he got elected. That is, there’s all kinds of anecdotal evidence to support the contention that Trump never intended to win the election in the first place and it is by no means clear that his nascent 2020 campaign is the product of his desire to govern. Rather, it seems much more likely that the only reason he’s interested in running again is because his ego mandates it.

So when it comes to the tariffs, the bottom line is that he’s just doing this so he can check a box. Here’s how we put it a couple of days ago in “With Trump Trailing ‘Generic Democrat’ In Polls, Tariffs Are Desperate Political Gambit“:

Additionally, one certainly imagines that at least some of the everyday, “forgotten Americans” that Trump claims to represent (despite being a billionaire with a penchant for arranging photoshoots that depict him and his family surrounded by gilded furnishings) have figured out that his policies are not in fact designed to benefit them at all.

Anyone who took even 30 minutes to analyze the tax plan could see that it was aimed at helping high income Americans (here are the numbers) and the best available estimates are that Trump’s family will benefit to the tune of some $1.1 billion from the tax cuts he crammed down everyone’s throats.

Between that, the fact that the promised “big beautiful wall” is still just 8 lonely prototypes in the middle of the San Diego desert, his failure to “repeal and replace”, and the bungled effort to institute the Muslim ban, he really – really– needs to engineer something he can definitively point to as evidence that he’s made good on some of his campaign trail promises.

When you throw in the fact that Republicans have been unable to break the Washington gridlock despite controlling the government and the irreparable damage Steve Bannon did to the GOP by backing Roy Moore, you end up with what looks like dire straits headed into the mid-terms.

And so: tariffs! Trade wars to the rescue!