Trade Talks Beat Trade Wars Every Time

In recent years, Democrats and Republicans have come to agree that open markets are bad for America. Successive administrations have raised import barriers and withheld support for pro-trade norms, agreements and institutions. This is a grave mistake, as will become clearer with time. Until the new consensus gives way, the challenge will be to limit the damage. The best way to do that? Keep talking.

The biggest threat from tariffs and other restrictions isn’t short-run damage from higher costs and misallocated investments, real as those are. Such first-round costs are usually manageable. The greater risk is a cycle of retaliation and counterretaliation. Outright trade wars cause enormous damage, and not just in narrow economic terms. As commerce craters, alliances fray and rivalries grow fiercer.