Who Needs Reality?

Welcome to Trump world where fantasy trumps reality.

First up: Auto tariffs. President Trump says Canada and Mexico will pay these. Just like Mexico paid for the wall. The tariffs will hurt our two neighbors and largest trading partners.

But they also will hurt the American auto industry. American car manufacturers will have to pay those tariffs, driving up their cost of production and thus the price of cars. The prices of used cars usually rise as well, following the lead of new cars. That’s how tariffs work: They are not paid by the foreign exporters, but by the domestic importers.

Higher prices mean lower demand. That’s basic economics. Lower demand means less production. Less production means fewer jobs.

Now Trump argues that these tariffs will bring jobs back to the U.S. Perhaps. But at what cost? It will take years for auto companies to build the factories to assemble cars and to manufacture parts that are now being made in Canada and Mexico.

In the meantime, what happens to all those out-of-work auto people, in the factories, the supply chain and on the dealers’ lots? How long will their pain last?

Next up: National security. Trump has alienated this country’s long-term allies. These are countries who have fought with the United States in World War I, World War II, Korea, Vietnam, Iraq and Afghanistan. Countries that have patrolled the world’s oceans with the United States.

Will they be willing to join us in the future? Why would they?

Trump has also pushed, perhaps inadvertently, the Europeans to start work to reduce reliance on American weapons. They’re worried that Trump could pull the plug on weapons shipments or spare parts because he wants them to do something they don’t want to or they do something to upset him. They’ve seen what can happen when Trump suspended weapons shipments and intelligence to the Ukraine.

No big deal?

As the Europeans scale up their weapons production, they will reduce purchases from American manufacturers. That will impact jobs here. It also will probably drive up the cost of weapons the United States buys. Basic economics again: Once something is in production, the more that is produced the lower the cost for each unit. The fewer units, the higher the cost.

If you doubt any of this, just remember how much Mexico paid for the wall on the southern border: Zero.