Newsmax offered a summary of Gorka’s comments:
Gorka said he does not agree with the belief that the tariffs will hinder the U.S. economy, because he has “always rejected that the economy is a closed system.”“That is what the left believes, that you have got to have a net loss from somebody for somebody else to gain,” he said. “That is what socialism believes. It is not true. You can have an economy expand, steel sector expand and have manufacturing expand at the same time. Everybody who is commenting now has no idea what the future holds on any negotiation and needs to slow down and take a deep breath.”Further, Gorka said that Trump has a “powerful way of negotiating,” so it’s too early to predict disaster in any way.
One has to step back and admire Gorka’s formula for political commentary:
- Refer to critics as socialists;
- Claim the president’s negotiating skills will cut any Gordian knot; and
- Move on.
Unfortunately for Gorka and the country, it’s gibberish. For one thing, actual socialists do not as a general rule criticize tariffs. Heck, socialists love tariffs. Indeed, the one economic organization in history that, like President Trump, planned a strict balance of trade among members was the Council for Mutual Economic Assistance. It was run by — wait for it — the Soviet Union.
Oh, by the way, do you know who also views the economy through a zero-sum lens? Trump:
Mainstream economists, on the other hand, have been quite certain for some time that imposing tariffs on one sector generates market distortions that negatively affect other sectors. It also leads to a dead-weight loss for the entire country. Indeed, the first analysis of the steel and aluminum tariffs’ effect on the U.S. economy came out earlier this week. Even without any retaliation by our trading partners, the results are not good: “The tariffs would increase U.S. iron and steel employment and nonferrous metals (primarily aluminum) employment by 33,464 jobs, but cost 179,334 jobs throughout the rest of the economy, for a net loss of nearly 146,000 jobs. More than five jobs would be lost for every one gained.”
To be as fair to Gorka as humanly possible, I suspect he was trying to claim Trump is such a super-awesome negotiator that eventually other countries will lower their trade barriers and the outcome will be win-win for both the steel sector and the steel-using sector. Economists would disagree with him on this point as well, but what if they’re wrong? Is it possible that Trump’s bullying tactics could pay off?
After reading this by my Washington Post colleagues David Lynch, Heather Long and Damian Paletta, I have severe doubts about Trump’s negotiating prowess:
Government lawyers have struggled in recent days to reconcile Trump’s public comments with the legal provisions they have been told to enforce. For example, Trump is trying to use the tariff threats to force Canada and Mexico to offer unrelated concessions in NAFTA. By publicly acknowledging this, he has potentially spoiled the legal standing of the tariffs, a senior administration official said, making it harder for them to design the prohibitions.Earlier this week, Trump suggested that he would exclude Canada and Mexico from the new levies only if they made concessions in negotiations aimed at reaching a new NAFTA deal. Officials from both countries rejected the demand, with Canadian Prime Minister Justin Trudeau calling the new tariffs “absolutely unacceptable.”
The Wall Street Journal’s Greg Ip points out what is truly stupid about Trump’s tariffs: He’s targeting them at the countries he needs to focus on the true source of overcapacity in the steel market.
The U.S. isn’t the only country that has a chip on its shoulder about trade. When it comes to China, so do countless others.
For President Donald Trump, this could be an opportunity to lead a coalition against China’s predatory trade behavior. Instead, he is threatening trade war with the countries that would make up such a coalition, over commodities that are much less vital to the U.S.’s economy and national security than the sectors threatened by China’s expropriation of intellectual property. …
The pain of Mr. Trump’s tariffs will fall not on China but on actors that play by the rules, including Canada, Japan and the European Union. When the EU threatened to retaliate, Mr. Trump said he would escalate by raising duties on European cars.
Chinese misbehavior has thus brought the U.S. to the brink of trade war with its own economic and strategic allies, echoing how Russian meddling has served to fuel internal strife in Europe and the U.S.
Ip concludes that multilateral action “requires Mr. Trump to understand where leverage comes from.” No matter how much Gorka bloviates, he can’t make the case that Trump knows what he’s doing here. Gorka’s defense of Trump’s tariff play is in keeping with the dumbass economics that we are witnessing this week.