Trump's War on Economic Reality Continues

Now that Trump has lost the Supreme Court case against his illegal IEEPA import taxes he is turning his attention to doubling down on his war against economic reality even as he attempts to shirk his duty to see out the one against Iran.

This time, the magical incantation he hopes will make the Constitution disappear lies in Section 301 of the 1974 Trade Act.

The law will, he hopes, enable him to declare normal trading conditions "unfair" after his cronies "investigate" what they're calling "structural excess capacity" in global manufacturing.

The writers at The Hill do a fine job of explaining how this Administration plans to misuse this law and how ridiculous their premise is:

Trade surpluses in manufacturing are not proof of misconduct. They're the natural result of differences in savings, consumption and industrial specialization across economies. By treating trade surpluses themselves as suspicious, the administration risks turning Section 301 from a targeted enforcement tool into a weapon against basic laws of economics.

Section 301 was rolled out in the 1974 Trade Act to respond to specific foreign policies that burden U.S. commerce, like forced-technology transfer, discriminatory regulations or market-access barriers. It was never meant to police global trade balances.

...

In other words, the criteria are so broad that they would implicate virtually every manufacturing economy in the world. That's clearly not a bug, but a feature of an investigation that seeks to backfill the tariffs lost when the Supreme Court struck down the ones Trump invoked under the International Emergency Economic Powers Act. [bold added, links omitted]

It is interesting to note that, whatever the propriety of this law, this attempt to use it as an excuse for import taxes "blurs an important line between government policy and economic structure," in effect blaming capitalism by association for the consequences of the bad economic policies this law is supposed to address.

-- CAV

P.S.: In related good news, it looks like the Court of International Trade is doing a great job of holding Trump's feet to the fire in the matter of quickly refunding all the loot from the IEEPA import taxes.