BROWN: A Trump-whisperer reads the tea leaves

Grant A. Brown is a retired philosopher and home renovator who currently resides in Edmonton, ABI have been puzzled by Trump's uncharacteristically on-again, off-again tariff war with Canada. He doesn't normally prevaricate like this; he doesn't normally back down at the first hint of opposition or market fluctuation. It allows the opposition to claim that he is weak, vacillating, even losing. So why is he doing it this way?Trump's goal is to entice American businesses to look for more American suppliers and American consumers, so as to grow the American economy and make it less dependent on or vulnerable to foreign markets. Intermittent threats of tariffs are the most efficient means of getting there.If Trump simply imposed 25% tariffs and made them stick, it would take months, in some cases maybe years, for the American economy to adjust the way he hopes. All the while, American consumers would be paying the 25% tariffs until the adjustments work their way through the economy. .By contrast, by threatening tariffs, putting them on for a few days and taking them off again, then renewing the threats with different tariffs on different goods, Trump creates the same level of uncertainty and fear among American businesses, but only imposes fleeting costs on American consumers. The intermittent strategy achieves the same goal with less economic hardship to the domestic economy. There is an adage in chess: "The threat is often stronger than its execution." A defending player will often compromise their position to meet a threat, when in fact it is the compromised position that the attacker was after all along. .Trump wants American businesses to domesticate their supply chains; he can do that by threatening tariffs on foreign goods, forcing them to develop local suppliers, because businesses hate uncertainty. Trump has to impose temporary tariffs to make the threat credible. But then he pulls them off so as not to hurt the American consumer. The fear of a repeat lingers and that's what Trump wants to motivate the changes he is after. The other thing that intermittent tariffs and threats of tariffs do is they reveal the strengths and weaknesses in the system. They show which inputs are quick to respond to price signals, and which will take longer. If it provokes a response from the countries subjected to the tariffs, it reveals their strengths and weaknesses, too. This information allows Trump to tweak the tariff threats and intermittent tariffs in later rounds. Great game-theoretic thinking, if this analysis is correct. Maybe Trump isn't as stupid as his detractors think. .The steel and aluminum tariffs have a different rationale. Trump wants America to be self-sufficient in militarily important industries, and he might be willing to force the American consumer to pay higher prices for steel and aluminum if military self-sufficiency can be hastened by imposing fixed tariffs. I'm sure Trump is aware that tariffs are an inefficient economic policy — everyone knows this these days. But they might be efficient means for achieving non-economic ends, of which military self-sufficiency and improved border monitoring and security would be the most obvious examples.Grant A. Brown is a retired philosopher and home renovator who currently resides in Edmonton, AB.

BROWN: A Trump-whisperer reads the tea leaves

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