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Mihir Sharma

Who Doesn’t Love a Trade War?

By firing the first shot, the U.S. is encouraging protectionists everywhere.

Indian Harley owners were spared, for now.

Indian Harley owners were spared, for now.

Photographer: Sonu Mehta/Hindustan Times/Getty Images

U.S. President Donald Trump rode to power declaring that China had twisted the world trading system out of shape -- and plenty of people around the world murmured in agreement, if very quietly. The first shots in Trump’s trade war, however, have been indiscriminate. His steel and aluminium tariffs are the equivalent of firing into a curious crowd of onlookers. This is a terrible idea for many reasons, not least because every member of the crowd is armed.

On Thursday, it was India’s turn to shoot back. Tariffs were raised on the usual complicated list of imports from the U.S., such as walnuts, phosphoric acid and apples (but not, as initially feared, Harley-Davidson motorcycles). The move underscores a key truth about trade wars: Everybody loses. In India as in many countries, responsible economists in the government were already fighting a losing battle against the ruling party’s protectionist instincts. Last year, India and the U.S. imposed more new trade restrictions than any other countries. In the last federal budget, tariffs were raised across the board for the first time in decades. One of the unspoken dangers of Trump’s actions is that protectionists everywhere have been emboldened – and now have the alibi that they’re acting in self-defense.