Follow-Up on the Political Prospects for Removing Trump's Tariffs

Former Biden administration officials Heather Hurlburt and Peter Harrell both offered LinkedIn responses to my post last week about the political prospects for a future president removing Trump's tariffs.

Peter offered some partial support for my view, in particular on my skepticism of the political importance of tariffs as revenue generators. Heather, whose original comments on this issue were the trigger for my post, pushed back a bit. In doing so, she elaborated on her points about the incremental value of tariff revenue in making the U.S. fiscal situation a bit more sane, as well as the constituencies that develop around specific tariffs.

Let me first note that, as their LinkedIn profiles make clear, both Heather and Peter have spent a good deal of time working in the executive branch, and I am quite sure their insider experience gives them insights that I don't have. As a result, I take seriously anything they say on these matters.

At the same time, I think that working on the inside can put you in a bubble to some degree, and sometimes the thoughts of a naive, idealistic outsider can be useful. I'm happy to play that role here!

Putting that theory into practice, as an outsider, it seems to me that there can sometimes be so much caution and care in political decision-making that we end up with something close to paralysis. If people agonize too much about how every interest group and faction will view a policy decision, they may end up with a bad decision or no decision at all. Sometimes it's better to trust your instincts and just go for it.

The practical risk here is that the agonizing could lead to an overly cautious approach to changing various Trump policies. There are a wide range of these policies that a future Democratic president would likely object to, including foreign policy interventions, insufficient protections for workers and minorities, immigration crackdowns, income taxes, spending choices, and, of course, tariffs. Our hypothetical Democratic president – it could be a Republican taking over, of course, but at this point let's just focus on how a Democrat would handle things because it is simpler in some ways – will have to look at each one, and make a decision on how quickly and thoroughly to reverse course. As part of this, a key question will be whether to shut things down immediately and develop a replacement later, or to keep things in place while a new policy is worked out.

I understand the desire for caution, but I can also imagine that if you don't do certain things right away, they may not get done at all. Four years can seem like a long time as you are entering office, but with everything you will have to deal with, it may feel like it goes by more quickly than you expected.

Getting back to the policy at issue here, in the case of the Trump tariffs a key point is the link between tariff revenue and budget deficits. It seems to me that a future president could make the case for revisiting both of the main components of that deficit (income tax and spending levels), and in that context explain that the tariffs haven't made much of a dent in the budget deficit (and in the meantime have led to problems in the domestic economy and in international relations).

Will there be certain constituencies that object to the removal of these tariffs? Sure, but as part of the broader policy review that would be taking place, I suspect that the people staffing this new administration can think of ways to keep these constituencies happy.

Anyway, let's have the midterms first, then come back to this issue next year!