On trade policy, the selection of Larry Kudlow as the new director of the White House National Economic Council will provide an important counterpoint in an area where President Trump has been ill-served by many of his key advisers.
As Kudlow recently wrote, along with Stephen Moore and Art Laffer:
“One of the ironies of trade protectionism is that tariffs and import quotas are what we do to ourselves in times of peace and what foreign nations do to us with blockades to keep imports from entering our country in times of war.
“Or consider that we impose sanctions on U.S. enemies such as North Korea, Russia and Iran because we want them to feel the economic pain of being deprived of imports. But now we are imposing sanctions on our own country by punishing with tariffs in order to make Americans more prosperous. If ever there were a crisis of logic, this is it."
On the North American Free Trade Agreement (NAFTA), Kudlow said:
“NAFTA needs to be fixed and refurbished. But it is essential to our economic and national security success.”
This is a welcome counterweight to the opinions of Trump advisers like Peter Navarro, who defended tariffs on steel and aluminum used by U.S. manufacturers by asserting “there are no downstream price effects on our industries that are significant,” Commerce Secretary Wilbur Ross, who called higher car prices resulting from steel tariffs “no big deal,” and U.S. Trade Representative Robert Lighthizer, who kicked off NAFTA negotiations by alleging “for countless Americans, this agreement has failed.”
If nothing else, the presence of Kudlow will prevent Trump from being surrounded by advisors with a uniformly pessimistic view of trade. With any luck, Kudlow will even save Trump--and Americans--from misguided trade policies in the future.