Big Business Needs to Wake Up to the Economic Threat Trump Poses

Sadly, many leaders in America's business community seem to be in denial when it comes to the damage a second Trump regime could pose both to America's economy - and by extension the profitability of their companies - and world trade and the defense of America's allies.  Too many seemingly care only about ever lower taxes (many of the very wealthy are similarly blind) and loosened government regulations and refuse to listen to and be alarmed by Trump's economic proposals which could supercharge inflation, wreak havoc on the supply chain, and undermine international trade. Trump's proposals stem from his ignorance on economic matters - his companies have filed bankruptcy six times - particularly foreign trade where he believes wrongly that tariffs are paid by foreign nations when in fact they are paid by American consumers and businesses.  Many MAGA cultist are obsessed with post-pandemic inflation, much of it driven by corporate greed rather than Biden/Harris policies, yet remain blind to how much worse it could be under a second Trump regime.   Trump and the MAGA base's stupidity are one thing, but what is wrong with business leaders?  A column in the Washington Post looks at the need of the business community to wake up:

The conventional wisdom about Donald Trump is that he has no coherent policy agenda. He is transactional, impulsive and narcissistic. . . . . But Trump does have an ideological core, and it’s one that dates back a long way.

In 1987, when Trump was merely a New York developer, he spent almost $100,000 to take out a full-page ad in the New York Times. It was an open letter “To The American People,” and its basic message should by now be familiar. It began, “For decades, Japan and other nations have been taking advantage of the United States.” The thrust of the letter is that the United States is crippling itself by spending on the defense of its allies while those allies prosper. His solution? Make “Japan, Saudi Arabia, and others” pay America to protect them and “tax” these nations, by which he means impose tariffs.

This is the core of Trump’s worldview. In this campaign, he has announced that he would impose 10 percent tariffs on all imported goods and 60 percent tariffs on those from China. As for America’s defense commitments, Trump threatened he would not defend NATO countries that have not “paid their bills” — by which he means met their defense spending target of 2 percent of GDP. In fact, he said, he would encourage the Russians to “do whatever the hell they want” with such countries.

I’ve asked businesspeople who support Trump how they could be in favor of an agenda that was so obviously anti-markets, anti-growth and anti-stability. They reply that it’s all bluster, that Trump’s bark is always worse than his bite. But hostility to America’s allies and a fascination with protectionism are constants in Trump’s ideology.

Trump’s dark vision from the 1980s did not pan out. Japan and Europe stagnated, China rose, and through it all, the United States stayed remarkably strong, maintaining its share of global GDP at 26 percent from 1990 to today. American wages, once very similar to Europe’s, are now about 45 percent higher.

In the 1980s and 1990s, the Reagan and Clinton administrations tried all kinds of measures to stop Japan’s advance. They amounted to costly failures (and Japan missed the information revolution anyway). Undeterred by that record of failure, Trump wants to try it all again, this time with China, which now seems to be entering a period of slower growth itself, caused by its own mistakes.

So far, the record has been clear. By Trump’s own key measure — the trade deficit — the tariffs against China (extended by President Biden) have failed. Since the imposition of the tariffs, the trade deficit has expanded rather than contracted. Many studies have shown that these measures have cost American consumers tens of billions of dollars and have not altered China’s policies. A recent study by the Peterson Institute for International Economics concluded that Trump’s new tariffs would cost American consumers $500 billion annually, or around $1,700 for a typical middle-income family every year. In other words, they would stoke inflation.

Trump’s is an ideological view that facts and evidence can do little to dissuade. He insists, for example, that his tariffs are not paid by Americans, but rather by China and other nations.

There is a broader point to make here. The United States did something truly revolutionary after World War II. It understood that by underwriting international stability and helping other nations get rich, it would create a zone of peace and prosperity in which it, too, would thrive. That vision of enlightened self-interest has been at the heart of America’s engagement with the world for almost eight decades. Trump and JD Vance utterly reject it, choosing instead a dark, narrow and selfish vision that would turn its back on one of America’s greatest and most enduring achievements.