Disparate Impact Theory Rejected for DEI, but Embraced for Tariffs

Peter Navarro: “the sum of all cheating”

TARIFFS:

The data that President Trump put out on foreign countries’ existing tariffs and non-tariff barriers turns out to be something else entirely, a fact already pointed out by me and others.

Trump’s table purports to show “Tariffs Charged to the U.S.A. Including Currency Manipulations and Trade Barriers.”  But for most countries with which we have a deficit, it actually presents that country’s trade deficit with the US, shown as a percentage of that country’s exports to the US.

The Administration is claiming that the trade deficit is the correct measure of the total of all tariffs, currency manipulations, and non-tariff barriers—or as Peter Navarro put it on CNBC—”the sum of all cheating.”

In essence, the Administration is adopting disparate impact theory and applying it to tariffs. They are assuming that without tariffs and non-tariff barriers, every country would have balanced trade with every other country—and thus essentially no trade deficits.  Further, if you have a trade deficit with another country, not only is that difference is due to discrimination and cheating, but the trade deficit is the measure of the amount of that cheating.  The country that sells more goods than it buys from another country is the cheater. This is a simple application of disparate impact theory to trade and tariffs.

DEI

In the fields of DEI and affirmative action, disparate impact theory treats any deviation from equal results as strong evidence of discrimination. The “‘central assumption’ of discrimination testing is that in the absence of discrimination, groups would be randomly distributed.” (Lindgren, Measuring Diversity)

The Trump Administration seems to have rejected the theory of disparate impact, at least as a justification for compensatory discrimination in favor of under-represented groups. But it now adopts it for tariffs: treating differences in results as essentially conclusive evidence of cheating and discrimination.

NEXT: Tariffs #2: If running a trade deficit is cheating, then is the US cheating countries like the Netherlands, Australia, and the UK with whom the US runs a trade surplus?

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