The Blazing Saddles Tariff Strategy
There's a memorable scene (among many memorable scenes) in the Mel Brooks comedy-film classic, Blazing Saddles, in which Sheriff Bart (played by Cleavon Little) receives a hostile reception from the townsfolk of Rock Ridge, who he was sent to protect. Held at gunpoint and heavily outnumbered by citizens who are shocked and mortified by the fact that Bart is black, the sheriff decides he needs to build some quick leverage to negotiate his way out of the situation.
In a flash, he pulls his gun from his holster and holds the muzzle to his own jaw, absurdly threatening to shoot himself if his captors don't let him go. In other words, he is taking himself hostage.
Even more bizarre is the response the unexpected move gets.
"Hold it, men," says one of the citizens, nervously lowering his gun. "He's not bluffing."
"Listen to him, men," warns another. "He's just crazy enough to do it!"
Bart begins switching back and forth between two separate personalities: the hostage and the hostage-taker. As the hostage, he pleads for his life. As the hostage-taker, he issues more threats to pull the trigger. And hysterically, it works. The townsfolk's sudden regard for Bart's life, and the perceived peril he's in, compels them to back down and allow for his escape. He has, in effect, won the standoff.
It's just the kind of over-the-top slapstick brilliance that one would expect from a Mel Brooks film. And unfortunately, it seems to be the same strategy that President Trump keeps using against foreign trade partners, as a negotiating plank.
The latest example came just yesterday with a presidential announcement on Twitter:
On June 10th, the United States will impose a 5% Tariff on all goods coming into our Country from Mexico, until such time as illegal migrants coming through Mexico, and into our Country, STOP. The Tariff will gradually increase until the Illegal Immigration problem is remedied,..
— Donald J. Trump (@realDonaldTrump) May 30, 2019
As just about everyone (except for the president) knows by now, the tariffs we impose on other countries aren't actually paid by those countries. They are instead paid by Americans — specifically the Americans who import goods from those countries. These tariffs are new taxes on U.S. citizens. The Americans who either resell those goods or use them in the production of American-made products (most products made in the U.S. use components from other countries) then have to raise their prices, on American consumers, too make up for the increase in costs.
Reaction to the president's announcement (from across the political spectrum) came as swiftly as Gene Wilder's revolvers...
— Charles C. W. Cooke (@charlescwcooke) May 30, 2019
These people are right, of course. Trade wars, by their very nature, cause damage to the countries that wage them. And with Mexico as one of our primary trade partners, there would be an extraordinary number of American hostages taken by this American president, should this wholesale plan of his be enforced.
As Justin Lahart pointed out in the Wall Street Journal this morning, U.S. auto-makers (who are already struggling with the effects of Trump's trade war with China) would be among the hardest hit.
Now, to be fair, the tariffs would also hurt Mexico's economy, because fewer American companies would purchase Mexican goods. And in that sense, Trump's strategy (from a leverage standpoint) is marginally sounder that Sheriff Bart's. But the belief that their implementation would motivate and equip the often dysfunctional Mexican government to stop illegal immigration over its borders isn't any less cartoonish than Alex Karras punching out a horse.
In fact, as Scott Lincicome of the Cato Institute suggested, damaging Mexico's economy would be... well, counter-productive:
While running for office, President Trump regularly billed himself as a master negotiator, but we have yet to see these alleged skills since he has taken office. What we have seen is the president using the power of the federal government to artificially dry up trade markets (at the expense of U.S. producers and tax-payers) while driving up costs for U.S. consumers... all for the purpose of a perceived bargaining chip in a game Mr. Trump doesn't really seem to understand.
Effective deal-makers don't repeatedly throw their greatest assets under the bus. At minimum, they perform a cost-benefit analysis before opening any kind of negotiation. With stuff like this, Trump seems more interested in just blowing up the news cycle and letting the chips fall where they may.
If this were a Mel Brooks movie, it would be funny. But this is reality, and these are people's livelihoods. We have an otherwise hot U.S. economy... It would be great if President Trump could just let everyone enjoy it.