On the Craziness of Trump 2.0

It's much worse than version 1.0

Friends,

Given the amount of time I’ve devoted to hand-wringing following Donald’s Trump’s return to the White House, I’d vowed to steer clear of the subject in my writing. But a recent pre-dinner conversation of commiseration with two very close friends made me wonder whether writing about Trump 2.0 might prove cathartic.

Here’s hoping.

Rajan

I don’t know how you’re feeling, but though it’s been barely two weeks since Donald Trump’s inauguration, I’ve been in a state of denial. Sometimes I try to convince myself that none of what we’ve witnessed in so short a time is real—that I’ll wake up one morning and it will all turn out to have been a bad dream. And that’s me on an optimistic day.

Consider some of what has happened so far.

Trump has issued a blizzard of executive orders—dozens of them—covering an array of public policy matters. Many have either been blocked by the courts or are in abeyance pending the resolution of lawsuits filed by sundry civic groups.

Then consider some of the bizarre confirmation hearings we’ve witnessed.

Pete Hegseth, Trump’s nominee to head the Department of Defense, has no experience—none—running an organization of any substantial size, let alone one with more than two million employees, civilian and military. Episodes in Hegseth’s personal life would, in better days, have doomed such a nomination. Yet virtually all GOP Senators sang his praises. The Republican Party has become a religious cult that treats every word or deed of the supreme leader as sacred.

Trump’s pick to head the FBI, Kash Patel, has vowed to use the nation’s most powerful investigative agency to go after the President’s enemies. Add to that some of Patel’s crazy claims. Mind you, these weren’t lines he used while appearing in a comedy show.

Robert F. Kennedy, Jr., whom Trump has decided should run the Department of Health and Human Services, holds a number of beliefs that completely contradict settled science or are pure nonsense.

Then there’s Elon Musk, whom some have taken to calling President Musk given the apparently limitless sweep of his authority. Musk’s Department of Government Efficiency (DOGE)—a name worthy of George Orwell’s 1984—has been taking the meat axe to government regulations that have been put in place over decades. Musk has acted without any discernible plan. Worse, given his extensive business empire, he likely has glaring conflicts of interest.

Now let’s turn to what I want to focus on: Trump the “Tariff Man”—his words.

Trump has reduced the roots of America’s persistent trade deficit, $1.1trillion in 2024, to the wiles of sneaky foreigners who are flooding the country with cheap goods that bankrupt our businesses and contribute to our de-industrialization. To be sure, the trade deficit is a problem that needs to be addressed and is in part traceable to the high savings rate in major export-driven countries like China and Germany. It would certainly help matters if they saved less and spent more on goods produced by their home-based industries instead of exporting them—in China’s case, aided increasingly by subsidies.

But our trade deficit also stems from the very low gross savings rate in the United States: 17 % of GDP in 2023 compared to 44% for China and 27% for Germany. We spend a lot, and that increases the demand for products made abroad. Moreover, many of the imported goods Americans buy are made by US companies that relocated production to other countries when economic globalization was all the rage.

Companies move production abroad for many reasons, of course, but tax incentives are one of them, and under Trump, despite his narrative that he is the American worker’s best friend, changes in tax laws increased the incentives to locate production abroad. A case in point: the 2017 provision that sharply reduced the tax rate on corporate profits earned abroad to 10.5% versus 21% for profits recorded within the US. If Americans buy products that US companies make abroad, it contributes to the trade deficit. This is not to say they shouldn’t buy them; my point is that Trump’s account of the trade deficit, namely that Americans are being swindled by foreigners out to wreck our economy and nothing on the home front contributes to the problem, is false.

This brings us to Trump’s recent threat to levy a 25% tariff on imports from Canada and Mexico. That unilateral move essentially tore up a modified trilateral trade deal—the US-Mexico-Canada Agreement (USMCA)—that Trump himself negotiated. (It was signed in 2018 and took effect in 2020, replacing NAFTA, the North American Free Trade Agreement, reached in 1992.)

The tariff hikes he announced are a big deal: US-Mexico trade (in goods) totaled $775 billion last year and US-Canadian trade $699 billion. Mexico is our largest trade partner, followed by Canada. Had Trump tried to negotiate better trade outcomes by assigning a team to negotiate with these two countries, and had that effort failed, one might have some sympathy for his sudden and extreme measure. But that’s not what he did: he imposed the tariff hike as a first resort. He likes “shock and awe.”

And his rationale for this move was less about the trade deficits we run with Canada and Mexico; he dwelt on illegal migration and fentanyl flowing into the United States from both countries. When aimed at Canada this gripe makes no sense. There has doubtless been an increase in illegal migration across the 5,525-mile across the border with Canada, but the number accounts for less than 1.5% of the US Customs and Border Patrol’s interceptions from all locations last year. The proportion of fentanyl coming from Canada totals even less: 0.2% of all seizures.

Once Canadian Prime Minister Justin Trudeau hit back with tariffs of his own—even though a trade war would hurt Canada much more than it would the US given that 77% of Canada’s exports are accounted for by the US and only 17%of US exports go to Canada—Trump did a 180. He agreed to suspend the tariff hike for at least a month after a phone call with the Canadian leader.

But here’s the thing: Canada did not make any big concessions. Trudeau agreed to allocate $1.3 billion to security and surveillance along the border, but he had already announced that step in December, before Trump took office. The only new item Trudeau added was the pledge to appoint a “fentanyl Czar” and $200 million for intelligence operations. The main consequence of Trump’s tariff threat? An upsurge of anti-American sentiment in Canada (of all places). When was the last time you heard Canadian sports fans boo while the Star-Spangled Banner was being sung? Well, it happened after Trump’s tariff hike—and more than once. Why make an enemy of the best neighbor any country could hope for?

Illegal migration and fentanyl smuggling is a much bigger problem along the US-Mexican border. But Mexico’s recently elected president, Claudia Sheinbaum, acted with dignity and calm. After Trump’s tariff hike, she didn’t announce an immediate retaliation like Trudeau’s, though she reserved the option of responding in kind. Instead, she had a conversation with Trump and won a 30-day delay. The US and Canada will discuss joint efforts to deal with illegal migration and fentanyl smuggling. Sheinbaum offered a master class on how neighboring countries should deal with disputes: through diplomacy.

Trump is right to be concerned about fentanyl coming across our southern border: deaths linked to synthetic opioids (mainly fentanyl) have skyrocketed, from 5,544 to 73,654 between 2014 and 2022 alone. Again, however, he failed utterly to recognize that things that happen inside the US contribute to the problem. Mexico’s fentanyl trade is run by armed gangs that have turned parts of the county into no-go zones, and, as it happens, a lot of the weapons they wield come across Mexico’s border with the US: 53,000-plus firearms between 2015 and 2022. Then there’s the soaring demand for fentanyl in the US: end that and the fentanyl smuggling would stop or at least plummet. But have you ever heard Trump announce a comprehensive plan to address firearms smuggling to Mexico or the demand for fentanyl in the United States?

Here's the bottom line: Governing requires painstaking attention to detail, drafting complicated pieces of legislation, making the hard compromises required to ensure that they become law. None of this is glamorous, and it also takes time and patience. Trump’s flurry of executive orders, sudden tariff hikes, and threats to annex the territory of allies (Greenland, part of Denmark) may make for headlines and fire up his base, but they are no substitute for crafting the policies needed to solve complicated problems. If Trump 2.0 has revealed anything so far, it’s that he has the temperament for spectacle but not for day-to-day governance. That’s not only his problem. It’s ours as well—and perhaps more so,