Dark Times for Guac Lovers

You get a trade war! And you get a trade war! And you get a trade war!

If you’re an enthusiast for cartoonish, naked graft and you weren’t getting your fix in post-Trump Washington, have we got a great story for you, per the New York Times:

President-elect Donald J. Trump’s legal team found evidence that a top adviser asked for retainer fees from potential appointees in order to promote them for jobs in the new administration, five people briefed on the matter said on Monday. Mr. Trump directed his team to carry out the review of the adviser, Boris Epshteyn, who coordinated the legal defenses in Mr. Trump’s criminal cases and is a powerful figure in the transition. . . .

According to the review, Mr. Epshteyn met with Mr. Bessent in February, at a time when it was widely known that he was interested in the Treasury post, and proposed $30,000 to $40,000 a month to “promote” Mr. Bessent around Mar-a-Lago, Mr. Trump’s estate in Florida.

Only the best people! Happy Tuesday.

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(Photo by Brendan Smialowski / AFP via Getty Images.)

Trade Wars Are Good, And Easy to Win

by Andrew Egger

In retrospect, it was a bad sign that Donald Trump kept such a surprisingly low profile over the last few weeks. He lured us into a false sense of security, as though what really mattered was the freak machine of RFKs Jr. and Pete Hegseths he was standing up to run the government. For a moment there, we could console ourselves with the idea that at least four Republican Senators, if they chose to, could keep all that from going too far off the rails.

But there’s only so much you can do to hedge against the big guy himself. And last night he surfaced unexpectedly, like the shark in Jaws, to make a major announcement: The trade war against Mexico, Canada, and China—our three biggest trading partners—starts on Day One.

“On January 20th, as one of my many first Executive Orders, I will sign all necessary documents to charge Mexico and Canada a 25% Tariff on ALL products coming into the United States, and its ridiculous Open orders,” Trump posted on Truth Social, where we can expect all major U.S. trade policy decisions to appear for the foreseeable future. “This Tariff will remain in effect until such time as Drugs, in particular Fentanyl, and all Illegal Aliens stop this Invasion of our Country! Both Mexico and Canada have the absolute right and power to easily solve this long simmering problem.”

Trump added that China would be hit with a 10 percent tariff as well.

There’s a lot going on here, but start with the bottom line. America just decided to put a corrupt, felonious, autocrat-admiring, expertise-allergic coupster back in the White House, primarily for one reason: Prices were too high. Joe Biden, you see, had presided over a roughly 20 percent increase in prices (and a 20 percent increase in wages to go with it, but who’s counting?).

Trump’s Day One plan for that mandate: Brand new instant price hikes in the form of taxes on imports. (So much for the free-trade agreement Trump negotiated during his first term, the United States-Mexico-Canada Agreement, being one of the greatest trade deals in history.)

What can you say? It’s not like Trump has been subtle about his protectionist plans. In fact, “Trump will do major tariffs” is pretty much the safest bet you could have made about the incoming administration, right up there with “Trump will be mean to his enemies” and “Trump will watch a lot of TV.” He’s a lifelong tariff enthusiast who sparked trade wars throughout his first term and who repeatedly said on the campaign trail his only trade-related regret was not tariffing harder.

And yet much of the world just ignored all this. Traders, as Fortune magazine noted last week, seem to have taken Trump’s campaign-trail tariff talk as nothing but bluster: “We think the president-elect should be taken seriously” about tariffs, Barclays suggested, “but not literally.” Yesterday’s announcement sent global markets sagging. Whoops!

How much price pressure these tariffs will generate is tricky to assess: Global markets are a complicated machine, and monkeying with them always has unintended consequences. The Budget Lab’s Ernie Tedeschi estimates that the tariffs’ first-stage impact—not pricing in retaliatory tariffs from other countries and other effects—would be an across-the-board rise of 0.75 percent on consumer prices, “the equivalent of -$1,180 per household in average 2023 after-tax income.” That’s a lot of eggs.

As in Trump’s first term, these tariffs will supposedly be pegged to extraneous policy aims: limiting both migration and fentanyl. This is meant to give them a fig leaf of authority—most of the statutes that allow the president to impose tariffs unilaterally require that they be for one of a few specific purposes—and to give Trump and his supporters a line of defense when the economic pain he currently insists won’t happen does, in fact, happen. I don’t know how many Trump-supporting farmers I interviewed during his first term who were taking his first pointless trade war with China on the chin, but were bucking up and supporting him anyway, because they’d been told the trade war was so important for our national security. (It helped that he eventually started giving them annual multibillion-dollar bailouts.)

In this case, though, that fig leaf is particularly laughable: Canada gets a 25 percent tariff until Mexico snaps its fingers and makes all our immigration and drug trafficking problems go away?

Of course, that won’t stop the dumbest people alive from insisting this is all still just a galaxy-brained feint. Can’t you see that’s why Trump is announcing these tariffs in advance—to give Canada and Mexico time to “fix” the problem!

Maybe those countries will really scramble to take new actions against drug smuggling; maybe they’ll at least try to look busy doing so. And maybe that’ll be good enough for Trump to spike the football and lift the tariffs: Promises made, promises kept. Or maybe Trump—who, as we are going to keep pointing out, genuinely loves tariffs and thinks they’re great for the U.S. economy—is giving our trading partners unattainable benchmarks as an excuse to keep trade barriers on for the long term. Either way, the ride is getting a lot less fun.

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Reading Trump’s Mind

by William Kristol

MAR-A-LAGO, FLORIDA—How about that tariff announcement? I still got the touch. I still got the magic.

Can you believe what the fake news had been saying?

Oh, Bessent at Treasury is reassuring the markets. Oh, Bessent will be the adult in the room! Oh, thank God Bessent’s there. . . .

Are you f**king kidding me? Who is Scott Bessent, anyway? Some Soros guy who finally got on board, and groveled and promised he’ll do whatever I want at Treasury!

Bessent was telling all his buddies on Wall Street and at CNBC that he had things under control. Ha! Welcome to Trump world, Scottie! I’m the only one who has things under control. I’m the  f**king adult in the room. I’m in charge.

Gotta remind these guys who they work for. Lil’ Marco too. He was telling people he was going to “take the lead” on Central and Latin America. Ha! He got blindsided by the tariffs—just like Scottie did.

Scavino told me those Bulwark creeps were going on yesterday about how I’d kind of disappeared for the last week or so a and was maybe looking kind of weak.

I gotta say, they were right that it was time to step back into the limelight.

So I did. With tariffs. I love tariffs. And the public likes tariffs.

So they’re not the exact tariffs I ran on. But you know what? I don’t do what the staff tells me. Screw campaign promises. Screw the staff. I do what I want to do, and I do it when I want to do it.

That’s the whole point. Gotta remind the American people of that. I alone can fix it!

But also gotta remind my own people, to keep them in line.

And I gotta remind others. Like those Republican senators who think they have power. Those guys don’t like tariffs. All their donors are squealing this morning. And you know what the big-shot senators, from Thune on down, are telling them?

I’m sorry. I’m concerned, too. I didn’t know it was coming. I didn’t get a heads up. No, my buddy Marco didn’t get a heads up either. Nor did Scott. Yes, I’ll do my best. But, you know, there’s not much I can do? Trump has the power.

Goddamn right I do.

Later on, I can decide whether to suspend the tariffs right after announcing them and let Bessent and Lutnick negotiate. Then we announce some progress on the border and drugs, and declare victory. Sort of like that USMCA “victory” we had after blowing up NAFTA in the first term.

Or if Mexico and Canada really want to fight, I’ll have plenty of political support here at home. Caravans! Fentanyl! China colluding with Canada and Mexico! Those are good issues for the early weeks of the administration. Good luck to Democrats attacking me on that.

Meanwhile, right now, this should help everyone forget about the Gaetz withdrawal. I had to dump him, and I did. But that Gaetz thing hurt me more than I thought it would. Made me look kind of weak. Had to get that out of the news. Now I’m back in the spotlight, and I’m fighting drugs and immigrants and China, and I’m in charge.

In charge. That’s me.

They say America First. Gotta remind everyone what that really means: Trump First.

[VOICE INTERRUPTS]

What’s that? Bessent’s on the phone?

Tell him I’ll get back to him. In a few days.

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Mea Culpa: Yesterday, we incorrectly identified Robert F. Kennedy Jr.’s anti-vaccine nonprofit, Children’s Health Defense, as the Children’s Defense Fund. We imagine this is the kind of error that rankles the actual Children’s Defense Fund, a D.C.-based child-advocacy nonprofit; we regret the slip!

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Quick Hits

GOODBYE TO ALL THAT: Just like that, the federal criminal cases against Donald Trump for his attempt to overthrow the 2020 election and his indefensible hoarding of classified material at Mar-a-Lago are over. Special counsel Jack Smith, who reportedly intends to resign before Trump takes office, filed motions yesterday to drop all charges against the president-elect.

Over in Trump world, the debate rages over how extensively Trump should retaliate against Smith for daring to bring charges against him—and how broadly he should cast his net. The MAGA writer and January 6th truther Julie Kelly wrote earlier this month that “a Trump DOJ should haul before a grand jury everyone from Biden’s general counsel Jonathan Su to deputy attorney general Lisa Monaco and top NARA officials involved in the scheme. Conspiracy to defraud, anyone?”

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TARIFF CHICKEN STARTS TODAY: Don’t you love to see our allies determining we’re no longer reliable trading partners? Politico reports that the United Kingdom is prepping retaliatory tariffs against the United States, just in case:

The British government has been wargaming how to respond to potential Trump tariffs on U.K. goods, with officials briefing ministers that they can repurpose former EU measures against the U.S. without any need for further investigation.

The U.K. carried over tariffs from the European Union after Brexit that were placed on U.S. goods during Trump’s first term as retaliation to the then-president’s sweeping tariffs on European steel. POLITICO reported last month that the EU has a similar package of measures ready to go this time around.

Say it with us again: Trade wars are good, and easy to win.

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MOVEMENT TOWARD CEASEFIRE?: While the war on Hamas in Gaza continues, we may see a cessation of hostilities on Israel’s second front today: The cabinet intends to vote on a ceasefire deal with Lebanon, where Israeli forces have been warring with Hezbollah since September. CNN reports that Israeli Prime Minister Benjamin Netanyahu has approved the plan “in principle,” while a Lebanese official said a ceasefire was expected within 24 hours. Israel’s putative aim in the conflict with Hezbollah is allowing internally displaced Israelis to return to the north of their country. The fighting has killed thousands and displaced more than a million people within Lebanon.

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