Trump's tariff obsession is only getting worse | Fareed's Take

Here's my take.For those who thought the Supreme Court had ended Donald Trump's obsession with tariffs, think again.In February, the court struck down his sweeping Liberation Day levies, ruling that the president did not have emergency powers to tax imports from almost every country on Earth.Trump's response has been to search the statute books for ever more unusual, obscure, and maybe illegal ways to restore very similar tariffs.First came a temporary global tariff.When that expired, the administration imposed tariffs of 10 to 12 .5 % on 60 economies, more than 80 countries, claiming unfair trade practices.

For Canada, Trump reached back to Section 338 of the Smoot -Hawley Tariff Act of 1930, a provision that had never been invoked before.For the new sweeping tariffs, the rationale, discovered suddenly in the last few months, is alleged forced labor.The administration has declared that countries ranging from Cambodia and China to Norway, Japan and Australia have failed to keep products made with forced labor out of their markets, and that this failure burdens American commerce.The charge is so obviously spurious and sweeping.Sweden is as bad as Cambodia that it gives away the game.It was almost certainly devised because the White House needed a legal pretext to subvert the spirit of the Supreme Court ruling against Trump.

This is more than ordinary political spin.The president appears to be ordering the U .S.government to formally certify as fact something it knows is not true.Agencies must now publish findings, construct legal arguments, and affix the authority of the American state to a falsehood manufactured for the apparent purpose of evading the nation's highest court.That is how institutions are corrupted.

First they are asked to bend the truth.then to attest to the lie, and then the lies become routine.So no one thinks they are even unusual.It is the road to Orwell's world.Incidentally, Walk Free, the human rights group that compiles the Global Slavery Index, estimates that America imports $169 .6 billion worth of goods annually that are at risk of being made with forced labor, by far the highest total among the group of 20 countries.That does not prove American enforcement is worse than that of other countries that Trump has targeted, but it makes the administration's moral posture look even more absurd than it is.

The economic case against tariffs is stronger by the day as the numbers roll in.Spending on manufacturing construction, which surged under Joe Biden and peaked at about $250 billion at an annual rate in September 2024, had fallen to about $175 billion by May of this year.Manufacturing employment is down roughly 75 ,000 jobs since Trump returned to office.Factory output has risen, but the gains are concentrated in advanced manufacturing and AI, much of it reflecting investments planned before Trump took office and little related to tariffs.Consider Greg Fraley, whom the U .S.

Chamber of Commerce wrote about a few months ago.He helps run Falco, a small Arizona company that makes aluminum parts for commercial aircraft.This is precisely the kind of business Trump says he wants to help, an American factory employing American workers.Falco's aluminum costs are up 72 percent.The company cannot simply buy American metal.Domestic production meets only about half of U .

S.demand and much of that output is not available on the open market.SoSo Falco keeps importing aluminum, pays the tariff and absorbs the damage.It has frozen hiring, postponed expansion, allowed its workforce to shrink by at least 20 percent through attrition, dipped into cash reserves and added a tariff surcharge to customer bills, according to Fraley.Meanwhile, even after the so -called Liberation Day fallout, Trump doubled the tariff on imported aluminum to 50 % and recently offered producers a discount if they built smelters in America.

Rio Tinto, one of the world's largest aluminum producers, immediately said no.So the tariff has achieved a trifecta.Higher costs for an American manufacturer, fewer jobs and less investment there, and no new smelter from the foreign producer the tariffs were meant to entice.The logic is upside down.Aluminum smelting accounts for only a small fraction of America's aluminum jobs.The vast majority are in recycling and in the midstream and downstream industries that turn the metal into aircraft parts, cars, cans, machinery, and building materials.

Trump is protecting the tiny upstream slice by taxing the vastly larger industrial base that depends on it and employs many more people.For eight decades, the U .S.led the world toward open markets and open trade.In barely two years, Trump has transformed it into effectively the most protectionist major advanced economy in the world.The result has not been a manufacturing renaissance.

It has been higher prices, weaker investment, fewer manufacturing jobs, and a government increasingly willing to make falsehood official policy in order to defend a failed economy.creed.

And now for the last look.For nearly three months, Hungary has been undergoing what its new prime minister has called regime change.In April, Péter Márdyar defeated right -wing populist incumbent Viktor Orbán in a landslide.But as Márdyar is now finding out, winning at the ballot box was the easy part.It is far harder to dismantle the whole system of Orbánism that the strongman spent 16 years building, especially if you want to play by democratic rules.Until this year, there was a sense of permanence to Viktor Orbán's rule.

Since 2010, he had swept four elections, rewritten the Constitution, packed the courts with loyalists, and according to some watchdog groups, handed some 80 percent of the media to his friends.By 2014, he was proudly calling Hungary an illiberal state.Many believed that no opposition could realistically defeat him.That changed this year when Madyar, a fellow conservative and former member of Orbán's Nationalist Party Fidesz, united the opposition around a patriotic vision of Hungary.Today, Madyar is trying to undo the damage Orbán did.His government calls the changes Operation Cleansing Fire.

Madiar has fired Orbán loyalists from major state companies, including state TV, in a purge that he compares to rooting out the Italian mafia.Last month, Hungary's parliament amended the constitution to force out the pro -Orbán president of the nation.He was in a largely ceremonial role, but he could have slowed down the new government's agenda.Madiar has also been giving tours of the lavish, publicly funded offices of his predecessor,including gold -plated bathrooms.He put them on social media to show the country what he calls the former regime's Great Gatsby lifestyle.

But moving forcefully means making uncomfortable choices.The political scientists Stanley Bill and Ben Stanley say that to undo an autocrat's damage, a new government must do three things.Act quickly.effectively and legally.But rarely can it do all three.They use Poland as a warning.

In 2023, that country voted out the right -wing populist Law and Justice Party.After eight years in power, Prime Minister Donald Tusk's new centrist coalition promised repair.He played strictly by the rules, but thus sacrificed effectiveness.Lacking a big enough majority in Parliament, his reforms were stalled by the vetoes of two populist presidents.Hungary faces a different problem.Madhya's TISA party now has a two -third supermajority.

That's the same dominance of parliament that Orbán once used to remake the country his way.Madhya has pursued speed and effectiveness, but this comes at the cost of due process.For example, Human Rights Watch has criticized Madhya for how he removed former President Solyok, by rushing to rewrite a line in the constitution rather than a formal impeachment process.the group labeled the move as reminiscent of the Fidesz era, an echo of Orbán's old playbook.To his credit, Madiár has passed a bill to cap a prime minister's term to eight years, constraining himself or any future ordocrat.But as Daniel Hagedusz of the Institute for European Politics warns, Hungary's future now depends largely on one single man limiting his own authority.

If we need to build a systemof political power based on self -constraint, then we are practically building a sandcastle.Constitutional scholar Kim Lane Sheperly observes that since the fall of the Berlin Wall, no country has reversed populism for more than five years without the populist pendulum swinging back.A strongman's movement usually outlives him and can survive as an alternative ecosystem of media, donors, and loyal courts.When President Trump lost in 2020, Trumpism came back stronger in 2024.Hungary, though, could be a rare exception of democratic repair.

This is because of the breathtaking speed at which Orbán's coalition appears to be vanishing.Many of its leaders are already quitting, defecting, and leaving the country.In the coming months, Madyar has said he will begin to draft Hungary's new constitution, which will be put to a public referendum.This will be the clearest test yet of what Madyar calls regime change, whether he can really build institutions strong enough to prevent a return of urbanism while also having the discipline to limit his own powers.If he does, he will have given Hungary a second democratic revolution.