After the last few days one would think there would be a lot more alarm bells going off in national media, but I guess I shouldn’t be surprised. Peter Baker at the New York Times:
In the space of a few hours, he declared that his own central bank chief was an “enemy,” claimed sweeping powers not explicitly envisioned by the Constitution to “order” American businesses to leave China and, when stock markets predictably tumbled, made a joke of it.
Mr. Trump’s wild and unscripted pronouncements on Friday renewed questions about his stewardship of the world’s largest economy even as he escalated a trade war with China before heading to France for a high-profile summit with the leaders of many of the world’s other major industrial powers.
“Renewed questions” about his stewardship of the ecocnomy? Renewed questions? Your bleeping hair should be on fire, you dweeb.
The best analysis of the past couple of days I’ve seen so far comes from Josh Barro, a one-time Republican who still calls himself a neoliberal. But putting that aside, “This Is How Trump Will Tank the Economy and His Presidency” sounds about right to me.
If he wanted less China-related economic drag, he could back off the tariff threats. And indeed, he did a little of that a couple of weeks ago, delaying some of the new tariffs he announced for September 1 so they won’t take effect until December 15. His administration said this delay was for national security reasons, though he said himself it was because he didn’t want to interfere with the Christmas shopping season.
But the Chinese appear to have read the delay as a sign of weakness. This week they announced more tariffs, infuriating the president. Since backing off didn’t work, he decided to escalate today. And that’s what’s so nerve-racking for the markets: His trade policy no longer appears to be self-limiting. In fact, it could be self-reinforcing, where tariffs cause damage and the president tries to “fix” the damage with more tariffs. …
…With a China less willing to back down and a trade war maybe too far along to stop, the president is backed into a corner. He may feel he can’t save the economy by folding. And so he may follow his instinct — one of the few consistent policy views he has expressed for decades — that protectionism is good for the economy, and that despite what the markets and his advisers are telling him, trade wars are good and easy to win and more tariffs and more disruption will only mean more winning for the U.S.
What the president showed us today is he’s prepared to hit the gas as he approaches the cliff.
I don’t see any way that won’t happen as long as Trump is in the White House. Near term, the money people may still keep the stock market, and Trump, propped up, but we’ll see what happens with the markets on Monday.
Trump keeps demanding that the Fed drop interest rates to goose the economy he’s killing with his tariffs. Whether dropping interest rates would do as much for the economy as Trump thinks is questionable. But see also Trump’s company could save millions if interest rates fall as he demands.
Another thing that irritates the hell out of me is that the teevee bobbleheads keep saying that of course a president has the power to enact any tariffs he wants to, without congressional approval. Except he doesn’t, or at least he’s not supposed to. The Constitution plainly gives Congress and only Congress the power to levy tariffs in Article I, Section 8, first paragraph, where it says “The Congress shall have 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; but all Duties, Imposts and Excises shall be uniform throughout the United States.” In 18th century language tariffs come under “duties” and “imposts.”
At article published at Vox last year explained how Congress has been ceding trade regulation powers to Congress for decades through a number of bills that give presidents tariff powers under particular circumstances that can be stretched to fit just about any occasion. Trump shows us why that was a bad idea. But today he specifically mentioned one instrument of that congressional power shift —
For all of the Fake News Reporters that don’t have a clue as to what the law is relative to Presidential powers, China, etc., try looking at the Emergency Economic Powers Act of 1977. Case closed!
— Donald J. Trump (@realDonaldTrump) August 24, 2019
The full title of the bill is International Emergency Economic Powers Act of 1977, known as IEEPA for short. Trump seems to think this bill gives him complete control over how American businesses work with China. Per Anya van Wagtendonk at Vox: Um, no.
The Economic Powers Act allows the president of the United States to regulate commerce during a national emergency. It does not allow a president to order companies to close their factories in foreign countries, however. And as there has not yet been a national emergency declared with respect to Chinese trade, Trump’s present abilities to govern economic interactions with China are limited to measures like tariffs.
Even Wagtendonk surrenders extraconstitutional tariff powers to Trump. IMO if we ever again have a Democrat in the White House and a Democratic majority in both houses of Congress, there needs to be a great taking back of a lot of these surrendered powers, including war powers. See also this “primer” on IEEPA at Lawfare that is fairly terrifying, since it describes what a president could do under IEEPA.
And see also Trump ‘hereby’ orders U.S. business out of China. Can he do that? at WaPo. The answer is, yes and no. Trump really could do a lot of things presidents haven’t done before that could do a lot of damage, and at this point it’s clear there is nobody keeping him in check. Congress could do it, if it acted, but Mitch McConnell won’t allow that.
But the Chinese can read poll numbers and can see that Trump could be a one-term president, meaning it’s likely he’s got 17 months before he’s out. The Chinese do tend to take the long view of things. I would be enormously surprised if they blink.