Oh! What a Lovely Trade War
It's always dangerous to say that Donald Trump has set a new low for presidential discourse, because he sets new lows with dreary regularity. Nonetheless, his heedless declaration that "trade wars are good, and easy to win" deserves special recognition.
No president should need to be told that trade wars are, in fact, bad and impossible to win. By imposing new tariffs on steel and aluminum, Trump has embarked on a policy that is a clear and present danger to U.S. jobs and living standards.
The tariffs are indefensible on their face. They'll raise prices for U.S. consumers and put U.S. companies at a serious disadvantage in export markets. There's no need to go over this ground again: None of the rationales that have been offered in their defense makes sense.
Yet boasting about how easy it is to win a trade war tops almost everything. It adds an element of historical and strategic obliviousness to the administration's economic incompetence.
America's allies and trading partners -- including Japan, Canada, Australia, and the European Union -- are dismayed. If they aren't exempted, they'll feel compelled to retaliate against the U.S. action, just as the U.S. would retaliate against a unilateral rule-bending act of outright protection against its own producers. The administration will then feel pressure to retaliate against the retaliation. After all, it now has to show that trade wars are "easy to win." A self-defeating spiral of this kind is actually the definition of "trade war."
One of the biggest risks of the Trump presidency has always been the harm it might do to the U.S. and global economies through a reckless approach to trade. Norms and institutions have been built over decades to support international cooperation through commerce. The U.S., far from being disadvantaged by this system of liberal trade, has profited enormously. The new tariffs, and the preposterous comments offered in their defense, suggest that Trump wasn't bluffing: He really does want to tear this system down.
The last time this happened was during the 1930s. The Smoot-Hawley tariffs and the retaliation they provoked contributed to the Great Depression and the collapse of the world economy. Mr. President, what exactly was good about that trade war?
--Editors: Clive Crook, Michael Newman.
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