In the end, it was not the ceaseless lying, the Muslim ban, the alleged obstruction of justice, the pandering to white supremacists, the demonization of immigrants, or the climate change denialism that most outraged Donald Trump’s party. The norm-shattering president finally became too much for Republican politicians when he threatened to do something else entirely – impose tariffs on Mexican imports.
On Tuesday, Republican senators emerged enraged from a meeting with Trump, unwilling to stomach his threat to level tariffs as high as 25% on Mexican goods in retaliation for migrants crossing the border. Even Senator Ted Cruz, the former Trump punching-bag (“Lyin’ Ted”) who has since become a reliable Trump ally, railed against the proposed tariffs, calling them “new taxes” on Texas farmers, manufacturers and small businesses. Otherwise spineless Republican senators are having this change of heart because of an important political reality: tariffs will make goods more expensive in the states they need to capture in 2020.
Like Texas, Michigan would be hit hard by a trade war. Thanks to the automobile industry’s complex supply chains, it is the state most dependent on imports from Mexico – and, as Republicans know all too well, crucial to Trump’s re-election prospects. He is already running 12 points behind Joe Biden and Bernie Sanders there, according to one recent poll.
Trump’s ongoing trade war with China has cost him political capital throughout the midwest, where farmers depend on imports and exports. His approval rating in Iowa has dropped a staggering 21 points since he took office. In Wisconsin, he’s lost 19 points, and in Ohio, 18. Trump’s base alone cannot carry him, especially with so many Democrats motivated to drive him out of office.
US President Donald Trump Trump has often repeated that China pays for US tariffs on its goods. 'We have billions of dollars coming into our treasury from China. We never had 10 cents coming into our treasury; now we have billions coming in' he said on 24 January 2019. On 5 May he tweeted: 'For 10 months, China has been paying Tariffs to the USA.'
But that is not how tariffs work.
China's government and companies in China do not pay tariffs directly. Tariffs are a tax on imports. They are paid by US-registered firms to US customs for the goods they import into the United States. Importers often pass the costs of tariffs on to customers - manufacturers and consumers in the United States - by raising their prices.
Chinese suppliers do shoulder some of the cost of US tariffs in indirect ways. Exporters sometimes, for instance, are forced to offer US importers a discount to help defray the costs of higher US duties. Chinese companies might also lose business if US importers find another tariff-free source of the same goods outside China.
White House economic adviser Larry Kudlow has acknowledged that 'both sides will suffer on this' contradicting the president.
This is the only kind of math Republican lawmakers understand, because it speaks to their survival. The most ravenous Republicans will never desert Trump, and his approval rating among party regulars remains strong, but his 2016 success hinged on razor-thin margins in a handful of midwestern states. There is no path to victory without them. Conservatives beyond the cult of Trump comprehend this – that their dear leader is not infallible, that his 30-year obsession with combating trade deficits could be his undoing.
Trump, more through instinct than any kind of sober economic analysis, has long understood that the free-trade agreements of the 1990s hastened globalization, punished the American worker, and allowed jobs to flee elsewhere. He violated the GOP’s orthodoxy on free trade and still commandingly won a primary. He knew tacking left on trade wasn’t going to cost him votes.
But Trump’s hatred of a globalized world that would cheapen the value of labor is not tied up in any defense of the American worker. If it were, he would embrace strong labor unions, consumer protections, universal healthcare and cheap housing for America’s precarious working class. He rejects actual uplift in favor of lashing out at allies and trading partners around the globe, a jingoistic braying with no true endgame. He says his Mexican tariffs will begin on Monday. And then what?
If Trump doesn’t get the immigration concessions from Mexico that he wants, and overrides Republican opposition to impose tariffs starting at 5% on imports, how far will Republicans in Congress go to oppose him?
So far, they have been the most pliant class of lawmakers in recent history, tolerating his rank incompetence in the hope he implements enough of the conservative agenda to set Democrats back a generation. Denying science or catering to white supremacists was not enough to foment any kind of rebellion among Republicans in Congress – they, too, reject the reality of climate change and refuse to ostracize the most hateful elements of their base – but tariffs could do the trick, if only because they pose an electoral challenge for Trump 2020.
There is no Trump economic policy or Trump government as much as the man himself, executing ill-informed policy on instinct. Dissenting voices have been excised. How far Trump goes with his tariffs will be up to Trump. If Trump is defeated next year, it will be because of Trump – his motives, his decisions, his rage. It’s Trump’s trade war. We’re just the casualties.
• Ross Barkan is a writer and journalist in New York City
