According to press reports, the Biden administration is about to announce a quadrupling of tariffs (a tax on American importers) on electric vehicles manufactured in China. He could also announce other Trumpian tariffs (“Biden to quadruple tariffs on Chinese electric vehicles“, Wall Street Journal, May 10, 2024). This would not be surprising.
In a Regulation two years ago, I predicted that Biden would be Trump 2.0 (“Joe Biden’s economic program: a first assessment», Spring 2021). I wrote:
Broadly speaking, Biden’s economic approach appears to rest on the belief (largely shared by Trump) that voluntary exchanges between free individuals cannot be relied upon to guarantee economic prosperity and individual flourishing. This is perhaps most evident in international trade, where Biden will likely continue Trump’s policies. The only difference is that the profits will go to another corner of the Washington swamp: unions rather than inefficient American businesses. But all this is just one big swamp. Trump has asked Peter Navarro to oversee his protectionist agenda, and Biden has an entourage of Navarro imitators to oversee his. Apparently, Biden and his entourage do not understand any more than Trump that economic efficiency is defined in terms of consumer satisfaction and not producer privilege.
… Like Trump, Biden believes not in free trade but in “fair trade,” as he (and his supporters, the union leaders) define it. He promises to “defend America.” Protectionism is the area where Biden is most likely to be Trump 2.0.
If he continues his protectionist projects, Trump 2.0 would be, in this area, more Trumpian than Trump 1.0. As I argued in a recent article, the protection against environmental benefits is particularly ridiculous: see “The clean energy dumping farce», Econlog, April 1, 2024. But it is no more absurd and economically dangerous than Trump’s nationalism.
At the basis of all this lie phenomena that political economy has accustomed economists to observe: the greed of politicians for power in the face of organized interests and the logic of interventionism begetting interventionism. This morning Wall Street JournalHolman Jenkins summarizes one aspect of political logic (“Which trade war is worse, Trump’s or Biden’s?“):
Mr. Biden is showing every sign of wanting to start a global trade war to protect the expensive and uncompetitive green energy industry he built at home with taxpayer money.
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I am using for this article the same featured image (reproduced below) that appeared in the previous one, “The Clean Energy Dumping Farce.” As I explained there, my idea for DALL-E was that Chinese solar panels and electric vehicles were falling from the sky like manna, and Commerce Department agents were trying to take advantage of the freebies and d ‘stop people from getting them back. To get DALL-E’s half-cooperation, I had to explain that Commerce Department agents’ guns shoot roses.
Commerce Department agents prevent Americans from harvesting China’s green manna (DALL-E)
