Heres whats really driving Donald Trumps tariff threats

Hysteria erupted over President Donald Trump’s threats to level trade tariffs against particular countries.Both American and foreign critics blasted them as either counterproductive and suicidal or unfair, imperialistic and xenophobic.Certainly, tariffs are widely hated by doctrinaire economists.They complain that tariffs burden consumers with higher prices to protect weak domestic industries that, shielded from competition, will have no incentive to improve efficiency.Their ideal is “free” trade.

Supposedly a free global market alone should adjudicate which particular industry in any country can produce the greatest good for the world’s consumers, whether defined by lower prices or better quality, or both.Even when “free trade” becomes “unfair trade” — such as China’s massive mercantile surpluses — many neoliberal economists still insist that even subsidized foreign imports are beneficial.Cheap imports, Americans were told, supposedly still lowered prices for consumers, still forced domestic producers to economize to remain competitive and still brought “creative destruction,” as inefficient domestic industries properly gave way to more efficient, market-driven ones.But many exporters to the United States are propped up by their own governments.They may seem more competitive only because their governments want to dump products at a loss to capture market share, subsidize their businesses’ overhead to protect domestic employment or seek to create a monopoly over a strategic industry.Yet when Trump threatened to level tariffs against Mexico, Canada, Colombia, Venezuela, China or the European Union, they were not primarily aimed at propping up particular inefficient US industries at all.Instead, an exasperated Trump threatened Mexico with tariffs for three reasons.First, it refused to address its cartels’ illegal multibillion-dollar export of lethal fentanyl into the United States.The cartels buy Chinese-supplied raw fentanyl with impuni...