Our editorial: Trade war body count mounting
Wars always come with body counts, and the trade war President Donald Trump is mounting will be no exception. Jobs will be lost, count on it. And the strong economic growth America was just starting to enjoy is now at risk.
Just take a look at the hit the stock market has taken since Trump first began talking of deploying tariffs to erase what he contends is the United States’ severe trade disadvantage with China and some of its other large trading partners.
And while the market is not an accurate gauge of economic health, it is the one Trump touted throughout his first year in office, reminding Americans of how well their pensions and portfolios have fared under his leadership.
Now, those same investors are losing assets with every new round fired in this pointless war. And the escalation continues.
This week, China responded to the list of tariffs the U.S. has placed on a wide range of its goods with levies of its own on American experts ranging from cars to soybeans. Detroit’s auto industry is especially vulnerable, given the amount of business it does in and with China.
And agricultural products are particularly hard hit, putting this country’s farmers in jeopardy. Canada has also joined in, hiking tariffs on newsprint, raising pressure on an already fragile newspaper industry.
This is just the start. Other countries are bound to follow suit, particularly those targeted by Trump’s 25 percent tariffs on imported steel and 15 percent on imported aluminum. Designed to protect steel industry jobs, those tariffs are ironically killing jobs at steel rolling mills that process imported material.
Perhaps the losses would be worth it if the trade war was coming in response to a flagging U.S. economy. But there’s no evidence that trade imbalances are slowing growth at home.
The economy has been enjoying its most robust surge in a decade. The country has reached almost full employment, and the challenge now is to find workers needed to fuel the growth. What economic ill is Trump trying to cure?
It is conventional wisdom that a healthy economy can only suffer from a dose of medicine of the sort Trump is delivering.
His motivation seems to be entirely to deliver on a promise he made on the campaign trail. But populist sound bites don’t often make for good policy. Trump should have continued to talk about the economic boom, and done nothing to derail it.
Now that the war is on, there seems to be no way out. Trump is convinced his measures will back down China and the other nations he believes are exploiting America on trade.
That’s not likely to happen. Instead, we will see more retaliatory measures from China and others targeted by the Trump tariffs.
The president’s new economic adviser Larry Kudlow said Wednesday the tariffs could last for several months.
Republicans should be worried that he means what he says. If the economy follows the established trend of all previous trade wars, the economy will be in the tank by the mid-term elections this fall. And Donald Trump will have squandered the biggest bragging point the GOP had going into those contests.