Donald Trump's Proposed 100 Percent Tariff On Chinese Cars Built In Mexico Would Be A Disaster

Former President and current candidate Donald Trump directed promises of potentially economically devastating tariffs toward China and Mexico during a rally at the Dayton, Ohio airport on Saturday. The twice-impeached face of the Republican party claimed that he would impose a 100-percent tariff on vehicles made in Mexico by Chinese companies, in addition to the 50 percent tariff he promised on all Mexican-made products, and up to 60 percent on all Chinese-made products. If you think inflation was bad last year, just wait until these costs are passed on to the consumer.

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Of course this came in the middle of a speech in which Trump threatened a “bloodbath” if he lost the election, said that Joe Biden beat Barack Obama, and called undocumented immigrants “not people.” So, you know, maybe he didn’t really know what he was saying. Or maybe he was just distracted by the four criminal cases he is currently facing.

Now, we’ve been in a mildly cold economic war with China for decades, so a proposed tariff on all China-made goods is probably ill advised, but not exactly surprising. These massive proposed import duties on Mexican-made goods, however, would basically invalidate the U.S.-Mexico-Canada Agreement, which is among the largest free trade agreements in the world, and which Trump signed. The isn’t scheduled to expire until 2036. Mexico is the fifth largest car-building country in the world, largely due to the success of NAFTA and the USMCA that followed.

Image: Wikimedia

During the rally, Trump directed his ire at Chinese president Xi Jinping.

“Those big monster car manufacturing plants you are building in Mexico right now and you think you are going to get that—not hire Americans and you’re going to sell the car to us, no. We are going to put a 100% tariff on every car that comes across the lot.”

Global economics isn’t a zero-sum game. The U.S. imports some half-trillion dollars in goods from China every year, and nearly as much from Mexico. If these imports were to be hit with a significant tariff, it would almost assuredly lead to a massive shift in the second- and twelfth-largest global economies respectively. These kinds of economic policies will almost certainly be devastating for China and Mexico, but potentially even worse for the U.S. with the possibility of runaway inflation and joblessness. The last time Trump imposed mild tariffs on China imports, it cost the U.S. and estimated 245,000 jobs.

Instead of imposing protectionist policies for the U.S. auto industry, keeping the less expensive and competent Chinese-built electric cars from the hands of American drivers, perhaps we should instead focus on helping our home industry succeed in the face of stiff competition. Doesn’t competition breed innovation in a capitalist society, after all?

Trump was in Ohio to offer his support of tech executive and former car dealership owner Bernie Moreno in his bid for Senate.