Tough Times require Tough Leadership

[dan_s]

Trump, Musk, and Tariffs -
The Warrior, the Builder, and the Shield
By: Scott Brooks, publisher of The Waxahachie Sun

There are moments in history when the easy path is no longer an option, when the comfortable illusions of peace and prosperity must be shattered by the cold, bracing air of reality. At such times, civilizations do not survive through timidity, nor do they prosper by the counsel of the feeble-hearted. No, they endure — and triumph — only when men of boldness, vision, and unshakable conviction seize the hour.

It is at such a time that we find ourselves now, and it is precisely why we must embrace three seemingly distinct yet profoundly interconnected forces: the return of Donald Trump, the genius of Elon Musk, and the necessity of tariffs. These are not mere political preferences or economic policies. They are necessities, tools of survival in an age that has lost its moral and strategic bearings.

There is something curiously ancient about Donald Trump. Not in the sense of a relic from a bygone era, but in the way a mighty oak is ancient — unyielding to the storms, resistant to the shifting whims of lesser things. He is not a politician in the modern sense, and this is precisely why he is needed.

For decades, America has suffered under leaders who were, at their very core, men of compromise. They compromised with foreign powers that sought our downfall. They compromised with economic policies that bled our industries dry. And worst of all, they compromised with the creeping moral decay that whispers to every great civilization, “Give up your strength, surrender your courage, and you will be rewarded with comfort.”

Trump, however, is a man who does not bend the knee. This is, of course, why he is hated. Not merely opposed but loathed with a depth of feeling that is usually reserved for great conquerors or fallen angels. He is too loud, too certain, too insistent that America should not apologize for being great. His enemies do not despise him for his flaws — they despise him because he refuses to share in their weakness.

And this, above all, is why he is necessary. For a civilization cannot be saved by those who wish only to be liked. It cannot be restored by those whose chief aim is to be agreeable. No, it can only be defended by those who are willing to be hated for doing what is right.

If Trump is the warrior, then Elon Musk is the builder. And if history teaches us anything, it is that great civilizations require both.

There is a peculiar sort of madness that accompanies true genius, a refusal to accept the limitations imposed by the cautious and the conventional. Musk embodies this spirit in a way few men ever have. While others shrink before the immensity of the problems facing our age — bureaucratic inertia, widespread corruption, and the slow suffocation of human ambition — Musk charges forward.

He builds rockets not because it is easy, but because it is necessary. He pursues artificial intelligence and vitalization not out of blind idealism, but because the future belongs to those who create it. And perhaps most tellingly, he does not yield to the self-imposed restrictions of his peers. He is willing to risk, to fail, to offend, and to stand alone if he must.

In an age where too many people are content to inherit the achievements of their ancestors, Musk does what all great achievers must: he creates. He embodies the spirit that once made America a land of industry and invention, rather than a museum of faded glories. And that, more than anything, is what we need now.

Yet neither a warrior nor a builder can sustain a nation if its foundation is cracked, if its wealth is siphoned away by unseen hands. This is where tariffs, the most misunderstood of economic tools, become indispensable.

For years, America has lived under the illusion that free trade — unchecked, unrestricted, unreciprocated — was the highest economic virtue. We were told that it did not matter if our factories closed, if our industries withered, if our workers were displaced. We were assured that efficiency was more important than sovereignty, that low prices were preferable to national strength.

But history has been unkind to such illusions. The truth is that no great nation has ever prospered by surrendering its economic might to foreign powers. No civilization has long endured after allowing its wealth to be drained away by those who do not share in its fate. The Romans once depended on foreign mercenaries to defend their borders, and their empire fell into ruin. We, in turn, have depended on foreign factories to supply our needs, and we have seen our own industries collapse.

Tariffs, then, are not simply about economics. They are about sovereignty. They are about ensuring that a nation retains the power to produce, to innovate, to stand on its own. Those who sneer at tariffs misunderstand this fundamental truth: a nation that cannot sustain itself is a nation that will not survive.

There are those who will tell you that we do not need strong people. That boldness is dangerous. That self-reliance is outdated. That we must abandon our instincts for survival in favor of a false and fragile peace. But they are wrong.

Trump. Musk. Tariffs. These are not political preferences. They are the necessities of an age that has forgotten what it takes to survive. And if America is to endure, if it is to reclaim the greatness that has always been its legacy, then it must once again learn the lessons of history: that strength is better than weakness, that creation is better than stagnation, and that sovereignty is better than servitude.

The road ahead will not be easy. But it is the only road worth taking.

Scott Brooks is publisher of The Waxahachie Sun and may be contacted at scott@waxahachiesun.com. Brooks can also be seen every Tuesday and Thursday from noon-1pm on the Sun’s ‘Grit and Good News’ livestream show. The show airs live on Facebook, Instagram, YouTube, and Twitch. You can also see video segments on TikTok under the ‘Grit&GoodNews’ brand.
----------------------
MY TAKE: Failure is not an option. If America fails, Europe will fail.

[Petroleum economist]

Dan, this is scary.

What Scott Brooks describes is a cult who should follow an all-visionary leader. Trust him and his tariffs and all be alright.
No checks and balances. Ignore everybody who disagrees. No more free trade. Let us isolate ourselves from the evil outside world.

Macroeconomics and history teach that tariffs/protectionism leads to a recession, if not a depression. Consequences are high inflation, a shrinking GDP, stagnation and possibly massive unemployment.

A common-sense US government should balance its budget (reduce expenditure, raise revenues). No tax cuts.
With a reducing debt, the demand for dollars will reduce, weakening the dollar. A weaker dollar will boost exports and will reduce imports (too expensive) and thus will reduce the trade deficit.

[Ray_M]

The following are the opening paragraphs of a posting from Karen Philippa "Pippa" Malmgren (PhD in International Relations from the London School of Economics (LSE) in 1991). I have followed her writings (both online and books including Geopolitics for Investors and Signals: How Everyday Signs Help Us Navigate the World's Turbulent Economy) for over 10 years.


article link: https://open.substack.com/pub/drpippa/p/tariffs-the-american-mittelstand?r=35v8y&utm_campaign=post&utm_medium=email

Tariffs, The American Mittelstand and The Mighty Wurlitzer

Contrary to the press coverage and general chatter in the markets, I think the US is pulling off an extraordinary coup with the tariff announcements. To be clear, I am a free trader. I wrote my Ph.D. on trade policy and advised the US and UK Governments on trade issues. So, this is not an off-the-cuff view. The US has now launched a global free trade deal that is more ambitious and which will include more nations than anyone in the trade policy world had ever imagined possible. As someone whose family spent the last forty years negotiating the reduction of tariffs and non-tariff barriers to trade, it is frankly astonishing to see how fast countries are willing to drop their tariffs to zero. They are also willing to work with the US on policy and on reducing Non-Tariff Barriers. Vietnam was the first to fold. They dropped their tariffs to zero. Why? Because they have no choice. The rest of the world needs to sell to America, but America does not need to sell to the rest of the world. Simple. As the Pax Americana Global Free Trade Zone takes shape, hold-out nations will lose business to the nations that have joined. Izabella Kaminska sharply observes that the tariff announcements for Liberation Day were suspended for 90 days. This means that the next big tariff announcement will be on the Fourth of July. This has all been remarkably carefully thought through. I’m betting Trump manages to drive stock prices through the roof just in time for the midterms.

The message may have been delivered with a baseball bat, but fundamentally, the US has offered the world a compelling invitation: start making your products inside the United States. This is a gift to any nation that wants to build global brand names and move up the value-added curve, which they all do. You can’t raise national incomes any other way. For those who argue this cannot be done, one needs to remember what happened with Japan’s Toyota and China’s Haier. Both made this leap into US manufacturing years ago with great success. It’s been done before. Now, it can happen at scale. We all know that Toyota’s US plants are their most profitable and produce the highest US content autos in the US. Haeir’s story is less well-known.

[dan_s]

Harry

If tariffs are so bad, why do so many countries have tariffs and other trade barriers against things made in America?

Remember, if America fails it will not be able to afford a military that protects Europe.

[Petroleum economist]

Dan, other countries have tariffs in place but at lower levels. To protect special industries, they can be justified provided the are included in trade deals. The EU on average charges 3% to the U$ imports not 10-20%.

The current tariffs on Canada (25%), Mexico (25%), China (145%) and 10-25% on the rest equate to average tariff levels of 33-42%. These are Great Depression levels or worse.

-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
Ray, another groupie. I am sure that there are thousands, if not millions like her.

She does not explain how moving production to the US will fix the real imminent problems such as the budget deficit or reduction of the national debt.
No mention of wage differences which will make manufacturing in the US cost a multiple to make the same product and thus introducing inflation.

It will take years to build new plants. Employment in the US is almost 100%. From where do you get the cheap labor force?
In the meantime, with high tariffs, inflation will rise as consumers will pay more for the same products (an iPhone for $ 2,000?).

Others will also raise tariffs (China to 125% today) which will hurt US exports.

General tariffs and protection are not a solution. If you want to boost/protect a certain industry branch, then specific tariffs can be considered. Tariffs are not suitable for all goods.

[mrbill]

Thanks Dan, your question let the proverbial "tariff cat" out of the bag. In my own business I import industrial goods from Germany. 10% tariff is now added to the bottom line of a box coming into Houston this weeked. Less profit, I will honor the quote I made to the customer. Conversely, my arch competitor gets goods made in China. It will be interesting to see how they pass that 125% tariff added to their bottom line onto US customers.

Living a lot of life on the Mississippi Gulf Coast of America, I see the effects of foreign seafood being "dumped"
here and driving out all local Shrimpers. Even the Vietnamese who came over after the Viet Nam war can't make
it shrimping. We get ours from a local fireman who has a boat and shrimps when off duty. We know it's fresh and no weird additives. Plenty of Ecuador, whatever stuff at the seafood store.

It all comes down to "whose Ox is being gored".

[Ray_M]

Harry, I realize that the full article is behind a paywall, so your comments may be based on not being able to read it in its entirety. Obviously I cannot reproduce the entire article, but hopefully some excerpts will help to address some of your arguments. (I also find the 'groupie' comment interesting, and address it at the end along with a personal perspective on introduction of technology to address manual processes in corporations to "give people their lives back").

First, let me provide a summary of the entire article provide by Microsoft Copilot, followed by a few specifics.

Dr. Pippa Malmgren's article explores the U.S.'s recent tariff strategy, which she views as a bold move to reshape global trade dynamics. She argues that the U.S. is creating a "Pax Americana Global Free Trade Zone," encouraging nations to drop tariffs and manufacture goods within the U.S. This strategy aims to boost American-made products, create higher-value jobs, and reduce reliance on traditional corporate structures. Malmgren highlights examples like Toyota and Haier, which successfully established manufacturing in the U.S., demonstrating the potential for other nations to follow suit.

The article also delves into broader implications, such as the shift from corporatist models to supporting small and medium-sized businesses, fostering innovation, and challenging the influence of the Deep State. Malmgren emphasizes the importance of adapting to market volatility and embracing entrepreneurial opportunities in this evolving economic landscape.

It's a thought-provoking piece that ties economic policy to geopolitical and societal shifts. Let me know if you'd like to explore any specific aspect further!

 

On labor, Malmgren starts with an example of a Chinese firm (Haier, led by Zhang Ruimin) that began manufacturing in the U.S. years ago. After background on their history and success in the U.S., she addresses labor issue:

This is important today because advances in technology mean that manufacturing can now be done anywhere with virtually unlimited labor (automation). China no longer has a lock on being the least expensive place to make things. Now, automation reduces the labor content, and it becomes possible to make things for local needs while still remaining profitable. The old business model based on scaling identical products across the globe no longer applies.

Malmgren then addresses automation directly, observing that the manual labor will be done through automation, creating new roles to support the end result of the manufacturers (eg, branding, sales, customer relations and finance). Jobs that are generally higher-paying instead of physically demanding or monotonous.

For a glimpse of the state of the art in automation and robotics, go to YouTube and search on "Boston Scientific Robot". And if that still doesn't convince anyone on the rise of automation, then consider the current work on incorporating AI into machines, and its impact on manual labor today (eg, self-driving automobiles).

Your comments on tariffs, protectionism and consequences such as inflation, shrinking GDP, etc., may be based on the historical approach of tariffs that once applied, remain in place for years.

Consider what Trump's stated end-game is on tariffs: any country that persists in employing tariffs, trade barriers, or other policies that give them an advantage over the U.S. will have the same applied to them (my words).

The end-game is not to maintain tariffs, but to create an alliance of countries that have NO trade barriers.

This is not to say that a country's comparative advantage in certain areas is wrong. But it is to say that in a free-trade system, the imbalances between overall trade surpluses/deficits should not exist, as they do today.

Groupie: That is a subjective statement, which is fine. All that I ask is what evidence or examples do you have to support this? And after understanding her skill set and experience, I personally can't think of very many people (certainly not thousands or millions) that can match her background or expertise. Malmgren is a thought-leader and good communicator. If you find factual inaccuracies in her statements, either this or others, then I would like to understand those.

However, I do believe its important to read or listen to views from all sides, if you do have other sources that provide a different perspective, then please include them.

Another resource that I listen to, and subscribe to, is Peter Zeihan. Zeihan is a geopolitical analyst known for his expertise in how geographics, demographics and economics impact global politics. His most recent book from 2022 is "The End of the World is Just the Beginning - mapping the collapse of globalization". I don't think anybody would consider Zeihan to be a pro-Trumper. But his insights, based on data (eg, generational birth rates) and the impact of geography on a nation's advantages and disadvantages and why they do things the way they do, are insightful. On tariffs, Zeihan believes they are not good policy. But consider also the opening statement on the book jacket of the afore-mentioned book: "2019 was the last great year for the world economy." A key thesis of the book is that we are entering a time in which "countries or regions will have no choice but to make their own goods, grow their own food, secure their own energy, fight their own battles, and do it all with populations that ar both shrinking and aging."

Some of Dr. Malmgren's points and examples, I've heard before. Some, such as automation, I have personally experienced. My background is in IT since the 80s, and my focus in development, systems engineering and consulting has been to implement software solutions which empower the end-user to "think smarter, not work harder" and give them their lives back.

[aja57]

Harry, you are only focusing on the tariff rates from the EU. You are great with numbers so I assume those numbers are correct but you totally ignore all the myriad of non tariff barriers to entry. Why is that? Is every product produced in the EU a national security or specialization good? The tariff rate in the EU is a very deceptive component to the entire trade landscape.

[Petroleum economist]

Bill, I like shrimps as well.

Shrimps are an excellent example where targeted protection and/or tariff are justified.

I have lifted some data from the Shrimp Alliance webpage:
• The U.S. shrimp industry has suffered significant in recent years.
• Since 2021, the prices of imported shrimp have dropped significantly.
• This economic downturn has led to many shrimping businesses to close.
• 94% of shrimp—and all seafood—consumed in the United States is imported. There are also concerns on quality.
• Retail shrimp prices have remained high for consumers, highlighting the disconnect between wholesale and retail markets.

Note that most of the shrimps come from India and not from Ecuador. The top 6 suppliers accounted for 96% of all U.S. shrimp imports:
• India (42.3%) – tariff rate of 26%
• Ecuador (26.9%) – tariff rate of 10%
• Indonesia (15.4%) – tariff rate of 32%
• Vietnam (7.2%) – tariff rate of 46%
• Thailand (2.4%) – tariff rate of 36%
• Argentina (2.1%) – tariff rate of 10%
• No other country accounts for more than 2% of import volume

The uneven import tariffs proposed President Trump will affect Vietnam but far less Ecuador. It is better to have a tariff on shrimp imports than on countries. Proof of source or origin then is not required.

[mrbill]

Great research on the MS Gulf Coast of America shrimp situation. I'm impressed by your research and how fast you did it. I said "Ecuador" not factually, just to illustrate that when my wife and I go to the market it is "labeled"
as "some foreign country". Based on your research I will back off Ecuador and focus on India.

Recently the State of MS imposed hard fines on the seafood house "mislabeling" the shrimp, saying they were locally caught. Same with things like Mahi Mahi, etc. That restaurant Dan would know in Biloxi got caught and fined
some thing like a few 100 thousand dollars for saying they served local seafood. I'm from New Orleans, but one thing I like about MS is they catch you doing wrong and they punish you.

Many good points in the article, I won't go over them all now. Yes indeed, shrimp prices at a restaurant are like platinum.

What turns us off locally is "have these cheap dumping nations processed the shrimp the right way", not applying chemicals, using shortcuts, etc.? Later.

Only with your permission I want to show your post to the local shrimper alliance group. Again, I'm impressed.

[Ray_M]

Discussion around tariff rates seems to be focused only on the rates. The tariff on Vietnam is the most recent example. Vietnam also has the following Non-Tarriff Barriers (NTB) in place:

• Transshipment hub for Chinese Goods - Vietnam is a transshipment hub for Chinese goods to evade U.S. tariffs. The country is routing Chinese products through Vietnam to re-label them as "Made in Vietnam" in order to qualify for lower tariffs or avoid U.S. duties on Chinese imports

• Technical Standards - Vietnam employs technical standards and regulations that often act as NTBs, creating obstacles for U.S. exporters to access its markets. Examples include:
  • Complex registration and licensing requirements,
  • In-Country Testing Requirements - this requires U.S. firms to conduct costly and time-consuming test in Vietnam, even for products certified globally
  • Labeling Requirements - Vietnam’s Decree 111/2021/ND-CP, effective from February 2022, mandates detailed labeling for imported goods, with specific requirements varying by product category. Importers report challenges due to inconsistent product classifications and unclear guidelines, which can result in goods being held at ports or rejected outright.

• Intellectual Property Issues - this includes areas such as:
  • Online Piracy and Counterfeiting - Vietnam is a hub for online piracy, distributing pirated content including music, films, and software. U.S. companies report that enforcement against these platforms is weak, with no clear legal pathway to shut them down. Physical counterfeiting of goods, such as apparel and electronics, also persists in Vietnam's markets.
  • Intellectual Property Theft - some U.S. companies operating in Vietnam face pressure to share proprietary technology as a condition for market access.

Any discussion around the current U.S. tariff process should include the real cost of NTBs, or it is simply not a completely valid discussion.