As I mentioned last week, Trump constantly talks about tariffs, but that hasn't led to voters thinking of tariffs and trade as a top policy issue. After I did my post, Trump gave an interview in which he talked about tariffs even more than usual. (Normally I provide full text quotes, but in this case there was just too much, so you can watch the video here if you are interested.) And while there wasn't anything particularly new and interesting about what he said, but rather just more of the same thing, it nevertheless triggered a few thoughts from me.
To start, Dmitry Grozoubinski has written a whole book on "Why Politicians Lie about Trade," and I can imagine some people will think Trump is lying when he talks about this issue. But as best I can tell, Trump actually believes his arguments. He's wrong, in large part because he misunderstands the causes of trade deficits (I'll get back that in a moment), but that doesn't change the fact that he believes it.
As an alternative (or complementary) explanation, some people present this as Trump "negotiating," and I acknowledge that it's possible he thinks his remarks constitute some sort of negotiating tactic. In his mind, when he threatens these tariffs, other countries will be likely to make trade (or other) concessions, perhaps because of the general economic and security leverage the U.S. has over them or perhaps because he thinks the U.S. trade deficit means that trade wars will hurt others more than they hurt us. But I think he is mostly wrong about this. The reality is that other countries have domestic politics too, and political leaders in other countries can't go to their public and say "we totally caved to Trump." As a result, major changes to the balance of existing trade commitments based on this negotiating tactic seem unlikely at the moment. In his first term, Trump was able to get tweaks to the USMCA, KORUS, and US-Japan trade arrangements. (On China, there was the Phase One deal, but it's not clear to me that it had an impact on Chinese policies and practices.) But going back to the same countries with follow-up demands is not likely to achieve much. At a certain point, for the domestic political reasons noted, they just have to say something like, "fine, withdraw from the agreement or impose tariffs if you want, but we can't keep conceding things."
Part of the reason for the difficulty with renegotiating the existing balance of trade arrangements, which Trump and his advisers seem to think is unfair to the U.S., is that a lot of people would say it is actually unbalanced in the favor of the U.S., pointing to things like the TRIPS Agreement as an example. So why do Trump and his trade advisers see things differently? In large part, it's because they fundamentally misunderstand the trade deficit. For them, the U.S. trade deficit is, in and of itself, evidence that the existing trade arrangements are unfair to the U.S. In their view, foreign protectionism and unfair practices must be the main cause of the trade deficit. I think they are wrong about this, and I agree with the consensus view of economists that macroeconomic factors are the most important driver of the trade deficit, but unfortunately I have had no success in getting anyone from the Trump side to engage on this issue. I would ask them this question: In a world where the U.S. has a relatively low savings rate and the dollar is the reserve currency, how do they expect the U.S. not to have a trade deficit? I'm baffled by their views, and aside from them offering vague and general denials that macroeconomic factors are the cause, I've never heard any of the trade deficit hawks address this.
Another point that occurred to me when listening to this Trump interview is that if you are thinking about how Trump might govern on trade, certainly we should all expect lots of new tariffs, but at the same time it's worth noting that there is likely to be an internal Trump vs. his administration debate on trade policy. Some people he hires will be looking to pry open foreign markets a bit (and even Trump indicated during the interview that he was worried about foreign regulations that affect U.S. companies), which cuts against him imposing the full range of tariffs he has proposed, as foreign retaliation is certain to be the response to his tariffs. A related point here is that in his remarks in this interview, Trump seemed to suggest, as he has before, that he would be OK with Chinese-owned factories in the U.S. But many other Republicans (and a few Democrats) seem adamantly opposed to that. Who would win that internal battle?