The Wall Street Journal’s Editorial Board has skewered “Tariff Man” Donald Trump’s latest economic flip-flop.
Leading with the mocking title ‘Tariff Man’ Is Back for More ‘Liberation,’ the Rupert Murdoch-owned publication went all in on the president’s decision to announce new 25 percent levies on trade partners South Korea and Japan, to add to existing duties on certain imports from those countries.
This comes after Trump walked back on his original “Liberation Day” tariffs from early April after they caused economic turmoil. He paused the super-charged levies to give his administration the chance to complete 90 deals in 90 days, a period that expires this week.
Treasury Secretary Scott Bessent has only managed to strike a deal with the U.K. and Vietnam, with a broad framework for a deal agreed with China, too.
With that lack of success in mind, Trump sent letters to the leaders of more than a dozen nations on Monday, imposing an Aug. 1 deadline for renewed deals. If deals aren’t struck, there could be tariff hell to pay, he suggested.
The WSJ said that, in the letters, he “huffs and puffs again about bilateral trade deficits, which he mistakenly thinks are a sign of foreign exploitation.”
Japan is America’s fifth biggest supplier of imports, while South Korea is also in the top 10. Trump has said that if either of the countries respond with tariffs of their own, he’ll hit back even harder.
“Whatever the number you choose to raise them by, will be added onto the 25 percent that we charge,” he said.
Trump appears to be going for the scorched-earth strategy once again, even though it didn’t work the first time. “What a way to treat two close American allies and fellow democracies in China’s backyard,” the WSJ reacted.
But why does he do it? Because negotiations through strength, or bullish threats, is all he knows, the publication adds.
“He’s imposing tariffs because he likes them as an economic policy. The U.S. average effective tariff rate when Mr. Trump took office was 2.4%, according to the Yale Budget Lab. As of last month Mr. Trump had cranked that up to 15.6%. How much higher does he want to go?” the board writes.
And the effect could be disastrous, it adds, saying that some “trade might grind to a halt” as a result of the tariffs. Specialized sectors that source machinery and software from these countries can’t readily find replacements, it says. This could cause chaos in those industries.
More generally, given the volume of trade, the economic backlash could be vast, WSJ adds. Some 8.6 percent of all imports in the U.S. came from Japan and South Korea last year.
The board added that the taxes would also limit the productive economy in the U.S.
“Mr. Trump’s tariffs on present course would take $300 billion in border taxes from the productive economy this year, and he seems bent on going higher. That’s an anti-growth tax increase, and an arbitrary one besides,” it said.
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