In the 1970s, a joke made the rounds on college campuses that went something like this. Question: How many surrealists does it take to screw in a light bulb? Answer: fish.
Admittedly a bit esoteric, the joke found favor with those who saw hilarity in an absurdist answer that bore no relation to the question.
It came to mind this week with President Donald Trump’s latest trade tantrum, a plan to impose steel and aluminum tariffs on Argentina and Brazil. This action, Trump explained by tweet, would punish the two countries for driving down their currency valuations, which makes their exports more attractive. Among others being hurt by devalued currencies, the president said, are American farmers.
Let’s get this straight: Trump’s plan to help American farmers is to punish South American metals companies. Or, put another way: fish.
How trade wars hurt farmers
Let’s start with a few facts. The currencies of Brazil and Argentina are weak not because of manipulation but because their commodity-driven economies are in tatters. Outsiders aren’t buying much of their nonfarm products and don’t want to invest there.
A metals tariff, moreover, is more likely to hurt American farmers than help.
OPPOSING VIEW:President’s trade policy seems to have achieved the impossible
Farmers are already reeling from Trump’s other trade wars as countries such as China retaliate against tariffs by buying agricultural products from places other than the United States. Brazil and Argentina, both big soybean producers, have been among the beneficiaries.
Trump’s new tariffs would put more pressure on their economies and potentially push down their currencies further, which, in turn, would make their agriculture exports more attractive.
Perhaps Trump will see the absurdity of this trade policy and plot a quiet retreat. Or perhaps not. With him, you never know.
Red tape on farm subsidies
The larger point is this: If the president has a grand strategy or endgame on trade, it’s not visible to the naked eye. He uses tariffs to make noise, create chaos, get attention and feel a sense of power. Congress ought to pass pending measures to restrict a president’s ability to impose tariffs unilaterally.
At home, U.S. steelmakers love tariffs. But domestic manufacturers that buy steel, a much larger part of the economy, are getting hammered — both from higher input costs and from the sheer uncertainty that Trump’s policies foment.
U.S. farmers are getting hit even harder thanks to declining exports. In an attempt to buy them off, the administration this year announced $12 billion in subsidies. That’s not much consolation. Farmers would rather have robust sales than Washington handouts. And, so far, red tape and long waits have meant little aid is getting to them.
All of this points to a Trump trade policy best seen as an absurdist joke, an unfunny one at that.
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