Bryan Gould: Trump a 'simple soul' seeking a simple solution

Donald Trump is seeking a simple solution to improving American competitiveness. Photo/Getty Images

Donald Trump is, as we all know, a simple soul.

He knows what he thinks, which is often unencumbered by the facts. If he doesn't know them, he just invents them, as witness his admission that his assurance to the Canadian Prime Minister that the US had a trade deficit with Canada was made up.

The real world may present him with all kinds of intractable problems, but there is always room in the Trumpian world for the President as hero, a Lone Ranger riding to the rescue and calling "Hi Ho Silver!" or, in Trump's case, "Raise tariffs on imports!"

This is not to say that he has not identified a real problem – it is the proposed solution that is a little awry. He is right to ask why the United States, with all of its industrial power, cannot produce steel and aluminium at prices to match those charged by other countries.

He is also right to recognise that this state of affairs is both a consequence and a cause of the de-industrialisation that has destroyed so many American jobs in what has now become known as the "rust belt" – a region that delivered so many votes to Trump in the 2016 election.

But, instead of facing facts, and listening to expert opinion on what needs to be done to improve American competitiveness, President Trump has gone straight for the apparently simple solution.

If foreign suppliers can undercut American producers, he reasons, it must be attributable to unfair practices by those dastardly foreigners, and must be fixed by raising tariffs on their goods, whether they like it or not.

The problem is that, not surprisingly, they do not like it, and they are all too likely to retaliate.

So, as well as coming up with a "solution" that just entrenches the real problem – the relative inefficiency of American industry and its propensity to charge more than the going rate – President Trump has launched a trade war that will hurt not only the American economy but the global economy as well.

Protection for domestic industries is, of course, a remedy to which many economies have quite properly had recourse – particularly when, as in the case of post-war Japan, they are trying to build or re-build their industrial strength. (We must recognise that not all countries are as naïve as New Zealand in unilaterally throwing open our borders to all comers, without securing any corresponding benefits in return, so that we have nothing left to offer when it comes to multilateral trade deals.)

But it would be stretching credulity to treat the US as though it was a developing economy that needs protection if it is to survive.

Even the President's own advisers and supporters are aghast at what he has now so proudly declared is an instance of putting "America first".

They can see that his supposed solution is in reality no more than an admission of failure, and that it will actually make matters worse, as America's trading partners, like the EU and China, hit back.

President Trump, however, is so persuaded by his comic-book version of how a "President as hero" should behave that he avers that "trade wars are good and are easily won".

The reality is that, as even a cursory survey of history would reveal, trade wars are not only bitter and destructive but also, in the end, dangerous, and can be a precursor to wars of a more militaristic kind.

At the very least, a trade war in response to this Trumpian "solution" could be damaging to the interests of a small open economy like New Zealand.

"Free trade" may not always be what it seems - particularly when it takes the form of a TPP – but we have more to lose than most if trade barriers are re-erected.

We should of course always be aware of the price we might be asked to pay for apparently "free" access to overseas markets (like China), but we should be under no illusion about the consequences of this latest outburst of simple-mindedness from the White House.

Let us hope that the Republican Party will, at last, recognise its responsibilities and restrain its wayward toddler from throwing his toys out of his playpen.