‘It’s insulting’: Donald Trump’s White House fumes at accusations that he doesn’t understand his own economic policies
An angry response from Donald Trump’s press secretary today should set off massive warning alarms in the White House.
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The White House has hit back at the widespread criticism of Donald Trump’s tariff policies, insisting they will benefit Americans – and won’t cost anything, even in the short term.
Mr Trump announced, during his not quite State of the Union speech last week, that worldwide reciprocal tariffs would go into effect on April 2. That’s in addition to the tariffs already imposed on two of America’s biggest trading partners, Canada and Mexico.
In recent days he has seemed to acknowledge that his tariffs will cause some pain, for Americans, in the short term, while also arguing they’ll be worth it in the long term. I mean, his chosen word has actually been “disruption”, which is a touch euphemistic. But it does mean pain.
And yet! During her media briefing today, White House press secretary Karoline Leavitt disputed the assertion, from journalists and a broad spectrum of economic experts, that Mr Trump’s tariffs will be, essentially, tax hikes on his own constituents.
“He’s actually not implementing tax hikes,” she said.
“Tariffs are a tax hike on foreign countries that have been ripping us off. Tariffs are a tax cut for the American people. And the President is a staunch advocate of tax cuts.”
The press corps did not accept this spin.
“Sorry, have you ever paid a tariff? Because I have. They don’t get charged on foreign companies, they get charged on the importers,” one reporter told Ms Leavitt.
The press secretary stuck to her lines.
“Ultimately, when we have fair and balanced trade, which the people have not seen in decades, revenues will stay here, wages will go up, and our country will be made well again,” said Ms Leavitt.
“And I think it’s insulting that you’re trying to test my knowledge of economics.”
Hmm yes, very insulting. Of course, the Trump administration is inviting these questions about its knowledge, or lack thereof, of economics. It’s practically begging for them. Because, so very awkwardly, the President appears to have no idea how his own central economic policy actually works.
If someone says 2+2 equals 15, and you ask them to clarify what the hell they’re talking about, it’s not an insult to their knowledge of mathematics. It’s a fair bloody question.
Mr Trump has long insisted that tariffs only hurt the targeted country. So if he decides to throw a tariff on, say, lumber imports from Canada, that will hurt Canada, and America will be fine. Better than fine, in fact. America’s government gets revenue from the tariff, and its relevant industries keep thriving. That is his theory.
We could call it untrue. Or pitiably naive. Or economically illiterate. The point is it’s wrong. When you chuck a tariff on lumber, you are by definition raising the cost of importing it. And that cost is mostly borne by the businesses that do the importing.
American businesses. Guess what happens next? Those businesses transfer most of the increased cost to their customers. Of course they do; they have to maintain their profits. And so the cost of living rises, at a time when it was already too high.
The Canadians also get harmed in this process, which vindicates Mr Trump’s tariff policies to a point, as long as you’re purely interested in economics as a tool of vindictiveness.
But when Ms Leavitt describes the tariffs as a “tax cut” for Americans, she is just fundamentally, even laughably, wrong. It’s not necessarily her fault; she’s merely parroting what her boss believes. But ... it’s a problem, yes, that the American President does not understand basic economics? We should maybe be worried about that? Particularly as Australia is about to be smashed by his misinformed whims.
“The idea that tariffs are a ‘tax cut’ is nonsense,” said Marc Short today. He was the director of legislative affairs, the official chiefly responsible for co-ordinating with Congress, during Mr Trump’s first term in office.
“Tariffs are essentially a tax on American consumers and businesses, plain and simple. Importers pay them upfront and those costs get passed down to you.
“This is economics 101.”
Economic historian Phil Magness was similarly scathing.
“I have studied the history of US tariff policy for most of my professional career, and have written dozens of scholarly and popular works on the subject,” he wrote on social media.
“In watching this exchange, I am absolutely certain that Leavitt is ignorant of tariff economics on a very basic level.”
Some of you, right now, are rolling your eyes at those quotes from Mr Magness, because it has become quite fashionable to disregard, or even mock, expertise. Having published “dozens of scholarly works” on the subject gives tryhard nerd energy. As opposed to the energy Mr Trump gives when he makes up any old crap off the top of his head.
So the President’s beloved tariffs will presumably go into effect, and the United States – plus the rest of us – will have to wear the consequences.
In the meantime there’s a broader problem to consider. What we have seen from the White House, in these first months of Mr Trump’s term, is not just regular politics. It’s a refusal to engage with reality.
Look at Ms Leavitt’s reaction, when she was asked to justify the administration’s stance on tariffs. Did she engage with the issue on the merits? Did she explain the President’s view of economics on anything resembling a substantive level? Nup. She just called the question insulting and moved on.
Look at Mr Trump’s reaction, during his spitball session with reporters on Air Force One the other day, when a reporter asked about Vladimir Putin continuing to bomb Ukrainian civilians. Was it disrespectful, the reporter asked, for Putin to press forward so ruthlessly with his campaign of violence while Mr Trump was seeking a peace deal?
“Who are you with?” the President asked.
“You’ve lost a lot of credibility,” he said, upon learning that the reporter was from The Washington Post. He didn’t even try to answer the question.
We could keep citing examples for some time, but you already see the pattern, right? Instead of engaging with the substance of these issues, the US administration’s reflexive instinct is to resort to ad hominem nonsense.
That is not going to fly, three months from now, if the stock market keeps going down, America’s employment numbers stay weak, and the cost of living is made even worse by Mr Trump’s inflationary policies.
There’s been a lot of talk this week about a potential recession in the US, which Mr Trump has declined to rule out. That’s a risk, not a certainty. It may very well be avoided.
That said, if a recession does happen, Mr Trump cannot – cannot – deal with it in the same way as the biggest crisis of his first term, the Covid pandemic.
There were two themes that coloured his Covid response in a deeply unproductive way.
One was to shift the blame to China. Now, in that case, China actually was to blame for botching its initial response to the virus; it just didn’t help a single American dying in hospital to point that out.
In the event of a recession, we can guarantee Mr Trump will seek to blame other countries again, but this time he’ll be on much, much weaker ground. His own economic policies will be inextricably linked to whatever happens in the coming months, good or bad.
The other theme, and the more damaging one: denial of reality.
During Covid, Mr Trump was constantly claiming the number of cases and deaths in the United States were being inflated to make him look bad.
Expect the same thing again. If a recession happens, the President will say the “deep state” operatives who measure America’s economic data are trying to sabotage him. And that will be an awful idea.
It is very dangerous for any politician, even one as Teflon-coated as Donald Trump, to demand that voters ignore what they’re observing in their daily lives.
You want to tell Americans that Vladimir Putin respects you and the war in Ukraine would never have happened if you’d been in power? Fine, you can get away with that. But try to tell them the economy’s going well, when they can’t afford their rent or their groceries? You will never, ever get away with that.
We can argue about tariffs, or any other Trump policy, on the merits. The President or his press secretary or anyone else in the administration could absolutely come up with arguments to support his agenda.
Refusing to engage on the merits at all? That’s different. That is a recipe for overreach, for ignorance, for stubbornness in the face of contradictory evidence. That is what causes hubristic politicians to ignore the blaring warning sirens as they implement policies guaranteed to make their voters angry.
Mr Trump has only been in power for what, six weeks? And already those sirens are deafening.
Twitter: @SamClench
Originally published as ‘It’s insulting’: Donald Trump’s White House fumes at accusations that he doesn’t understand his own economic policies
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