Rahm Emanuel’s critique of President Trump’s trade policy in an op-ed in the Wall Street Journal leaves a few questions unanswered. Here’s his alternative to what he describes as a policy of “losing friends and alienating allies”:
First, trade Mr. Trump’s tariff wall for an “economic bloc of common interest.” The U.S., the European Union, Latin America and Indo-Pacific allies should set one common external tariff on subsidized overcapacity: steel, aluminum, autos, batteries, solar equipment and so on. Then drop tariffs inside the bloc. Nobody beats overcapacity unilaterally.
Second, compete where the game is decided: markets. As ambassador to Japan, I watched Beijing ban every scallop and fish Japan exported. Mr. Xi’s move wasn’t about food safety. The Chinese wanted to damage a key Japanese industry. Tokyo was able to withstand China’s coercion because Washington helped it find alternative markets.
Third, treat each ally’s industrial base as part of America’s portfolio of security assets. In April 2025, Britain’s Parliament was recalled on a Saturday to stop the Chinese owner of its last two blast furnaces from letting them go cold. This was the first time since the 1982 Falklands War that legislators were asked to convene on a Saturday, reflecting the depth of Downing Street’s concern. British steel—like Korean semiconductors and Japanese shipyards—buttresses America’s security in the event of a conflict with China. Economic statecraft should support national-security interests.
I think he’s leaving at least two questions unanswered. First, how do you reconcile the Democratic complaints about “affordability” with raising prices with tariffs whether we do it in a bloc or not?
There is no reason to believe that steel, batteries, solar equipment, or automobiles produced in the United States or other members of Emanuel’s bloc will cost as little as subsidized Chinese production. Indeed, preventing Chinese subsidies from driving competitors out of business is the point of the tariff. Economic security has a price. How much are we prepared to pay for it?
Second, what if the European Union, Latin America, and the Indo-Pacific fear and dislike the United States more than they do China? There is ample evidence going back 200 years that is the case. Do we have friends and allies? I don’t think we do. I think we have trading partners, clients and competitors.
An ally is someone with whom you cooperate. A client is someone whose security you guarantee. The two categories can overlap. The mistake is assuming that because a country is an ally, dependence on that country’s industrial capacity is equivalent to domestic capacity.
If Japan withdrew from its security relationship with the United States tomorrow, would the United States remain a viable independent great power? Obviously yes. If the United States withdrew from Japan tomorrow, could Japan confidently guarantee its security against China and North Korea? Much less obviously.
My view is that President Trump is right and wrong at the same time. He’s right that we cannot depend on China for strategic goods which includes steel, autos, batteries, solar equipment and so on. He was wrong to impose tariffs on Canada, the European Union, Latin America, and the Indo-Pacific.
Mounting a tiger provides three alternatives. By far the best, least risky, and cheapest is not mounting the tiger in the first place. Unfortunately, we mounted the tiger more than 30 years ago. Alternatively, you can be prepared to endure the pain and damage you will absorb when you dismount or you can just keep riding. Choose carefully.
“He’s right that we cannot depend on China for strategic goods which includes steel, autos, batteries, solar equipment and so on. He was wrong to impose tariffs on Canada, the European Union, Latin America, and the Indo-Pacific.”
Could you expand on that?
The strategic part is easy. Its the mercantilist part that is hard, be it China, Canada, the Eu etc. Is a benefit to US consumers for cheaper iphones, 1000″ TV’s, toys or sneakers worth the decimation of the US manufacturing base and worker in myriad small towns across America, and all the attendant problems? Can we really not compete in machine tools if China or Germany does not subsidize their guys?
I admit a bias. I’ve spent the majority of my career taking family run US businesses and turning them into professionally run US businesses. We have scars. But by and large we have succeeded. My experience suggests that the answer to my last question in the paragraph above is “of course we can compete.” But in the face of raw opportunistic mercantilist trading partners it is hard. IMHO if the environmentalists, regulatory zealots and free trade purists would get out of the way we would have a far healthier country, and the income inequality issue would fade into the night. As would the “too many financial workers complaint.”
I say this a true blue University of Chicago grad. But doctrinaire positions are dangerous. I once heard Milton Friedman argue that a foreign country’s subsidy was basically a gift to US consumers. I think he errs in that he forgets a US worker; no gift for you.
Tariffs as a concept bad? Sure. Tariffs as a weapon to make mercantilists behave, no.
I found Trump’s tariffs ham fisted, but that’s government. Look at what Clintons WTO position did to devastate the US. The two aren’t even close.
Our three biggest trading partners are Mexico, Canada, and China. Trade with China, especially for electronics (which is much of our trade with China) makes us dependent on China. Like it or not our whole society is intertwined with those of Canada and Mexico. We can handle co-dependency with Canada and Mexico. Everything else is a rounding error.
And then there’s the classic neoliberal argument: tariffs fall hardest on the country with the higher tariffs. The reason for restricting China is geopolitical, not economic.
Completely agree on China. Bigger fish at play.
But is it so inevitable/intertwined that Canada and Mexico can play beggar thy neighbor? Especially with Mexico being a narco state. We have no domestic
agribusiness, no lumber, no mining opportunities? Canada has super cows? We end up subsidizing ag anyway. We end up paying for Canadas policy. It boggles the mind.
I understand viewing the next door neighbors as family. But I doubt you would look kindly on your neighbor tapping your water, gas, electric and sewer lines. Intertwined? Look the other way? Probably not.
Maybe you attack the issue more elegantly, but as government diddles US workers suffer. And the lobbyists get paid royally, and the pols have nice dinners at The Palm, among other things.