Betting the Ranch: Trump's tariff war gamble

Trade wars should be regulated by Congress. So should raising taxes such as tariffs on farmers and consumers . 

Success may dilute the risks and gravity of leaving such degree of power out of the control of Congress (COTUS) , but for those who (correctly) criticized executive over-extension in the cases of Iraq war and Obamacare, this war without troops (for now) should be equally put under constitutional surveillance, since the Constitution is pretty clear: 

It’s in Congress’s power “to lay and collect taxes, duties, Imposts and Excises, to pay the Debts and provide for the common Defence and general Welfare of the United States,” and regulate trade between the US and other countries.

Over the years, and with the excuse of "war powers" and "national security", COTUS has turned this critical power to POTUS, with far-reaching, long-term consequences now in stark evidence. 

Would President Trump be able to start a trade war of this magnitude if he had to pass a law through Congress as the Constitution requires? 

One thing is for sure, even for those who oppose protectionism and correctly consider tariffs taxes on US consumers and companies (remember the GOP platform?): a trade war with China is a national security matter.

A trade war between US and China -which directly involves and affects EU and the rest of the world economy- has as much an impact -or perhaps even more- than a World War. If taken to the last consequences, it is a World War.

President Trump is betting the house in which 340+ million Americans live. Regardless of the fact that most of them didn't give him the popular vote, much less a mandate for a wide-range protectionist policy, they should be consulted through Congress as the US Constitution specifies.

This -not impeachment nor "Russian collusion" charges- is a constitutional crisis.

Protectionism goes against the very foundations of a country that was born out of a protest against tariffs, on the very year that Adam Smith published The Wealth of Nations and on the very principles of free trade and free markets that Smith proposed in 1776.

In a turn that reflects a significant change in the historical positions of the Republican Party,  a RINO president is embracing a long-held Democratic and Trade Union position, one that Bernie Sanders and the farthest Left of US's political spectrum would (and will) enthusiastically endorsed.

Precedent is a poor consolation, but it happened before: the Smoot-Hawley Act of 1930 -which arguably sank US back into the Great Depression- was launched by two Republican senators. 

So President Trump is not without party precedents nor company on this gamble.

Chances are that this will be -as Trump's sales argument goes- a tactical movement that will bring China into the fold of law-abiding nations and serious trade agreements and negotiations. History tells otherwise, both about China's WTO track record and the impacts (short and long-term) of tariffs. The graph below shows how low-tariffs after 1950 ushered a long, uninterrupted era of almost 90 years of US growth:

The current situation is no other thing -as Peter Navarro and Robert Lighthizer (the contemporary equivalents of Republican Senator Reed Smoot and Republican Representative Willis C. Hawley) disingenuously pretend- than the first salvo of a long and protracted protectionist era, which will exacerbate nationalist parties and rise social and ethnic tensions, not to mention plunge good part of the world -Europe, Asia, Latin America- into recession.

Note as an important point that Reed Smooth and Willis C. Hawley were elected members of US Congress, and Mr. Navarro and Mr. Lighhizer are not.

US Congress (COTUS) has abdicated its constitutional responsibilities.

"America First" is not a strategy, but a slogan. It's not even a new slogan. It used to be written in union's symbols. Of course, it doesn't take a rocket scientist to figure out that "China first", "Europe First" and "(whomever else) First" will follow. 

In a zero-sum game there is a winner and many losers. Over time, as in the classical Prisoner's Dilemma, there is a net loss for everyone, since the only "winning" strategy is  not to "win" deals but to accept moderate losses and win by growing the shared market. 

That is the only way to break away from "zero-sum" growth strategies and turn toward non-zero-sum , or "win-win" strategies that actually have grown the global economy during the past 30 years of globalization.

This is not an argument, but a proven truth that every student of 101 economics know.

But, as George Orwell famously said: "truth is the first victim of war".

I set this article for the record, hoping with Churchill, that "Americans will do the right thing after they have tried everything else."