I have several theories. It might be any one of them, or it might be a combination.
Theory #1: He thinks his actions are putting pressure on the Chinese economy – and on their trade negotiators. Which they are, to some extent. But it’s also putting pressure on the American economy, because Brazil can sell soybeans to China. Russia can sell them wheat. Airbus can sell them airplanes. Maybe he thinks he is a smart businessman who is an expert in “the art of the deal.” He’s delusional. In the long run, he’ll hurt the American economy much more than he hurts the Chinese economy.
Theory #2: The recent tax cuts for the 1% are running up the budget deficit. Maybe Trump thinks big enough tariffs will bring in money and reduce the budget deficit. Which is stupid.
Theory #3: He’s worried about interest rates and wants them to come down. Not because lower rates will help or hurt the American economy, but because it will help him. He wants to lower the rates on his company’s loans from Deutsche Bank. This is a purely selfish motivation.
Theory #4: Trump is an idiot who truly believes that the Chinese are paying for the tariffs. That’s absolutely not true. If there’s a tariff on Chinese computers or TVs or lawn chairs or mosquito spray, American consumers will pay higher prices for those things. All of us will pay more. Or maybe Americans will buy fewer foreign goods because they cost more – and they’ll pay more for American goods (because American companies won’t have as much price competition). Some worker might have gotten a tax cut that put a few more bucks in her pocket, but if tariffs make prices go up, it might turn out to be a net loss. I think he still thinks tariffs on Mexican goods are paid for by the Mexicans. Then he thinks he can use that money to pay for a border wall. I don’t think he understands the basic rules of economics. He’s an idiot.
Theory #5: His base will believe anything he says. Fox News will tell them it’s all true. And if Democrats try to explain the economy, they’ll just shout, “That’s Socialism! We want Freedom!”
There might be other theories. Anyone have opinions about this?