I actually think many people would buy cheap small cars in the US than companies realize, at least in dense cities like New York. They are easy to park in urban places that have limited street parking.
"nobody’s going to hop into an Irish Tiguan and be terrified of a car built to EU specs." The general point is of course correct, but it's weird to pick one of the very few countries in the EU where it actually is kind of terrifying for many Americans to hop in one of their cars.
A bit tangential, but am I the only one who feels like the Trump playbook was ghostwritten by 1990s Tom Clancy? I mean, we’ve got:
*Global trade wars framed through the lens of “commonsense” reciprocal removal of trade barriers because trade deficits are inherently a ripoff;
*A weird subfocus on supposedly unfair Japanese auto inspections designed to block US autos from their market;
*A deeply suspicious and aggrieved view of our so-called-allies who are stabbing us in the back on trade yet complain if we even mildly push back;
*A fondness for our tough-but-respected former Russian opponents who should really be our ally against China (up to and including “NATO isn’t versus Russia and we should invite them into NATO, bullshit Eastern European nervousness be damned”);
*A disdainful view of the unwashed savages I mean peasants I mean Backwards Former Soviet Satellite States;
*Constant complaints regarding Europe’s inability to hold up their end of NATO;
*Overturning Roe v. Wade to “return the issue to the states”;
*A desire to finally resolve “the Middle East problem” via accords named after Jerusalem and backed by unconditional US protection and support;
*LE, Intelligence, and Defense policy focused on gutting “all the beancounters” so the “real” operators can finally get shit done without having to file a bajillion TPS Reports;
*Disdain for all those liberal arts, gender studies, and critical theory hires who have nothing to contribute to society beyond pointless and unjustified complaining…
…and I’m sure I could come up with a dozen more.
I mean, it’s probably more of a “Simpsons/South Park Did It” effect where the dude was just a very conservative and very prolific writer. But it keeps making me scratch my head.
Not saying that TPP wasn't fundamentally a good idea, but there were some valid criticisms about onerous intellectual property and arbitration provisions that could have elevated corporate power and threatened national sovereignty.
I think one solution when dealing with other developed countries such as European countries, Canada, Australia, Japan etc is to have a default assumption that if it meets their standards we can import it.
Then you would have to prove a reason why it can't be imported. Like there was a glaring defect in their regulatory regime that made the product unsafe. And these exceptions should be VERY rare.
There are contradictions in global trade that lead to questions. I know MY spoke about economics 101 but let’s face it most people don’t have a background in economics.
Unfortunately problems at the local level still exist that do require an economics background to understand. I can think of a few things off my head: why are farmers sending produce abroad when food prices are high and how should the USA prepare to be cut off from important industries and should we build these at home.
I think there’s an education element but democrats also need to answer these questions without falling back on free trade is the answer.
Maybe this isn’t the place to have these questions answered and if not then I’d like to know where.
Free trade is much of the answer, democrats should very much fall back on that. I'm not sure if you're looking for answers to your questions, or saying that democrats need to give a more full explanation of why free trade is the answer.
Why are farmers sending produce abroad when food prices are high? The things where prices are high is not on food products grown here. Corn is cheap, soy beans are cheap, wheat is cheap, Florida and California oranges are cheap. To the extent food prices are high, it's because we had an overall increase in the cost of goods (inflation) and now because we are stupidly, unilaterally making the cost of imported foods and everything else more expensive, which will make the general level of prices rise and simultaneously make nothing cheaper. if we stopped exporting corn and soy beans, avocados wouldn't become cheaper, neither would eggs, or chickens, or tomatoes. What would happen is corn and soy farmers would make less money and grow less crops, we'd need fewer truckers, fewer new John Deere vehicles and parts, and mechanics, etc., and all the businesses that supply those businesses, and all the companies that sell things to those people would also need fewer workers and less stuff, and then we're all poorer.
To the extent we will be cut off from important industries, we're the ones cutting us off. Everybody wants to sell us stuff, up until two months ago they could with little or no trouble. There are some strategic goods, like microchips, that we should, and again, until we elected an idiot, were starting to, deliberately onshore, even though it would be more expensive to make them here. For almost everything else, the reason things aren't made here is because it's cheaper to make them somewhere else and ship them here. If we force ourselves to make them here they will just cost more, we'll have less of everything, and we'll all be poorer.
In January 2025 we had an unemployment rate under 4%, that's lower than the vast majority of my six plus decades on this planet. We weren't a hollowed out shell of an economy with bread lines of unemployed workers. We had lots of problems, and not everybody was prospering equally, but what we didn't have was problems caused by too much free trade.
ETA, if the question is how do we explain this to people, I genuinely don't know. These things seem self evident to me. I grew up in a very blue collar, lower middle class town, and I think my friends and neighbors can also understand this. It would help a lot if there wasn't an entire political party devoted to lying about the basic nature life in the Untied States today purely for short term political gains. Less guilty, but also wrong, are folks on the left who also cannot grasp that things are generally going well, and also for slightly different motivations want people to believe we are worse off than we are.
I suspect that the "bowling ball test" is a misinterpretation of the pedestrian head-safety test that is applied in Japan (and, in a different variant, in the EU) and is not in the US.
A sphere (approximately the size of a bowling ball; also approximately the size of a human head) is fired at the top of the hood of the car. Meters in it detect how much impact force it takes; if the hood doesn't cushion the impact to an appropriate degree, then the test is failed. This is so that if the car hits a pedestrian at a low speed and the pedestrian folds up and hits their head on the hood of the car, the head injury is mitigated.
In fact, US cars generally fail this because the hood of most US cars is too rigid; it's not that the hood mustn't dent, but rather that it must give way (ideally, it's elastic and will spring back into shape, so it doesn't actually dent).
If you've seen the pedestrian head-safety test performed (e.g. on video) it does look like someone dropping a bowling ball on the hood, and I think that Trump has seen it, hasn't listened to the explanation and has guessed wrongly that the test is to ensure the hood doesn't dent - rather than ensuring that the head-simulator (the "bowling ball") doesn't get hit too hard.
I love that Trump was probably not trying lie about this, but ended up getting every salient point about this so wrong that he effectively ended up lying.
Our credibility is going to be a problem going forward, but prior to now a president not agreeing to a good idea wasn't seen as the same thing as a president willing to renege on agreements they had made. If Biden had been replaced by Harris, and she agreed to new adjudicators, everyone would have believed that. Going forward? Trust is hard to rebuild.
>There’s no reason to behave like this. The Trump administration needs to treat the process seriously.
It unfortunately says a lot that I have absolutely no idea what to make of this short paragraph. Who is it aimed at? What are we or they supposed to take from it?
Maybe it's worth flipping this around: who is the rest of Matt's essay for?
He can't seriously be spending all this time and effort to persuade political hobbyists who are going to forget all the details in a couple weeks. They're going to vote for Democrats anyway, even ones that take protectionist positions.
It’s aimed at independents who voted for Trump, and who would be very likely to ignore Matt if he chose a more accurate and candid description of Trump’s behavior, because such a description would SOUND LIKE partisan vitriol, because the truth of how poorly he’s behaving here is wild.
Yeah, I had the same reaction. “The Trump administration needs to treat the process seriously” is like saying “the Trump administration needs to make a round trip to the moon and back in a 1988 Buick LeSabre.”
Did anyone else notice Matt's example of the motive behind NAFTA, US corn exports? Of course any reduction in restrictions we place on imports benefits exporters, but my impression is that US agricultural interests have been better at getting our negotiators to go after foreign restrictions on US ag exports than manufacturers have been on foreign restrictions on US manufactured exports.
US embassies have Agricultural Attachés; they do not have Manufacturing Attachés.
Our tariffs and non-tariff barriers and deficits harm all non-restricted import substitutes and exporters, but becasue of diplomatic assistance and trade negotiating savvy, agriculture has been less harmed that manufacturing.
Excellent column that hints at an underlying flaw in Matt's thinking. Returning to the topic of yesterday's excellent column, he drops this aside in today's:
- "the standard Econ 101 reasons that protectionism always has some political appeal"
As I observed yesterday[1], this is backwards: we do not need Econ 101 to understand why people advocate for their interests. Rather, Econ 101's abstraction of human behavior into demand and supply is a set of old philosophical postulates that, unlike the various physical sciences, are not derived from observation and therefore do not form and integral part of the whole of modern knowledge.
I always appreciate your contributions here. In this case, I would gently note that when you write “the idea of an economy” you are making my point about deductive reasoning from postulates rather than inductive reasoning from facts.
PS the scientific status of mathematics as a whole is a fascinating and rich topic, but I do not think considering the foundations of mathematical functions sheds much light on the foundations of economic concepts, such as demand and supply
Multiplication and addition aren’t derived from observation either - they are logically defined from the idea of counting. Similarly, supply and demand are logically defined from the idea of wanting, which is essential to the idea of an economy at all.
Multiplication and addition can be tested empirically against the real world, whereas many of the foundations of macroeconomics are theoretical and unfalsifiable. That doesn't mean that they're necessarily 'wrong', but we should have an appropriate level of humility about them (which I don't see most economists having)
I think you're mixing up the idea that CAFE standards incentivized US manufacturers to continue to sell small, low mileage ICE cars even though there wasn't much profit in them in order to get their fleet average down to the CAFE standards. At the same time, CAFE standards for light trucks, which includes trucks and SUVs, are higher, and that provides some incentive for makers to build more SUVs (with lower mileage) than similar capacity cars.
Yeah, this is one of the things that gets me about a lot of mileage boasts these days -- in the 1990s I had a friend with a Honda CRX and his normal mileage was around 43 MPG.
Of course we do not need a trade deal with Europe to allow imports of the Polo or pharmaceuticals certified by their regulator agencies we can just do it. Of course trade is _mutually _ beneficial so we woud also benefit if they got rid of _their_ "unfair" non-trade barriers, but that's not a reason to hold on to our own.
The reason to try to do this as a trade _agreement_ is domestic politics. You need to mobilize the exporters and potential exporters to counter-balance the protectionist forces. The logic is the same for tariff and non-tariff barriers. It is a way to make visible the otherwise invisible harm that import cause.
I disagree with Matt largely because, while Trump did piss away the TPP: I think by the end of his term public opinion will shift back in favor of free trade. While yes Trump did cancel TPP: Hillary Clinton ran on opposing it too. Now, I've always believed she'd sign it anyway...but I think the important inference from 2016 is that free trade became unpopular. Trump's term is becoming an abject lesson in why free trade is good, and hopefully next time it sticks better.
See, while I think you are correct, the muted reaction of many national Democratic politicians to Trump's tariffs and the historical antipathy of Democrats to free trade through the late 20th Century to early 21st Century cause me to expect that, like with Biden, whatever Democrat wins in 2028 will keep substantially increased tariffs on the books even if they roll back the worst of Trump's abuses.
I would really like to think that. However, that was why I specifically mentioned not just the historical pattern, but the present reactions. Jared Polis is the only likely 2028 Democratic presidential candidate that I'm aware of having really aggressively taken a free trade position so far.
I actually think many people would buy cheap small cars in the US than companies realize, at least in dense cities like New York. They are easy to park in urban places that have limited street parking.
"nobody’s going to hop into an Irish Tiguan and be terrified of a car built to EU specs." The general point is of course correct, but it's weird to pick one of the very few countries in the EU where it actually is kind of terrifying for many Americans to hop in one of their cars.
> There’s no reason to behave like this. The Trump administration needs to treat the process seriously.
Well, do I have something to tell you Matt...
A bit tangential, but am I the only one who feels like the Trump playbook was ghostwritten by 1990s Tom Clancy? I mean, we’ve got:
*Global trade wars framed through the lens of “commonsense” reciprocal removal of trade barriers because trade deficits are inherently a ripoff;
*A weird subfocus on supposedly unfair Japanese auto inspections designed to block US autos from their market;
*A deeply suspicious and aggrieved view of our so-called-allies who are stabbing us in the back on trade yet complain if we even mildly push back;
*A fondness for our tough-but-respected former Russian opponents who should really be our ally against China (up to and including “NATO isn’t versus Russia and we should invite them into NATO, bullshit Eastern European nervousness be damned”);
*A disdainful view of the unwashed savages I mean peasants I mean Backwards Former Soviet Satellite States;
*Constant complaints regarding Europe’s inability to hold up their end of NATO;
*Overturning Roe v. Wade to “return the issue to the states”;
*A desire to finally resolve “the Middle East problem” via accords named after Jerusalem and backed by unconditional US protection and support;
*LE, Intelligence, and Defense policy focused on gutting “all the beancounters” so the “real” operators can finally get shit done without having to file a bajillion TPS Reports;
*Disdain for all those liberal arts, gender studies, and critical theory hires who have nothing to contribute to society beyond pointless and unjustified complaining…
…and I’m sure I could come up with a dozen more.
I mean, it’s probably more of a “Simpsons/South Park Did It” effect where the dude was just a very conservative and very prolific writer. But it keeps making me scratch my head.
Not saying that TPP wasn't fundamentally a good idea, but there were some valid criticisms about onerous intellectual property and arbitration provisions that could have elevated corporate power and threatened national sovereignty.
I think one solution when dealing with other developed countries such as European countries, Canada, Australia, Japan etc is to have a default assumption that if it meets their standards we can import it.
Then you would have to prove a reason why it can't be imported. Like there was a glaring defect in their regulatory regime that made the product unsafe. And these exceptions should be VERY rare.
There are contradictions in global trade that lead to questions. I know MY spoke about economics 101 but let’s face it most people don’t have a background in economics.
Unfortunately problems at the local level still exist that do require an economics background to understand. I can think of a few things off my head: why are farmers sending produce abroad when food prices are high and how should the USA prepare to be cut off from important industries and should we build these at home.
I think there’s an education element but democrats also need to answer these questions without falling back on free trade is the answer.
Maybe this isn’t the place to have these questions answered and if not then I’d like to know where.
Free trade is much of the answer, democrats should very much fall back on that. I'm not sure if you're looking for answers to your questions, or saying that democrats need to give a more full explanation of why free trade is the answer.
Why are farmers sending produce abroad when food prices are high? The things where prices are high is not on food products grown here. Corn is cheap, soy beans are cheap, wheat is cheap, Florida and California oranges are cheap. To the extent food prices are high, it's because we had an overall increase in the cost of goods (inflation) and now because we are stupidly, unilaterally making the cost of imported foods and everything else more expensive, which will make the general level of prices rise and simultaneously make nothing cheaper. if we stopped exporting corn and soy beans, avocados wouldn't become cheaper, neither would eggs, or chickens, or tomatoes. What would happen is corn and soy farmers would make less money and grow less crops, we'd need fewer truckers, fewer new John Deere vehicles and parts, and mechanics, etc., and all the businesses that supply those businesses, and all the companies that sell things to those people would also need fewer workers and less stuff, and then we're all poorer.
To the extent we will be cut off from important industries, we're the ones cutting us off. Everybody wants to sell us stuff, up until two months ago they could with little or no trouble. There are some strategic goods, like microchips, that we should, and again, until we elected an idiot, were starting to, deliberately onshore, even though it would be more expensive to make them here. For almost everything else, the reason things aren't made here is because it's cheaper to make them somewhere else and ship them here. If we force ourselves to make them here they will just cost more, we'll have less of everything, and we'll all be poorer.
In January 2025 we had an unemployment rate under 4%, that's lower than the vast majority of my six plus decades on this planet. We weren't a hollowed out shell of an economy with bread lines of unemployed workers. We had lots of problems, and not everybody was prospering equally, but what we didn't have was problems caused by too much free trade.
ETA, if the question is how do we explain this to people, I genuinely don't know. These things seem self evident to me. I grew up in a very blue collar, lower middle class town, and I think my friends and neighbors can also understand this. It would help a lot if there wasn't an entire political party devoted to lying about the basic nature life in the Untied States today purely for short term political gains. Less guilty, but also wrong, are folks on the left who also cannot grasp that things are generally going well, and also for slightly different motivations want people to believe we are worse off than we are.
I suspect that the "bowling ball test" is a misinterpretation of the pedestrian head-safety test that is applied in Japan (and, in a different variant, in the EU) and is not in the US.
A sphere (approximately the size of a bowling ball; also approximately the size of a human head) is fired at the top of the hood of the car. Meters in it detect how much impact force it takes; if the hood doesn't cushion the impact to an appropriate degree, then the test is failed. This is so that if the car hits a pedestrian at a low speed and the pedestrian folds up and hits their head on the hood of the car, the head injury is mitigated.
In fact, US cars generally fail this because the hood of most US cars is too rigid; it's not that the hood mustn't dent, but rather that it must give way (ideally, it's elastic and will spring back into shape, so it doesn't actually dent).
If you've seen the pedestrian head-safety test performed (e.g. on video) it does look like someone dropping a bowling ball on the hood, and I think that Trump has seen it, hasn't listened to the explanation and has guessed wrongly that the test is to ensure the hood doesn't dent - rather than ensuring that the head-simulator (the "bowling ball") doesn't get hit too hard.
Incidentally, one side-effect of this is that you can't have sex on the hood of European cars any more, they give way under you.
I love that Trump was probably not trying lie about this, but ended up getting every salient point about this so wrong that he effectively ended up lying.
Perhaps Trump was dropped on his head
Not hard enough, unfortunately.
Perhaps his head was used for the test and he is both damaged and resentful about the whole thing. It would explain a few things.
Didn’t Biden double down on Trump’s refusal to agree to put new WTO adjudicators? How could the US credibly commit to not do this.
Our credibility is going to be a problem going forward, but prior to now a president not agreeing to a good idea wasn't seen as the same thing as a president willing to renege on agreements they had made. If Biden had been replaced by Harris, and she agreed to new adjudicators, everyone would have believed that. Going forward? Trust is hard to rebuild.
>There’s no reason to behave like this. The Trump administration needs to treat the process seriously.
It unfortunately says a lot that I have absolutely no idea what to make of this short paragraph. Who is it aimed at? What are we or they supposed to take from it?
Maybe it's worth flipping this around: who is the rest of Matt's essay for?
He can't seriously be spending all this time and effort to persuade political hobbyists who are going to forget all the details in a couple weeks. They're going to vote for Democrats anyway, even ones that take protectionist positions.
It’s aimed at independents who voted for Trump, and who would be very likely to ignore Matt if he chose a more accurate and candid description of Trump’s behavior, because such a description would SOUND LIKE partisan vitriol, because the truth of how poorly he’s behaving here is wild.
Yeah, I had the same reaction. “The Trump administration needs to treat the process seriously” is like saying “the Trump administration needs to make a round trip to the moon and back in a 1988 Buick LeSabre.”
Did anyone else notice Matt's example of the motive behind NAFTA, US corn exports? Of course any reduction in restrictions we place on imports benefits exporters, but my impression is that US agricultural interests have been better at getting our negotiators to go after foreign restrictions on US ag exports than manufacturers have been on foreign restrictions on US manufactured exports.
US embassies have Agricultural Attachés; they do not have Manufacturing Attachés.
Our tariffs and non-tariff barriers and deficits harm all non-restricted import substitutes and exporters, but becasue of diplomatic assistance and trade negotiating savvy, agriculture has been less harmed that manufacturing.
Excellent column that hints at an underlying flaw in Matt's thinking. Returning to the topic of yesterday's excellent column, he drops this aside in today's:
- "the standard Econ 101 reasons that protectionism always has some political appeal"
As I observed yesterday[1], this is backwards: we do not need Econ 101 to understand why people advocate for their interests. Rather, Econ 101's abstraction of human behavior into demand and supply is a set of old philosophical postulates that, unlike the various physical sciences, are not derived from observation and therefore do not form and integral part of the whole of modern knowledge.
[1] https://www.slowboring.com/p/econ-101-is-underrated/comment/113054439
Hi Kenny-
I always appreciate your contributions here. In this case, I would gently note that when you write “the idea of an economy” you are making my point about deductive reasoning from postulates rather than inductive reasoning from facts.
Best, Sam
PS the scientific status of mathematics as a whole is a fascinating and rich topic, but I do not think considering the foundations of mathematical functions sheds much light on the foundations of economic concepts, such as demand and supply
Multiplication and addition aren’t derived from observation either - they are logically defined from the idea of counting. Similarly, supply and demand are logically defined from the idea of wanting, which is essential to the idea of an economy at all.
Multiplication and addition can be tested empirically against the real world, whereas many of the foundations of macroeconomics are theoretical and unfalsifiable. That doesn't mean that they're necessarily 'wrong', but we should have an appropriate level of humility about them (which I don't see most economists having)
Don't CAFE standards also make it cost-prohibative to sell very small ICE vehicles in America?
I think you're mixing up the idea that CAFE standards incentivized US manufacturers to continue to sell small, low mileage ICE cars even though there wasn't much profit in them in order to get their fleet average down to the CAFE standards. At the same time, CAFE standards for light trucks, which includes trucks and SUVs, are higher, and that provides some incentive for makers to build more SUVs (with lower mileage) than similar capacity cars.
The Polo gets over 40 mpg.
https://www.parkers.co.uk/volkswagen/polo/review/mpg-running-costs/
Most tiny cars are really efficient. I miss my Geo Metro. Well, not really, but it's mileage was great.
Yeah, this is one of the things that gets me about a lot of mileage boasts these days -- in the 1990s I had a friend with a Honda CRX and his normal mileage was around 43 MPG.
Efficiency gains almost always go towards bigger cars/more features, not better MPG. That’s why the number mostly stays flat over time.
Of course we do not need a trade deal with Europe to allow imports of the Polo or pharmaceuticals certified by their regulator agencies we can just do it. Of course trade is _mutually _ beneficial so we woud also benefit if they got rid of _their_ "unfair" non-trade barriers, but that's not a reason to hold on to our own.
The reason to try to do this as a trade _agreement_ is domestic politics. You need to mobilize the exporters and potential exporters to counter-balance the protectionist forces. The logic is the same for tariff and non-tariff barriers. It is a way to make visible the otherwise invisible harm that import cause.
> But it really is good to have access to foreign markets and a more integrated economy!
Yes, a thousand times yes.
And therefore, while the Pacific is a grand ocean and a Trans-Pacific partnership is wonderful, lets not leave the other oceans behind. May I suggest:
1. TAtlanticP
2. TIndianP
3. a second TAP (given our newfound love of including Penguins in trade; ok there are no Penguins in the arctic but there are Polar Bears), and
4. a third TAP (this time to properly account for the Penguins in the antarctic).
Will no one think of the penguins???
I disagree with Matt largely because, while Trump did piss away the TPP: I think by the end of his term public opinion will shift back in favor of free trade. While yes Trump did cancel TPP: Hillary Clinton ran on opposing it too. Now, I've always believed she'd sign it anyway...but I think the important inference from 2016 is that free trade became unpopular. Trump's term is becoming an abject lesson in why free trade is good, and hopefully next time it sticks better.
"Trump's term is becoming an abject lesson"
Excellent typo: I approve.
See, while I think you are correct, the muted reaction of many national Democratic politicians to Trump's tariffs and the historical antipathy of Democrats to free trade through the late 20th Century to early 21st Century cause me to expect that, like with Biden, whatever Democrat wins in 2028 will keep substantially increased tariffs on the books even if they roll back the worst of Trump's abuses.
Before Trump free trade was Republican orthodoxy. There’s no reason Democrats can’t change as much
I would really like to think that. However, that was why I specifically mentioned not just the historical pattern, but the present reactions. Jared Polis is the only likely 2028 Democratic presidential candidate that I'm aware of having really aggressively taken a free trade position so far.