Trade War Delayed In Favour Of Grifting

The feared Opening Day Tariff War On Canada has been at least delayed (CBC link). Although Trump is a big fan of tariffs as an economic policy, he also likes using them as a club. At present, the club is being used to get Canada to up its spending on controlling the fentanyl trade, as well as stopping the dozens of people annually who enter the United States covertly from across the U.S.’s northern border.

Instead of looking at policies that might matter for the U.S. public, Trump’s team has focussed on the more important priorities by fleecing his credulous supporters and/or providing a conduit for bribes via issuing a pair of meme coins. This is exactly the policy focus we should expect for the next four years. Governing is hard, grifting is easy.

The real political focus seems to be on the Southern border (as well as rooting out domestic enemies). Given that a high percentage of the employers of migrants are Republicans, expecting anything resembling a coherent policy is wishful thinking. The main question is whether Trump listens to the Special Forces grifter complex and decides to launch a Special Military Operation initially targeted at the cartels. Although that might not sound like an issue for an economics blog, the blowback from such a stunt could easily have major economic consequences.

The baseline policy scenario has to remain that there will be large tax cuts, an attack on the Federal bureaucracy, along with other random gyrations. This is presumably mildly bond bearish, but raw economic incompetence might keep people from getting too bullish on growth.

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(c) Brian Romanchuk 2024