President Donald Trump is wholly justified for taking on China’s unfair trading schemes and economic imperialism. But like any war, it will not be pain-free.
In response to Trump’s new 20% tariff on imports from China, the People’s Republic has imposed retaliatory tariffs on American farm products, blacklisted 15 U.S. companies, and completely cut off lumber imports.
Businesses that import Chinese goods will pass those costs onto American consumers. Businesses that sell their products to China may have to lower their prices or find new buyers. And anyone with a 401(k) or stock portfolio is already feeling the sting of the stock market losses these actions have incurred.
These developments offer Democrats an obvious line of attack: “Republicans ran on ‘Bidenflation,’ then raised prices on American families. Vote them out and we’ll kill the tariffs.”
Treasury Secretary Scott Bessent offered a bold response in a recent speech to the Economic Club of New York. “Access to cheap goods is not the essence of the American dream,” he said. “The American dream is rooted in the concept that any citizen can achieve prosperity, upward mobility, and economic security. For too long, the designers of multilateral trade deals have lost sight of this.”
Bessent is correct. When Presidents Bill Clinton and George W. Bush established free trade with China, there was hope that this would bring China into the market economy and away from militant communism. That did not happen, but the harm to American manufacturing and the communities it sustained turned out to be far worse than anyone suspected. The Democrats’ response to this economic devastation was to charge the winners higher taxes and compensate the losers with government handouts.
A quarter century later, their plan has worked. According to the Economic Innovation Group, between 2000 and 2022, the share of U.S. counties that drew more than a quarter of household income from government programs rose from around 10% to over 50%. The brightest minds from these (mostly rural) counties increasingly flee to big cities, leaving their hometowns even worse off. “Deaths of despair” from alcohol, fentanyl, and suicide have skyrocketed.
Democrats love to gloat about how wealthy blue states and cities “subsidize” these Trump-voting “welfare queens.” What they’re less willing to admit is that these communities’ dependence on government programs is a direct result of the neoliberal trade policy both parties pursued until Trump came along.
Rather than end the tariffs, which are sorely needed to reverse decades of wrongdoing, Trump is using traditional conservative tactics more boldly than any of his predecessors to tackle their potential inflationary effects.
Cutting agencies such as the United States Agency for International Development and the Department of Education, eliminating former President Joe Biden’s counterproductive and misguided green energy policies, and ending the expansion of the welfare state that occurred under COVID-19 will lower the deficit, interest rates, and inflation, which all hurt middle America and make us weaker.
Rolling back regulations will also create jobs, spur economic growth, and make our companies more competitive. At the end of his first term, Trump boasted that he had cut eight regulations for every new one. This time around, he’s going for a 10:1 ratio.
Reforming the permitting process for new oil, natural gas, and nuclear projects will drive down the cost of energy, which in turn will drive down the cost of just about everything. It will also reduce dependence on foreign energy, which is important when considering Ontario Premier Doug Ford recently imposed a 25% surcharge on electricity exports to the U.S. in response to Trump’s tariffs. Ford should never have had that leverage in the first place.
Trump’s antitrust enforcers returning the U.S. to the consumer welfare standard — the Biden-revoked standard that ensures the federal government only blocks mergers and acquisitions that harm consumers — will also lower prices for American consumers while making it easier for U.S. companies to compete with China.
The Trump Department of Justice should start by ending the challenge to the Hewlett Packard Enterprise-Juniper merger, a deal that would create an American telecommunications giant capable of competing with state-subsidized Chinese juggernaut Huawei (which has 30% of the globe’s telecom and 5G market share, far more than any U.S. company). Huawei’s dominance is an issue because Congress and the Department of Defense have stated the company’s tech has backdoors that can be exploited by the Chinese Communist Party. Attorney General Pam Bondi and Antitrust Division chief Gail Slater allowing more competition with Huawei would slow the expansion of Chinese soft power in the developing world, undercutting the country’s quest for military dominance through 5G and tech dominance.
MANUFACTURERS PLEDGE TO INVEST BILLIONS OF DOLLARS IN US AHEAD OF TRUMP TARIFFS
Congress and the administration will need to rebuild our industrial base and reorient the U.S. economy more toward production that creates family-sustaining jobs, an audacious goal that won’t be possible without a little short-term disruption.
When the Consumer Confidence Index dips and Republicans start getting spooked, they should remember that blue-collar Americans gave them a mandate to make their lives better. These people don’t want cheap Chinese trinkets. They want good jobs, stable families, and thriving communities. It’s time to give them what they voted for.
Rick Santorum served as a U.S. senator from Pennsylvania from 1995 to 2007.