But What If He's Right?

Some business people are asking questions such as, "Suppose this tariffs thing, this economic shake-up, works out in the end, with the US having an ever larger share of the world's markets and an even larger GDP?" There are answers to that question, though they go beyond what is taught in business education, typically.

First, the United States already has a $30 trillion GDP. Our economy dwarfs those of other countries. It is fine to aspire to grow the US economy and it is expected that our national leaders pursue that goal, but how it's done matters, for reasons I address below.

Second, that gargantuan GDP number isn't merely the result of unfettered transactions in a laissez-faire economic free-for-all. It is in large part the result of the legal and regulatory structures that have been put in place and which make the United States a trustworthy repository of the world's savings and investments. There is a reason US Treasury returns are referred to as "the risk-free rate" against which other debt, sovereign and corporate, is benchmarked. (At least, up until now.)

Third, as I tell my business ethics students, businesses that set profit maximization as their goal misunderstand what a business is for. Businesses do not exist to maximize profits, as Harvard's Charles Handy and the late, great, Peter F. Drucker, the father of modern management studies, made clear. A business that exists primarily to maximize profit is in a state of confusion about its mission and, being confused, will in time make misguided or even fatal decisions that harm both the business and its shareholders and other stakeholders. Examples include Enron, WorldCom, and Lehman Brothers — but there are many, many more. It is important to point out that the same is true of states, which pursue GDP growth to the exclusion of other important goals and values.

Fourth, trade agreements are negotiated situationally and with long-term interests in view, with the understanding that the US exists within an ecosystem of trade and other economic and critical political relationships. Sometimes "leaving something on the table" for other countries is an intelligent and strategic calculation. Even allowing some countries, such as less developed countries, to impose a modest tariff on US imports is not only acceptable but it is in the long-term interests of the United States. Our trade negotiators are not dolts. They are intelligent professionals who communicate across government agencies and have multiple ends in view. That is, when their hands are not tied by foolish ideologies.

Fifth, a country with a GDP that already dwarfs other nations' but that aggressively seeks to substantially increase its economic growth by any means necessary may be said to be guilty of greed, stupidity, and betrayal. Why greed? Already wealthy beyond imagination, the desire is for substantially more. Aspiration is fine, a good thing, a virtue, but greed is a vice. Why stupidity? Because it is monomaniacal, forgetting that there are multiple goods and multiple interests to consider and pursue in the international ecosystem of nations. Why betrayal? Because trade and international partners will assume you are willing to harm them, deliberately, in pursuit of your greedy ambitions. Trust will evaporate, and once gone there will be trouble down the road, as when the United States finds itself in need, such as in a terrorist attack on its soil, or when it needs the cooperation of other nations to address global challenges.

Sixth, setting aside the painful lessons we have learned about tariffs (Smoot-Hawley, inter alia), and the overwhelming economic consensus about them, will require more than the "vision" and bluster of one man, especially when it is clear that his policy is little more than a Hail Mary economic pass with little thought to support it. Is the goal of the imposition of such sweeping tariffs to retire the income tax? Well, he should have set forth a detailed plan for that during the campaign, given that such a shift in revenue sourcing would be monumental. He did not present such a detailed plan. Yes, Trump spoke favorably about tariffs and wondered out loud about getting rid of the income tax, but there was no detailed plan. He engaged instead in ad hominem attacks and rants. In essence, he lied his way into a second term, and he concealed his intent in rhetorical word salads, and the nation may never recover.

So much for the tariffs question. In my view, given that President Trump seems to be operating from very outdated principles and bad data about America’s economic power, and seems incorrigible and ineducable concerning the way the world works; since he would employ mercantilism and isolationism in a world that will never cease its march of globalization, he is an extreme danger to the country. He must be impeached once again at the earliest opportunity, but this time he absolutely must be removed from office. But he should not be the only one who pays a severe political price. His enablers should face years of investigations and hearings and, where appropriate, the harshest punishment allowed by law — not as a political witch hunt, but rather because of misconduct at the highest levels of government. And their names should be added to the rolls of history's disgraced (along with Albert B. Fall and Joseph McCarthy) — Peter Navarro (or should I say, “Ron Vara”), Marco Rubio, J.D. Vance, Lee Zeldin, and all the rest who enabled and/or misled the president to the horrendous policy decisions we have seen on tariffs, immigration, and, yes, all the rest. The pain of all of these horrendous policy decisions is now beginning to show itself, and it is going to get much worse. We’ve already seen trillions of dollars of wealth disappear from equity markets solely because of Trump’s tariff “policy.” It’s going to be a very warm spring, and a very hot summer.

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© David E. McClean, 2025. All Rights Reserved.