A Pyrrhic Victory for Trade Hawks

The recently announced trade “truce” with China didn’t last long: Unless negotiators led by Commerce Secretary Wilbur Ross reach a breakthrough in talks scheduled for this weekend, tariffs on Chinese exports are set to be finalized on June 15. That’s a victory for the administration’s trade hawks. It’s also a Pyrrhic one: As currently envisioned, the new measures would hurt the very companies they’re ostensibly trying to protect.

The tariffs have two goals -- to reduce America’s trade deficit with China, but also to undermine China’s efforts to gain an advantage in the industries of the future. While specific targets have yet to be confirmed, the administration’s draft list focused heavily on the kind of high-tech exports China is hoping to boost through its industrial policies. The idea is that making those goods and services more expensive will help preserve the competitive edge of U.S. companies -- a lead that’s being eroded by Chinese subsidies, commercial espionage and infringements on U.S. intellectual property.