According to press reports, the Biden administration is on the verge of announcing a quadrupling of the customs tariff (a tax on American importers) on EVs made in China. He may also announce other Trumpian tariffs (“Biden to Quadruple Tariffs on Chinese EVs,” Wall Street Journal, May 10, 2024). That would not be surprising.
In a Regulation feature two years ago, I predicted that Biden would be Trump 2.0 (“Joe Biden’s Economic Agenda: An Early Appraisal,” Spring 2021). I wrote:
In general, the basis of Biden’s economic approach seems to be the belief (which was largely shared by Trump) that voluntary exchange among free individuals cannot be counted on to ensure economic prosperity and individual flourishing. This is perhaps most obvious in international trade, where Biden is likely to continue Trump’s policies. The one difference is that the benefits will go to a different corner of the Washington swamp: trade unions instead of inefficient American companies. But it is all one big swamp. Trump had Peter Navarro to oversee his protectionist agenda, and Biden has an entourage of Navarro imitators to oversee his. Apparently, Biden and his entourage have no more understanding than Trump did that economic efficiency is defined in terms of consumer satisfaction, not producer privilege.
… Like Trump, Biden does not believe in free trade but in “fair trade” as he (and his union‐boss supporters) defines it. He promises to “stand up for America.” Protectionism is the area where Biden is most likely to be Trump 2.0.
If he goes ahead with his reported protectionist plans, Trump 2.0 would be, in this area, more Trumpian than Trump 1.0. As I argued in a recent post, protection against environmental goodies is especially farcical: see “The Farce of Clean Energy Dumping,” Econlog, April 1, 2024. But it is no more economically absurd and dangerous than Trump’s nationalism.
Underlying all this are phenomena that the economics of politics has accustomed economists to see: the politicians’ power greed before organized interests and the logic of interventionism begetting interventionism. In this morning’s Wall Street Journal, Holman Jenkins encapsulates one aspect of the logic of politics (“Whose Trade War Is Worse, Trump’s or Biden’s?“):
Mr. Biden shows every sign of wanting to start a global trade war to protect the high-cost, uncompetitive green-energy industry he’s been building at home with taxpayer dollars.
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I am using for the present post the same featured image (reproduced below) that appeared in the previous one, “The Farce of Clean Energy Dumping.” As I explained there, my idea for DALL-E was that Chinese solar panels and EVs were falling from the sky like manna, and Commerce Department agents were trying to shoot the goodies and prevent people from collecting them. To get DALL-E’s half-cooperation, I had to explain that the guns of Commerce Department agents shoot roses.
Commerce Department agents stop Americans from harvesting green manna from China (DALL-E)
