Economist and author Richard Baldwin tells Becky Anderson that President Trump’s tariff blitz isn’t economic strategy, but rather grievance policy and the president’s way of striking back at his perceived victimization of the U.S. by foreign global elites.

Washington

Donald Trump has signed an order to impose tariffs imports into the U.S. from countries including China, Mexico and Canada.

Global Tariffs

Economist and author Richard Baldwin has described President Trump's approach to tariffs as a grievance policy rather than a coherent economic strategy. Baldwin argues that the tariffs are intended as a response to what Trump perceives as the victimization of the United States by foreign elites, rather than being based on traditional trade policy objectives.

Baldwin further contends that these tariffs are contributing to higher retail prices in the US, a point disputed by the White House. He cites forecasts from institutions such as the Federal Reserve, Goldman Sachs, the World Bank, and the IMF, all of which predict increased inflation linked to tariffs. Baldwin emphasizes that the impact is most directly felt by consumers through higher prices on everyday goods, many of which are imported from China and Southeast Asia.

Trump promises more tariff letters coming

Well, my next guest has this to say about the US president's latest moves on trade and tariffs. Quote, Trump is just crazy if you actually think that what he's doing is trade policy, exclamation mark. But we shouldn't think of it like that. Think about it as a grievance and it all makes sense. Well, we're joined now by Richard Baldwin. He's a professor of international economics, expert in global economic policy and theory. He's also the author of The Great Trade Hack, how Trump's trade war fails and the world moves on. Richard, good to have you. Let's talk about what you mean by grievance. Good to be here, Becky. You also write in your book, The Great Trade Hack, how President Trump's tariff blitz is an economic strategy. It's grievance policy. Just explain what you mean by that, sir. Sure. So anytime an economist gets on and starts talking about trade policy of Trump, they talk about erratic, chaotic, self-defeating. And that's because they're thinking about it as if it was designed to be a trade policy to do something. What it is, I believe, is it's a way of striking back at what Donald Trump views as the victimization of America, that somehow the US has been taken advantage of by foreign globalist elite, and these tariffs are a way of striking back and standing up for the American middle class. They have an emotional resonance. They have a sort of emotional logic to them, which makes perfect sense. For example, you really shouldn't be listening to the words he says. So Donald Trump uses words to express his emotions, to sort of express how he's feeling, what his urges, what his gut instincts are. And sometimes he uses words that have numbers in them in order to express these feelings. But the next week, the next hour, the next month, those numbers could be entirely different. So I think we've got to focus on the emotional intent of what he's doing, which is assuaging a deep sense of grievance that he thinks America has with the trading system. Fascinating. You tweeted this after President Trump extended today's deadline until August the 1st. Quote, why did President Trump check it out yesterday on the deadline pushed to 1st of August and on the rates substantially reduced, you say, question mark, because tariffs are pushing up retail prices. That can't be good for his base, you say. Look, the White House categorically refutes the fact that tariffs are driving prices higher. In fact, they've said the odds of tariff related inflation are low like pandemics and meteors, both of which, by the way, we've seen in the United States of late. And I just wonder, though, I get where you're going with this. I just wonder whether the base is really bothered about tariffs and trade at this point. They're bothered about immigration. We can see there are schisms when it comes to the big, beautiful bill, as it were. And we know that they have a problem with forever wars. Are they really that bothered about tariffs and trade? Should the White House be that bothered? Well, so that's the second part of what's motivating. He doesn't want to hurt the base. But the idea that that prices aren't going up is just completely false. If you look at the Federal Reserve, any of the major banks like Goldman Sachs or the World Bank, the IMF, they're all forecasting higher inflation. And you can actually even see it in retail prices. There's been research on that. But that kind of increase in cost of living, don't think about it as inflation, because those are tiny numbers. What it is, is how much more are you paying for the stuff you buy every week in Walmart or on Amazon? And a very large share of that stuff is coming from China or Southeast Asia, and the tariffs are starting to move up the price.

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State of Rio de Janeiro

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Trump promises more tariff letters coming

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