Since Trump returned to power, I have been talking a lot about the broken transmission belt of policy.* In ordinary times, if a person, firm, or association had a problem, they could complain to their Congressperson or Senator, and that person would put heat on the President to reverse the policy or stop it before the policy took effect. That is the transmission belt of policy--taking the preferences and concerns of individual and collective interests and connecting them to the actors making the big decisions.
Since Trump came back, that belt has been broken. Very little of what Trump does is popular, much of it is annoying or worse to many voters, firms, and sectors. But Republican Congresspeople and Senators have largely been unresponsive--they have not pushed for legislative changes and they have not pressured Trump that much.
Why? Because they range from cowards to co-conspirators. Mostly, the former. Trump has two things going for him that help cement his control over the party: a) he is quite willing to throw any member of his party under the proverbial bus and his followers go along with it with Musk's money as a big hammer; and b) MAGA violence is a real threat to Republicans who stray. My fave example is Joni Ernst, who initially opposed Pete Hegseth's nomination for SecDef since he stood against what she stood for--women serving in combat and fighting sexual assault against women who serve. She folded quickly.
I return to this topic today because the trade war for Canada is terrible for many American companies and sectors. For instance, Canada is the most important provider of potash to American farmers--85%. The trade war will have several impacts on Americans and American firms:
- the price of various goods will go up as taxing Canadian imports, yes, increases the prices Americans pay for Canadian goods.
- the price of various goods will go up as taxing Canadian imports, yes, increases the prices of Canadian goods so American companies that compete with Canadian imports will raise their prices as they face less competition.
- American firms will become less competitive as key inputs for their products will get more expensive--American cars, agriculture, etc. all rely on Canadian inputs.
- American firms that export to Canada will lose business as taxes on their goods--tariffs placed by Canada in relatiation--get more expensive.
In ordinary times, these kinds of folks are important political actors, offsetting those firms who benefit from a protected market--this is the stuff Helen Milner wrote so persuasively long ago. Globalization of production made it less politically attractive to be protectionist. What has happened? Trump doesn't care, as he has largely been immune from the impacts of his policies. Well, his popularity isn't immune, but the GOP whine rather than legislate. Party discipline, caused by fear and greed, has broken the transmission belt. I still wonder about the tech firms who seem so important and rely so heavily on foreign markets, but I guess the combo of being too big to regulate or fail and being run by eugenicists and other awful people means they don't care.
Does this mean that things will change if the Dems win back both houses? I am not so sure, as the transmission belt of policy works if the executive respects the legislature and the Constitution. Right now, we have Trump's minions defying the very basic rules of the system--not spending money that Congress has allocated. I am not sure they will stop when the Dems hold some power.
So, maybe it is not just cowardice and greed that block the transmission belt, but the end of the rule of law?
Anyhow, we shall see if Trump tacos on this, as the trade war is really bad for Americans. To be clear, the trade war is really bad for Canada, but Carney is only getting more popular as Trump has thoroughly inflamed Canadian nationalism. Canada is united. The US? Not so much.
* I thought I had written a post about the broken transmission belt of policy, but I can't seem to find it.
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