How to persuade Donald Trump that tariffs would Make America Weak Again?

Donald Trump talks a fierce and impetuous game on trade but the last time he was president, he held back from imposing blanket tariffs on US imports. It is hard, therefore, to know how seriously to take his latest policy-making-by-social-media post – in this case, posting on his own Truth Social platform to say that he will impose a 25 per cent tariff on “all products” coming into the US from Canada and Mexico.

This is higher than the 20 per cent that he has previously threatened to impose on imports from countries other than China – China being in a category of its own in the president-elect’s mind, for which he has previously suggested a 60 per cent tariff.

During his first presidential term, however, a lot of his tariff talk turned out to be bluster. Just as he never built a wall along the US’s southern border, he never built a tariff wall around the US’s economy. Despite tweeting, “Trade wars are good, and easy to win,” in 2018 – when Twitter, as it was still called, was his favoured means of communication – the tariffs he actually imposed were selective. The big items were steel and aluminium.

The European Union, of which the UK was then a member, retaliated by imposing tariffs on symbolic American goods, including Harley-Davidson motorcycles and Jack Daniel’s whisky. As we report, ministers have asked officials to prepare options for similar retaliation this time.

The lesson from Mr Trump’s first term is that he appears to be aware that an all-out tariff war would be bad for Americans – and especially for those on lower incomes, who tended to vote for him. But he wants to be seen as standing up for those Americans, many of whom see imports as unfair competition and a threat to their living standards.

Mr Trump seems able to ignore that contradiction by his mercurial rhetoric, which is more about appearing strong on the world stage and threatening other countries than it is about full-blown protectionism. Indeed, even his limited tariffs did not last long. The most important ones, on steel and aluminium from Canada and Mexico, were dropped after little more than a year, in 2019.

Thus, the effect of his protectionism on the US economy was small in his first term, although the universal consensus of economists is that it put up prices and restricted growth. It may have contributed in a small way to Mr Trump’s defeat in the 2020 election.

Things may be different now, in that Mr Trump will not be seeking re-election. He is constitutionally barred from seeking a third presidential term, and changing the constitution is beyond him, requiring a two-thirds majority in both houses of Congress and three-quarters of the states.

But he does not resemble someone indifferent to the views of his supporters. Given that the post-Ukraine spike in inflation is one of the causes of his re-election, he would not want a trade war to cause another spike.

Sir Keir Starmer, along with other European leaders and the leaders of Canada and Mexico, need to find ways to drive this point home. This is difficult because it requires managing Mr Trump’s monstrous ego. It means persuading him that the way to Make America Great Again is to return to the principles of free trade on which the American economy was built. Or, if that is too dissonant for him, that an all-out trade war would raise prices, suppress growth and Make America Weak Again.

This will be difficult for Sir Keir, who has said disobliging things about Mr Trump in the past and has become the object of ill-informed hate-tweeting from Elon Musk, who is currently set to become First Buddy at the Trump White House.

But Sir Keir has to hope that someone can do it. Maybe Peter Mandelson, if he chooses him to be our ambassador to Washington. Because a tariff wall against all British exports to the US would be disastrous for Britain’s relatively open economy.

If Sir Keir is serious about his “number one mission” to promote growth, he has to find someone who can talk Mr Trump out of his protectionist bluster.