The Daily Signal - Victor Davis Hanson: Donald Trump’s Tariff Diplomacy Is Working

Episode Date: February 7, 2025

President Donald Trump is not using tariffs for their historical purpose, which is to protect and promote domestic industry. Instead, Trump, as Victor Davis Hanson argues, is using tariffs to hold countries, like Panama, Colombia, Venezuela, and China, accountable.  And it’s working.  On this edition of “Victor Davis Hanson: In His Own Words,” Hanson dispels the Left’s hysteria over President Trump’s tariff policies:  “So, if you take Venezuela and Colombia, he's saying that ‘you people deliberately emptied your jails and you sent them to the United States—sent them being felons—violent felons. And you're not going to do that anymore’  And they said, ‘we're not taking them back’. He said, ‘you're going to take them back, or I'm going to put a tariff’. So, it was a lever of diplomacy, and it worked. They backed down completely.”  For Victor’s latest thoughts, go to: https://victorhanson.com/ Don’t miss out on Victor’s latest videos by subscribing to The Daily Signal today. You’ll be notified every time a new piece of content drops: https://www.youtube.com/channel/UCHqkXbgqrDrDVInBMSoGQgQ Learn more about your ad choices. Visit megaphone.fm/adchoices

Traditionally, a tariff, remember, is a policy that a government uses to prop up an anemic industry, an industry that can't compete globally or vis-a-vis a trading partner. And traditional economists say this is terrible. If you don't have free global trade, then the consumer is paying more for a product that is inefficient because it's shielded from competition. But is Donald Trump really doing that? What I'm getting at is there not really tariffs. So what are they? Well, to answer that question, let's look at the countries he's...

targeted. Hello, this is Victor Davis-Hanson for the Daily Signal. I want to talk about tariffs. If you know everybody's noticed the hysteria that happened the last five or six days that Donald Trump is going to haphazardly in shotgun fashion level asymmetrical tariffs or blanket tariffs, the stock market panic. But my question to all of us is, were they tariffs at all? Additionally, a tariff, remember, is a policy that a government uses to prop up an anemic industry,

at least an industry that can't compete globally or versus vis-a-vis a trading partner. And traditional economists say this is terrible, because what happens is that if you don't have free global trade, then the consumer is paying more for a product that is inefficient because it's shielded from competition. But is Donald Trump really doing that? Is he saying our tobacco industry or shoe industry is weak and I have to prop it up? He's not really. These are not, what I'm getting at is they're not really tariffs. So what are they? Well, to answer that question, let's look at the countries he's targeted, Panama, Colombia, Venezuela, China, the EU, Canada, and Mexico. In all of those cases, is he trying to protect a particular industry? I don't think he is. So if you take Venezuela and Colombia, he's saying that you people deliberately empty your jails and you sent them to the United States, sent them being felons, violent felons. And you're not going to do that anymore. And they said, we're not taking them back. You said, you're going to take them back or I'm going to put a

tariff. So it was a lever of diplomacy. And it worked. They backed down completely. Then he said to Panama, we had a treaty with you signed during the last year of the Carter administration, which you were going to give us in response to our historic role in creating the Panama Canal at great cost, which we gave to you certain conditions of which you violated. You invited in our arch enemy and conducted this silk-enrolled agreement with them, and suddenly they have concessions at the at both ends of the canal. And you knew what you were doing. And yet you took advantage of us. So you're going to have a tariff. And, of course, it worked. Now there's negotiations.

And China may be out of the picture somewhat. Same thing happened with Canada and Mexico. We said to the Canadians, you're supposed to pay 2% of your NATO, of your GDP for military defense. That was your NATO promise. You broke it. You pay 1.37 in defense.

Canada used to have the fourth, fifth, greatest Navy in the world. What are you doing? Well, I can tell you what you're doing. You're relying on the United States nuclear shield to protect your North American territories and to keep the American Navy keeping the Atlantic and the Pacific and the Red Sea and the Persian Gulf, all free of pirates and hostile belligerents and terrorists. And we do that. We subsidize you.

And we pay 16% of NATO's budget. We're just one, just one of, you know, 30 nations. And you're running up a $50 billion surplus, $50 billion. And you look at your tariffs versus ours. And they're far more punitive and they're far greater. And you won't control the border. You think it's funny, Mr. Tadot, that people are coming across this once free and open border to take advantage of our derelict immigration policy? And we said the same thing to Mexico. What are you doing, Mexico? Under the NAFTA agreements, it was supposed to smooth out trade, you've gone from $2 billion surplus to $167 billion.

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dollars from expatriates that send remittances, and they're being subsidized by state and local and federal government taxpayers and health education. And that's not the end of it. You're getting $20 or $30 billion by your cartels that, in fungible terms, help your economy. You're getting over $200 billion, and what are we getting out? We're getting 75,000 dead Americans. We're getting 12 million illegal aliens in the last four years, and we are getting cheap Chinese-assembled products dumped in our country. And we're not going to do it anymore. So he threatened them with a terror. As far as China and the European Union, he said the Chinese, you're running $200 to $300 billion trade surpluses, and we know what you've been doing. In addition,

you'd serially steal American technology. You conduct cyber attack. on some of our corporations and companies. And you dump product here at below the cost of production to create market share, or you target strategic industries of ours to put them out of business, and you want us to offshore and outsource, and you've hollowed out the United States industrial belt. So all we ask is reciprocity. Whatever you do, we will do.

But he's not protecting an individual industry. And he's saying the same thing to the EU. How was it, Europe, that you are now half a trillion dollars running a half a trillion trade surplus with the United States? And yet, we contribute an inordinate amount to your defense. We have a notion between you and us. You're right on the border with some very dangerous people in Ukraine. And yet we are paying an ordinate amount.

And we've been doing this for nearly 80 years, and you don't listen to us. Let me just finish by saying, this was not the first effort to rectify asymmetrical and unfair policies that involve drugs, illegal immigration, dumping product, huge trade surpluses, not paying your military responsibility in terms of military investments and defense expenditures. This was the last desperate move. We have tried through conferences, bilateral talks, threats, and all of these people have said, basically, if I can excuse the vernacular, heck with you, screw you. And so Donald Trump finally, in desperation, said, I have a tool called a tariff. But in conclusion, I'm not sure it was a tariff at all. It was just a diplomatic tool. And I think the Wall Street Journal and a lot of our economists need to calm down because he's not trying to go back to the 19.

30s, which may have caused the Great Depression with reciprocal blanket tariff. He's trying to restore fairness and symmetry to the world in every aspect of that word. Thank you very much. This is Victor Davis-Hanson for The Daily Signal. Thank you for watching today's podcast. And for more news like that, subscribe to the Daily Signal. Maybe you can check out my own website at victorhansson.com for podcast, lectures, ultra-series behind a paywall, but more importantly, just daily columns that are accessible and free to everyone.

Thank you very much.