During his first term as president, Donald Trump was frustrated by the government.
When Trump wanted to do things — he was, after all, the president! — he couldn’t. Congress got in the way. Or the courts got in the way. Or the deep state.
Trump wanted to be an unencumbered president, but the Constitution restrained him.
Trump is much smarter now. He’s figured out how to be king.
Previous presidents typically used tariffs sparingly as a way to regulate trade. Trump has now realized that tariffs are a way to regulate essentially anything — without the rest of government getting in the way.
Presidents have broad discretion to dictate tariff rates and the goods and countries to which tariffs should apply. Previous presidents viewed tariffs as a tool of international trade. Trump has thrown off that restraint; he views tariffs as a tool with which to bludgeon any country that won’t do the president’s bidding.
Given the United States’ economic strength, other countries have essentially no choice but to do as Trump commands.
Colombia, for example, refused to accept certain American flights transporting immigrants who were being deported.
What would be a good mechanism to coerce Colombia to do what Trump wanted? Tariffs!
Trump threatened to impose a 25% tariff; Colombia agreed to accept the immigrants.
Trump thinks Canada and Mexico should do more to police their borders with the United States and should keep fentanyl from entering the country. If Canada and Mexico won’t do Trump’s bidding, what’s the answer?
Tariffs! Congress can’t (or won’t) interfere; the courts can’t interfere; the deep state can’t interfere.
Canada and Mexico can be bludgeoned into submission by Trump acting unilaterally.
Trump wants to take the Panama Canal back from Panama.
If Panama won’t cooperate, what do you suppose the solution might be?
Tariffs! Instant coercion.
Trump would like Greenland to become part of the United States. If Greenland and Denmark refuse to cooperate, there’s an easy solution: Tariffs! Coerced by the threat (or reality) of punishing tariffs, it’s remarkable how quickly other countries become cooperative.
Why should Trump stop there?
Suppose Trump would like other countries to buy more American goods. If the countries refuse, threaten tariffs! They’ll cooperate.
Suppose the United States would like to station troops on another country’s land. If the country refuses, threaten tariffs! Instant cooperation.
I’m not sure that even Trump would have the nerve to do this, but suppose a country wouldn’t allow Trump to develop a hotel that he wanted to build. How could that country be coerced into cooperating?
Tariffs! Why not? This would look (and smell) pretty bad, but it would surely do the trick.
Tariffs are the solution to everything.
This is, of course, a dangerous game to play.
First, this is guaranteed to hurt American exports. Any country will now have to be insane to trade with the United States in a way that makes the country dependent on American goodwill. The world now knows that the United States will take advantage of its trade position to coerce other countries to do its bidding. The lesson is clear: Don’t rely on the U.S.; diversify your trading partners.
Second, countries, like individuals, do not take kindly to being bullied. A 98-pound weakling will accept bullying when there’s no choice, but the victim may ultimately stand up to the bully.
Countries can, for example, act collectively. Perhaps Colombia, by itself, can’t stand up to the United States, but Latin America as a whole has more power. The region could collectively impose retaliatory tariffs on the United States. The United States would feel that pain.
So, too, for Europe. The United States may be able to bludgeon Denmark alone, but the calculus would be different if all of Europe chose to retaliate against Trump’s bullying.
Or, if collective action is not possible (or desirable), countries could change their trading partners to do business with countries that the United States fears (or is currently trying to punish). Colombia now trades with the United States. But if the United States is a bully, then China would surely be delighted to trade with Colombia on more reasonable terms.
Bullying folks might work in the short term, but it’s unlikely to work in the long term.
Now that Trump has figured out how to be king, he will surely throw his weight around. But, to the country’s detriment, bullying may ultimately be exposed for what it is.
Mark Herrmann spent 17 years as a partner at a leading international law firm and later oversaw litigation, compliance and employment matters at a large international company. He is the author of The Curmudgeon’s Guide to Practicing Law and Drug and Device Product Liability Litigation Strategy (affiliate links). You can reach him by email at inhouse@abovethelaw.com.
The post Having A King May Not Be Best For America appeared first on Above the Law.
During his first term as president, Donald Trump was frustrated by the government.
When Trump wanted to do things — he was, after all, the president! — he couldn’t. Congress got in the way. Or the courts got in the way. Or the deep state.
Trump wanted to be an unencumbered president, but the Constitution restrained him.
Trump is much smarter now. He’s figured out how to be king.
Previous presidents typically used tariffs sparingly as a way to regulate trade. Trump has now realized that tariffs are a way to regulate essentially anything — without the rest of government getting in the way.
Presidents have broad discretion to dictate tariff rates and the goods and countries to which tariffs should apply. Previous presidents viewed tariffs as a tool of international trade. Trump has thrown off that restraint; he views tariffs as a tool with which to bludgeon any country that won’t do the president’s bidding.
Given the United States’ economic strength, other countries have essentially no choice but to do as Trump commands.
Colombia, for example, refused to accept certain American flights transporting immigrants who were being deported.
What would be a good mechanism to coerce Colombia to do what Trump wanted? Tariffs!
Trump threatened to impose a 25% tariff; Colombia agreed to accept the immigrants.
Trump thinks Canada and Mexico should do more to police their borders with the United States and should keep fentanyl from entering the country. If Canada and Mexico won’t do Trump’s bidding, what’s the answer?
Tariffs! Congress can’t (or won’t) interfere; the courts can’t interfere; the deep state can’t interfere.
Canada and Mexico can be bludgeoned into submission by Trump acting unilaterally.
Trump wants to take the Panama Canal back from Panama.
If Panama won’t cooperate, what do you suppose the solution might be?
Tariffs! Instant coercion.
Trump would like Greenland to become part of the United States. If Greenland and Denmark refuse to cooperate, there’s an easy solution: Tariffs! Coerced by the threat (or reality) of punishing tariffs, it’s remarkable how quickly other countries become cooperative.
Why should Trump stop there?
Suppose Trump would like other countries to buy more American goods. If the countries refuse, threaten tariffs! They’ll cooperate.
Suppose the United States would like to station troops on another country’s land. If the country refuses, threaten tariffs! Instant cooperation.
I’m not sure that even Trump would have the nerve to do this, but suppose a country wouldn’t allow Trump to develop a hotel that he wanted to build. How could that country be coerced into cooperating?
Tariffs! Why not? This would look (and smell) pretty bad, but it would surely do the trick.
Tariffs are the solution to everything.
This is, of course, a dangerous game to play.
First, this is guaranteed to hurt American exports. Any country will now have to be insane to trade with the United States in a way that makes the country dependent on American goodwill. The world now knows that the United States will take advantage of its trade position to coerce other countries to do its bidding. The lesson is clear: Don’t rely on the U.S.; diversify your trading partners.
Second, countries, like individuals, do not take kindly to being bullied. A 98-pound weakling will accept bullying when there’s no choice, but the victim may ultimately stand up to the bully.
Countries can, for example, act collectively. Perhaps Colombia, by itself, can’t stand up to the United States, but Latin America as a whole has more power. The region could collectively impose retaliatory tariffs on the United States. The United States would feel that pain.
So, too, for Europe. The United States may be able to bludgeon Denmark alone, but the calculus would be different if all of Europe chose to retaliate against Trump’s bullying.
Or, if collective action is not possible (or desirable), countries could change their trading partners to do business with countries that the United States fears (or is currently trying to punish). Colombia now trades with the United States. But if the United States is a bully, then China would surely be delighted to trade with Colombia on more reasonable terms.
Bullying folks might work in the short term, but it’s unlikely to work in the long term.
Now that Trump has figured out how to be king, he will surely throw his weight around. But, to the country’s detriment, bullying may ultimately be exposed for what it is.
Mark Herrmann spent 17 years as a partner at a leading international law firm and later oversaw litigation, compliance and employment matters at a large international company. He is the author of The Curmudgeon’s Guide to Practicing Law and Drug and Device Product Liability Litigation Strategy (affiliate links). You can reach him by email at [email protected].
