Alan Zendell, April 09, 2025

Today’s big news was that Trump backed down from his bullying bluff on tariffs. His supporters will spin the whole debacle as a brilliant negotiating tactic, but don’t be fooled. He backed down because our major trading partners, particularly China, made it clear that weren’t going to. Their reaction was believable because they had more invested in the game than Trump. Trump’s tariffs could have done irreparable damage to some of them, but Trump was simply playing a narcissistic game.

If you want to understand why Trump backed down, ignore the hype and really look at the issues. There’s some truth on both sides of the tariff argument, although leading economists from every major trading nation were nearly unanimous in condemning the heavy-handed bullying approach taken by Trump and his trade advisor, Peter Navarro, a no-compromise, toxic hard-liner who was one of Trump’s strongest defenders after the January 6^th insurrection. His loyalty to Trump played out in court, where he refused to answer questions and did jail time for contempt.

Trump’s pet billionaire, Elon Musk, seemed to be giving cover to other Republican billionaires who supported Trump but were shocked and nervous about the magnitude of his tariffs, more so, at the belligerent way Trump treated our allies. Musk and Trump strongly disagree over trade and globalization. Open global trade made Musk the “richest man in the world,” and he wasn’t likely to bend to Trump.

Musk tried unsuccessfully to change Trump’s mind, but Navarro held sway over the president’s tariff policy. Musk, who seems immune to either criticism or public outrage, tweeted that Navarro “is truly a moron.” We can’t know what was said behind closed doors, but Musk’s opposition made Republican donors and House members holding seats in competitive districts feel safe breaking with Trump. Never underestimate the craven self-interest of an incumbent office-holder.

We disregard our tariff history at our peril. Trump claims the  whole world is ripping us off, but that’s a gross distortion of reality, like a parent telling their children that when they turn eighteen they’re on their own, and any child who expects to continue living under their roof has to pay their fair share. Like the tariff argument, that point of view has some merit, but it’s not reasonable to expect a kid graduating (or not) from high school to instantly transition from dependent to self-supporting adult.

After World War 2, our European Allies were devastated. They struggled to feed their people and their cities needed to be rebuilt. Americans were all on board when President Truman endorsed the Marshall Plan and the creation of the NATO alliance. We felt proud and virtuous taking on the role of savior. And our allies didn’t forget. For decades, America was revered all over the Free World.

It’s also true that our generosity was very much in our self interest. A strong Europe was good for everyone. What Trump calls a rip-off started as an incredible outflowing of good will to shore up our allies. The Soviet Union and China were powerful nations bent on expanding both their territory and their economies. In the 1960s, American economists and politicians believed that expanded trade and using tariffs as a necessity only in targeted situations, was the best way to both enrich everyone and avert nuclear war. The theory was that the more countries’ economic futures become inextricably tied together, the less incentive they have to destroy each other. That may well be why we’re all still alive.

The loss of our industrial base to China and other developing nations was an entirely different situation. The serpent in this story is Greed, and the apple is the promise of higher corporate profits. When Adam accepted the apple, he did so knowing he might bring the wrath of God down on his descendants, but human nature being what it is, our leaders went for the low-hanging fruit, pretending there would be no consequences. Cheap, virtually slave labor in China meant more goodies for us and huge profits for corporate stockholders.

We all sat idly watching our manufacturing capacity wither and die. We did it to ourselves. China repeatedly took advantage of our trade agreements and violated international norms on intellectual property, but Trump’s attempt to make China the villain ignores our own complicity.

I support ending our dependence on Chinese factories. I avoid buying anything made in China, and I support putting a tax on American companies that manufacture their products in China. Our history with tariffs proved that they simply don’t work when used as a blunt force economic weapon.

The stock markets’ sharp declines reflected investors’ beliefs that Trump and Xi Jinping are two leaders who will never back down unless they are compelled to, which risks plunging the world into a Depression and greatly increases the risk of nuclear war. Once that was clear, Trump had to back off to avoid a revolt within his own party.