I don't think there is the remotest chance Trump's plan will work. However, let's have a think about a way it could (however unlikely). Import taxes have been anathema for years - every trade deal and economist (maybe) has argued against them. And the reason is pretty basic. For most products the size of the international market is many times the size of the national market, so the ease of selling internationally is a key factor in how big your company can become. But the costs of this are that smaller local competitors are squeezed out or taken over and, in the fight for competitiveness, the jobs move to the lowest cost, which is typically abroad. So imagine we now have steep tax barriers. The big firms are hit, and hit hard. Job losses are inevitable. But along with this, the scope for the smaller business focused on local markets could pick up. Over a period of a few years, many of the lost jobs could be picked up elsewhere. Then, why concentrate on goods we can sell internationally? If your product line is, for example, locally raised/grown food, the international market is not too interesting to you. Equally, if the tariffs on imported food are high, it stimulates your local market. And there is also a possible environmental benefit - losing all those air miles transporting goods everywhere. And then finally there is all that money raised from the tariffs. Trump would put those in lowering taxation; other would prefer to invest it in education and other social goods. Can it work? As I said, not a chance in my opinion. But it is self evidently crazy? No, it is not. It is just at odds with everything we have done for decades. That does not mean it is crazy.
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