Trump Doubles Down on Trade War

The fact that America's allies, much of his administration, much of the Republican Party, and nearly every economist on the planet has lined up in opposition to Donald Trump's plan to slap a big tariff on steel and aluminum is not deterring the President whatsoever. In fact, in his usual Saturday morning tweet storm, he aggressively returned serve:

The United States has an $800 Billion Dollar Yearly Trade Deficit because of our “very stupid” trade deals and policies. Our jobs and wealth are being given to other countries that have taken advantage of us for years. They laugh at what fools our leaders have been. No more!

— Donald J. Trump (@realDonaldTrump) March 3, 2018

If the E.U. wants to further increase their already massive tariffs and barriers on U.S. companies doing business there, we will simply apply a Tax on their Cars which freely pour into the U.S. They make it impossible for our cars (and more) to sell there. Big trade imbalance!

— Donald J. Trump (@realDonaldTrump) March 3, 2018

Secretary of Commerce Wilbur Ross has already made the television rounds to peddle the notion that Trump's actions won't actually hurt the American consumer...that much. He observed, for example, that the steel tariff would only increase the cost of a car by about $175, which he called "trivial." That might be a fair point, but for the fact that he's a member of the same GOP that just tried to explain to us all how a $1.50/week tax cut is life-changing money.

In any event, with most presidents it is possible to understand where their policies are coming from, even if we find those policies to be disagreeable. Trump is so mercurial, and so inconsistent, that we are invariably left to hazard our best guesses as to what is driving his actions. So, here are some theories as to what might be going on here:

• It's Been a Bad Week: Trump has had so many bad weeks in his first year that it's getting a little cliched to say, "this was the President's worst week ever." Nonetheless, if this wasn't the worst one, it was certainly close. One of his two or three closest confidants, Hope Hicks, got grilled by Congress and then quit her job. Ivanka is now being investigated. Jared Kushner sank deeper into the muck. HUD Secretary Ben Carson embarrassed the administration by trying to spend $30K on a dining room set until he got caught. Attorney General Jeff Sessions, NSA Herbert McMaster, and Chief of Staff John Kelly are all, to a greater or lesser extent, in an open state of rebellion because they know Trump won't fire them. The gun issue just keeps getting messier and messier, Fox News has begun criticizing The Donald, and the stock market took a nose dive. It is well established by now that when Trump is really smarting, he lashes out, like a wounded animal. And his favorite targets are, in no particular order, Hillary Clinton, China, Barack Obama, the "fake news," Kim Jong-Un, Muslims, and undocumented immigrants/MS-13. On some level, the only thing that happened this week was that China's turn in the rotation came up, since the tariffs are clearly aimed at Chinese steel dumping.
  
  
• Look Over There: In a related point, Trump is very good at distracting the media and the public from more substantive issues by tweeting/complaining about something he thinks is less damaging. His first tweet on the tariffs came within minutes of another tweet slamming Alec Baldwin for his portrayal of the President on "Saturday Night Live." Nobody bit on the Baldwin complaint, which has gotten pretty stale, so maybe Trump just ran with the tariffs. In other words, perhaps he floated two trial balloons, and then latched onto the one that stayed afloat.
  
  
• The Bug in Trump's Ear: It has also become clear that Trump not only plays favorites with a rotating cast of underlings, but that he listens very carefully to whichever favorite has gotten in his ear most recently. By all indications, the administration's free traders—National Economic Council leader Gary Cohn, Secretary of the Treasury Steve Mnuchin, Secretary of State Rex Tillerson, McMaster, and Kelly—are on the outs with Trump right now or are not, at very least, a part of the inner circle. The trade hawks—Ross and economic adviser Peter Navarro—are currently in favor. Perhaps those two have just carpe'd the diem while the opportunity was there.
  
  
• The Size of His Hands: The Washington Post's Paul Waldman argues that Trump, as a real estate tycoon to the core, sees trade as a zero-sum game. In his world, the more money you lease an apartment for, or sell a condo for, the less money the other party has. And if you sell at a price higher than what the market might suggest, you're a manly winner, while if you sell at a price lower than what the market might suggest, you're a sad loser. The point is that he fails to grasp that trade deals are not real estate. They can be, and generally are, win-win, and that both sides end up richer for making them. And having (incorrectly) concluded that trade deals are a "survival of the fittest" sort of win-lose proposition, he sees the United States' trade imbalances as a sign of weakness and unmanliness for both the country and himself. Put another way, the tariffs may be a way for Trump to announce to the world that he has a really big...pair of hands.
  
  
• The Bull in the China Shop: It is absolutely the case that China really is dumping its steel onto the world market at anti-competitive rates, with an eye toward manipulating the market. It is also the case that tariffs can be a useful tool, when deployed judiciously and in a highly-targeted fashion. Both the EU and the Obama administration, for example, imposed very high tariffs on certain very specific steel products made in China (and a few other countries). However, we know very well that Trump does not listen carefully to details, and that he likes big, dramatic gestures. It's possible that someone presented a reasonable and responsible policy proposal to The Donald, and he transformed it into this blanket tariff on everyone. The problem is that a non-specific tariff on steel will not hurt China nearly as much as it will hurt the three biggest foreign producers of steel for the United States: Canada, Brazil, and South Korea. That is to say, the tariff will weigh heavily on two of the United States' closest allies.
  
  
• PA-18: In a week and a half, there is going to be an election to replace Tim Murphy, who represented PA-18 in the House of Representatives until he had to resign in disgrace. That district has a Cook PVI of R+11, and has no business being competitive. Nonetheless, polls give Republican Rick Saccone only a slight lead over Democrat Conor Lamb, and Lamb is outraising Saccone by a margin of 5-to-1. If the GOP loses this one, not only will it be a huge embarrassment, but it will also put the Party into a panic heading into the midterms. So, the tariff talk may have been an effort to rally the overwhelmingly white, working-class district. It is certainly the case that Saccone latched on to the proposal so quickly you might have thought it was a pile of NRA money.
  
  
• The Spoils System: As we noted yesterday, Trump confidant Carl Icahn managed to profit $6 million by selling his stock in a steel-using company right before the President announced his tariff plans. It is also the case that we know little about Trump's personal holdings, and little about who else he might be talking to. It's certainly possible that this was a scheme to throw the markets into chaos, so that Trump & Co. could extract some profit before he "changes his mind." It could also be the case that Trump was not trying to personally enrich himself, per se, but that there was a quid pro quo along the lines of, "I'll make you some money, then you donate to the RNC/my campaign/my PAC." Trump definitely launched a fundraising blitz this week (more below). Maybe that is a coincidence, maybe not.

Again, all of these are just theories. Only Trump truly knows what is in the mind of Trump. Odds are good that at least one of these, and very possibly more than one, is correct, however. (Z)

Trump Begins Raising Funds for 2020

For a fellow who pooh-poohed the importance of money when his fundraising tally was hundreds of millions of dollars behind Hillary Clinton's, Donald Trump is certainly taking money seriously as he begins preparations for the 2020 election, having used this weekend to launch a massive fundraising operation. He gave a speech to megadonors at Mar-a-Lago on Saturday evening, and is building a network of "bundlers," who will shake down their friends and associates for small-to-medium donations, and will be rewarded with things like dinners with the President. Team Trump also sent out a massive e-mail blast.

Generally, starting a fundraising blitz on the heels of a drama-, embarrassment-, and scandal-filled week is not how it's done, but Trump plays by his own rules. There may be some wisdom in it, actually. For a man who likes to project strength, he actually spends a fair bit of time playing the victim, and making his base feel sorry for him. Whether it's the "fake news," or Obama "deep state," or the Robert Mueller "witch hunt," or any of a dozen other supposed injustices, real or imagined, Trump is very good at triggering his supporters' defensive/protective instincts. And that may very well get them to open their wallets.

The 32-question survey that Team Trump sent out to potential donors is of particular interest, as it is clearly meant to gauge which issues will really get their blood boiling in 2018 and 2020. Among the questions:

• Do you believe schools should be hardened to protect our children?
• Have excessive government regulations, rules, and red tape burdened you personally?
• Do you believe protecting the sanctity of life needs to be a bigger priority in 2018?
• Do you believe many universities indoctrinate rather than teach students?
• Do you trust the media?
• Do you feel that you cannot publicly admit that you support Trump?
• Are you concerned by the potential spread of Sharia Law?
• English is currently not recognized as the official language of the United States. Do you think it should be?
• Do you believe tariffs should be imposed to protect American industry from foreign competitors that are ripping us off?

One might describe a few of those questions, such as the last one, as just a tad bit leading. Anyhow, it would appear there's a good chance we're going to start hearing a lot more about making English the official language of the United States, Sharia law, and how university professors are evil brainwashers who should nonetheless be armed. (Z)

Trump Says He Will Dodge Russiagate

As things head downhill (yet again) at the White House, Donald Trump is digging in his heels on Russiagate. He is telling anyone and everyone who will listen that: (1) He's done nothing wrong; (2) Whatever happens to anyone else, he's not going to get into trouble; and (3) That the American people are beginning to accept his narrative that it was the Democrats who colluded with Russia, and not the Trump campaign.

Needless to say, these sentiments reflect a concerning blend of paranoia, ignorance, and delusion. He may very well believe some or all of this, in the same way he believes that he had a larger inaugural crowd than Barack Obama, or that he actually won the popular vote, or that he's actually worth $15 billion. However, even if he really didn't do anything in terms of colluding with Russia, he seems unable and/or unwilling to accept that he may well be responsible for the actions of his underlings, and that he is definitely at risk of getting hit with an obstruction of justice charge. Similarly, there is zero evidence to suggest that public sentiment on Russiagate is turning against the Democrats. In fact, given how often Trump feels the need to bring these things up, one wonders if he's not trying to convince his staff as much as he's desperately trying to convince himself. (Z)

This May Be Why Hope Hicks Quit

Speaking of Russiagate and Donald Trump, he's been told to stop speaking about the matter, except with members of his legal team. However, he's a motormouth who badly needs validation and who just can't control himself. So, he's in the habit of talking about the subject whenever he wants, in front of whomever happens to be present. To use his own counselors' words, he has repeatedly crossed a "bright red line," over and over, particularly as regards former staffer and confidante Hope Hicks.

The President either does not understand, or chooses to ignore, all of the problems that he creates with his loose lips (and it's not just sinking ships). First is that every non-lawyer he talks to becomes a potential witness and/or source for Robert Mueller, one who cannot hide behind lawyer-client privilege. So, Trump is harming himself with his lack of discretion. At the same time, he is also harming those he speaks to. These conversations inevitably translate into a need for (expensive) lawyers, and a greater likelihood of getting hauled before Congress and/or the special counsel. Further, depending on what Trump reveals, his staffers could well be put in the uncomfortable position of choosing between being disloyal to him and committing perjury.

In this context, the departure of someone as fiercely loyal as Hicks begins to make sense. Not only was she protecting herself by leaving, she was protecting Trump from himself. The day she spent before the House Intelligence Committee surely served to underscore that—while she fell back on executive privilege that day, she certainly knows that won't fly forever. She's not in the clear yet, of course, but at least by leaving she knows she won't learn anything else compromising. (Z)

Would-be Strongman Pays Respects to Actual Strongman

Generally speaking, a president should not joke about the possibility of being a dictator. It's like joking about having a bomb at the airport—even if the remark is meant in jest, it's never taken that way (especially once you get taken away). One might suggest that joking about being a dictator is particularly gauche for a president that has shown serious strongman tendencies, like trying to undermine the news media, attempting to disenfranchise opposition voters, calling for opponents to be thrown in prison, and trying to organize vast military parades.

Clearly, Donald Trump does not agree, as he was caught on tape this weekend speaking approvingly of China's President Xi Jinping's maneuvers designed to keep himself in power for the rest of his life. "He's now president for life. President for life. No, he's great," Trump said. "And look, he was able to do that. I think it's great. Maybe we'll have to give that a shot some day." Again, by all evidences, Trump was joking. Kind of. We hope. (Z)

Deficit May Be on Its Way to $2 Trillion

The nonpartisan Committee for a Responsible Federal Budget (CRFB) has crunched the numbers now that we know a bit more about the GOP tax bill and the Trump administration's budget, and they have reached some sobering conclusions. By next year, the deficit could hit $1.1 trillion, while it could hit $1.7 trillion within the next decade. And if Congress extends the tax cuts that are currently set to expire in seven years, a $2 trillion deficit is probable by 2028, along with a national debt in excess of $30 trillion.

These numbers are just estimates that the CRFB has put together as a stopgap until April 9. On that day, the Congressional Budget Office (CBO) is scheduled to release its analysis, which is more thorough, and uses more sophisticated projection techniques. Assuming that the CBO's report echoes that of the CFRB, or is even more pessimistic, then it will be very bad news for the GOP heading into the midterms. Every Republican who tries to brag about the tax cuts is going to get a response that involves the phrases "$1.1 trillion," "exploding national debt," and "almost entirely for the benefit of corporations and the ultra-rich," in some order. (Z)

Florida Bans AR-15s...for 15 Minutes

The Republican majority of the Florida legislature is in a tight spot these days. On one hand, there's enormous pressure on them to do something about guns in response to the Marjory Stoneman Douglas High School shootings, especially since Gov. Rick Scott (R-FL) is clearly planning to make a Senate run where one of his key planks will be moderate-level gun control. On the other hand, there are a lot of Second Amendment zealots in the Sunshine State, and Florida Republicans have been among the most eager accepters of NRA money. This laid the groundwork for the strange day the state senate had on Saturday, when they approved a ban on AR-15 guns by a voice vote. Then, at the urging of several Republican members of the chamber, they held a roll-call vote 15 minutes later and the measure was defeated by a vote of 21 to 17, with all 15 Democrats joined by two of the GOP colleagues in supporting the bill.

In view of this...confusion, there is going to be another vote held on Monday, when the Senate is back in regular session. Normally, when passing new laws, the standard is not "best two out of three," but these are the times we live in. Three Republican votes would have to flip in order for the measure to pass, which seems improbable, but who knows? (Z)

Man Commits Suicide Outside of White House

Saturday morning, a man approached the White House, waved a gun around, fired a few shots, and then shot himself in the head. He was pronounced dead at a nearby hospital shortly thereafter. Thus far, nothing is (publicly) known about the shooter or his motivations. The Trumps were not present for the shooting, as they were at Mar-a-Lago, as is generally the case during winter weekends. They will return to the White House, as scheduled, later today. (Z)

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---The Votemaster and Zenger