When will even critics admit that President Trump’s trade strategy is working? The EU deal is another example. And there’s no world trade war, no tariff retaliations. As usual, the so-called experts are wrong.
In fact, his bilateral approach is remaking the world trading system that has been broken for the past three or four decades. The WTO couldn’t create a fair and balanced trading system. Other multilateral globalist institutions couldn’t do it, but Mr. Trump is doing it single-handedly. And he’s doing it in a way that is in the main, reducing tariff and non-tariff barriers around the world. It is surely opening up markets to U.S. businesses on the farm or in the factory. EU, UK, Vietnam, Japan, Philippines, Indonesia, and much more to come.
China negotiations started today amid reports that they will extend the August 12 deadline by another 90 days to allow for more time for negotiations. For most of these deals, Mr. Trump is charging a template of a modest 15% toll. A very small price to pay for participating in the most vibrant economy in the world with the strongest consumer interest. And that modest price that could yield something like $400 billion per year in tariff-related revenues to cut taxes, or lower the deficit, or even eliminate debt.
Former general counsel to u.s. trade representative Stephen Vaughn discusses the 30% tariffs Trump announced on Mexico and the EU and more on ‘Kudlow.’
But here’s another important point: the deflationary impact of a mild tariff will be vastly overwhelmed by the $5 or $6 trillion of direct investment pledged by foreign countries and investors coming into the U.S. economy. That point is being overlooked. It’s a massive infusion of cash to the U.S. that will offset any tax deflation.
Wall Street and the Fed were always wrong about inflation because the money supply has been quiet for the last couple of years. People on the left and even some on the right have gone hysterical over tariffs. But they never understood that President Trump is the dealmaker in chief.
He knows when to thrust and when to parry. And he also knows that America must come first.
