Getting Away With an Act of Tariffism

Watered-down tariffs on steel and aluminum go into effect in two weeks. The exemption of Canada and Mexico takes out 30% of the tax-hike effect. The stock market is slightly higher than when the tariff crisis began last week, perhaps signaling approval of the way it turned out – but in any event giving Trump permission to go further along these lines. The Trump process of decision, negotiation and persuasion looks more chaotic than it is. Re-engineering the terms of global trade has a positive and high expected return, but it is risky because it threatens large existing economic structures. The low-hanging fruit of de-regulation and tax cuts has already been picked. Now comes the high-hanging fruit, and the risk.