Donald Trump has taught the world that tariffs are useless

{"text":[[{"start":6.44,"text":"There’s nothing like an awful experience to concentrate the mind, and Donald Trump has provided policymakers the world over with a corker in the form of his truly horrendous experiment with tariffs."}],[{"start":18.26,"text":"As I wrote last week, to suggest the Republicans’ savaging in the midterm elections was a complete repudiation of his tariff campaign is an overstatement. Certainly they weren’t popular, and the Democrats hammered hard on the issue, but the unpopularity of the duties and of Trump ran both ways."}],[{"start":35.72,"text":"Still, it’s quite remarkable that even in rust-belt Michigan, protectionism proved a liability rather than an asset. The Democratic senator-elect Abdul El-Sayed is in favour of tariffs, obviously — it goes with the territory — but it was quite a moment when his Republican opponent Mike Rogers was forced to break with Trump and call for import duties on Canadian goods to be lifted."}],[{"start":57.94,"text":"Even if the Democrats haven’t exactly been converted to free-traders, they can spot an issue where Trump is vulnerable and carry it through into the new Congress. Ted Lieu, vice-chair of the House Democratic caucus, on Wednesday promised a bill “to stop the stupid Trump tariffs jacking up prices on Americans”."}],[{"start":75.32,"text":"Obviously Trump won’t be put off tariffs: he’s been obsessed with them since the 1980s for a reason no one’s quite sure of. And without a veto-proof majority, most of the new Congress’s actions will fall into the category of harrying rather than blocking. But if anything it probably benefits the Democrats (and the cause of free trade itself) if some tariffs stay to continue acting as a lightning conductor for public discontent over high prices, given it’s a conductor to which Trump is irretrievably attached."}],[{"start":104.04,"text":"Internationally, the idea that his tariffs would set off a global retaliatory escalation — or spawn a host of envious imitators — has comprehensively been squashed. The spiral came to an abrupt halt a year ago when China forced Trump to back down by threatening to limit US access to rare earths in retaliation. As for proving their economic worth, tariffs have achieved almost none of the (contradictory) goals Trump set for them, an outcome of no surprise to economists of either the trade or macro variety."}],[{"start":133.28,"text":"Tariffs haven’t closed the trade deficit; they haven’t led to a manufacturing renaissance; they haven’t forced Canada to become the 51st state, or Greenland a US territory. Via coercive gunboat deals they have got some trading partners to sign up to various actions on import duties and promises of investing in the US and buying American exports. But even assuming those promises are fulfilled, none are likely to be economically transformative for the US. Tariffs have raised government revenue, but the Supreme Court’s overturning of his IEEPA international emergency duties showed how precarious that was. Trump had to rush to replace them with other import taxes to prevent that income from draining away."}],[{"start":177.96,"text":"Polling by Ipsos for the Saudi Arabia-based FII Institute foundation shows the lesson is being learnt across the world. The US has given its body to science. Public support for high global tariffs among American respondents dropped sharply from 49 per cent in 2025 to 37 per cent in 2026. It also fell among voters in countries like Brazil that have been a focus of Trump’s coercion, and even slid slightly in China, which has certainly come out better from the trade war than the US."}],[{"start":null,"text":"

"}],[{"start":210.12,"text":"The course for those countries with a gunboat deal in place should be clear: slow-walk those pledges and hope Trump loses interest, or that Congress manages to deter him from further destructive confrontation. Japan, for example, promised a frankly improbable $550bn of investment in the US. As of September, Japanese companies had come up with concrete plans for less than a fifth of that."}],[{"start":234.84,"text":"Trump’s misadventures show not just that tariffs are generally a bad idea in principle but also frequently ineffective or counter-productive in execution. His duties were often postponed or weakened after financial markets panicked or US companies lobbied for exceptions. The EU has discovered the limitations of even a much subtler attempt to use tariffs. Its campaign to manage the inflow of Chinese electric vehicles with carefully calibrated anti-subsidy duties is widely perceived to have failed."}],[{"start":264.88,"text":"Trump’s experiment with broad-based increases in tariffs has been painful, but nothing like as expensive as it could have been. It’s been more like Richard Nixon in the 1970s, though without his pivot back towards open trade that followed the initial rash of tariffs, than Herbert Hoover in the 1930s. The world is neither politically nor economically the way Trump believed, and it’s some comfort that we’ve all seen a convincing demonstration of that lesson without too much harm done."}],[{"start":297.56,"text":""}]],"url":"https://audio.ftcn.net.cn/album/a_1794017829_1864.mp3"}