Some Links
Iain Murray exposes the profound contradictions of the many attempted justifications for Trump’s protectionism. Here’s his conclusion:
Of course, if tariffs are a negotiating tactic, they can’t be long-term solutions to restore lost industries, and they certainly can’t be a replacement for the income tax. In most cases, they make the situation worse and raise prices for the middle class. On the other hand, free trade tends to make the nation better off. That is a lesson that has to be relearned every few decades.
Elliot Kaufman reports that “Trump’s tariffs stir a new patriotism – in Canada.” A slice:
This is a trade war, started by the behemoth to Canada’s south, and rallying around the flag has helped Mr. Trudeau’s down-and-out Liberals recover 10 or 15 points in the polls. The prime minister’s replacement as party leader, expected to be the environmentalist central banker Mark Carney, suddenly has a chance to win the next federal election.
Conservative leader Pierre Poilievre is the more pro-American candidate, and the only one capable of speaking about President Trump without compulsive denunciations. Presumably, he would stand a better chance of working with Mr. Trump to resolve the dispute amicably. But if that sounds to you like a political strength rather than a liability, you are misreading the moment. Canadian nationalism is real—and aggrieved.
The new tariff exemptions also will do nothing to mitigate the uncertainty that Trump’s tariffs have created in the North American market. Most obviously, few if any companies will make major changes to their business operations with only a one-month reprieve from punishing tariffs and no assurances as to what will apply thereafter. President Trump has also promised additional tariffs—on steel and aluminum, on “reciprocal” terms, on cars and semiconductors, and so on—in the coming days and remains steadfast in his support for using tariffs to achieve various economic and geopolitical ends.
The mandatory six-year review of USMCA in July 2026 further compounds these concerns. It’s thus no surprise that various measures of US trade policy uncertainty have skyrocketed in recent weeks—reaching levels far higher than those set during Trump’s first term, which has since been found to have depressed US business investment by tens of billions of dollars.
The stock market’s performance is often used as a shorthand for the relative strength of the economy. That’s not quite correct. A more accurate way to think about the stock market is as a reflection of what investors believe the economy will look like in the future—because, at the most basic level, buying or selling a stock is a bet on the future performance of that asset.
This week’s selloff, then, is more than just a reaction to the tempestuous trade policy coming from the White House. It is also a signal that many investors believe the instability (at best) and significantly higher taxes (at worst) will continue to drag the economy for the foreseeable future.
It’s hard to fault them for thinking so. Trump has been obsessed with imposing tariffs for years. He campaigned on a promise to hike tariffs on nearly all imports. Since taking office six weeks ago, he’s threatened, imposed, postponed, and withdrawn tariffs on nearly a weekly basis, only to turn around and start the cycle all over again. It’s irrational and economically illiterate, but there’s no indication that it’s going to stop anytime soon—and so businesses and investors are responding accordingly.
George Will reflects on Christine Rosen’s new book, The Extinction of Experience. A slice:
Rosen has elegant, well-bred regrets about, inter alia, the slow disappearance of handwriting. Today, hands are trained for swift keystrokes rather than the skillful application of ink to paper. An intimacy is lost when texting supplants cursive.
But, then, as Virginia Postrel, author of “The Future and Its Enemies” (1998), says when reviewing Rosen’s book for Reason: Before ink, paper and knowledge of the alphabet became abundant, all communications had to have the intimacy of face-to-face exchanges. How far back should regrets go?
“The US tax and transfer system has become more progressive.”
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