He’s waging trade war on multiple fronts, so far more of a skirmish than all-out conflict, but what starts small risks becoming far more dangerous than now.
China, Europe, Canada and Mexico responded to his tariffs with duties of their own. Trump threatened more, a vicious cycle if things go on without resolution.
He asked his trade representative to identify $200 billion worth of Chinese goods for additional tariffs of 10%. Maybe he’ll up it to 20% or more, including on another $200 billion if China retaliates in kind.
Beijing warned it’ll respond tit-for-tat to his actions, calling the Trump regime an “initiator of evil…seeking moral pretexts for (a) trade war” through its Global Times publication, adding:
“The White House has gathered together extreme ideologists, geopolitical hardliners and populists to seek supposed fairness.” Their agenda if pursued too far could cause enormous global economic damage.
On Friday, Trump potentially upped the stakes tweeting: “Based on the Tariffs and Trade Barriers long placed on the US and it great companies and workers by the European Union, if these Tariffs and Barriers are not soon broken down and removed, we will be placing a 20% Tariff on all of their cars coming into the US. Build them here!”
The EU responded saying additional US tariffs “would be met with equivalent penalties imposed by affected trading partners.”
Trump claiming the right to impose tariffs on targeted nation on grounds of national defense and security is one of many examples of how far he goes to distort hard truths.
A 1960s law gives the president authority to impose duties or other import restrictions on foreign cars and light trucks he claims are eroding America’s auto industry.
Although the Constitution grants Congress tariff-imposition authority, congressional legislation delegates the power to presidents under the following circumstances:
• under the 1917 Trading with the Enemy Act against any nation as long as America is at war somewhere;
• under the 1977 Emergency Economic Powers Act – during a real or invented national emergency; no legitimate one existed in America since WW II ended;
• under the 1974 Trade Act, permitting across-the-board tariffs – based on an allegedly needing to confront an adverse impact on national security from imports; and
• under the 1962 Trade Expansion Act, targeting certain industries like autos.
If things devolve to trade war, millions of jobs could be lost in America and elsewhere, global economies taking a big hit.
Protectionist policies exacerbated the Great Depression’s severity. They didn’t cause the economic crisis. They made things worse than otherwise and hampered recovery when production fell.
Beggar-thy-neighbor trade policies don’t work. Trump’s trade policy is foolhardy, a loser’s game if he takes things too far for too long.
Commenting on what’s going on, Nomi Prins cited an analysis of trade war damage, saying:
“(I)f global tariffs were to rise just 10%, the gross national product (GDP) of most countries would fall by between 1% and 4.5% – the US GDP by 1.3%, China’s by 4.3%. A 40% rise in tariffs would ensure a deep global recession or depression.”
WW II followed economic collapse in the 1930s. Would lunatics surrounding Trump use severe economic crisis conditions as a pretext for another global war – potentially with nuclear weapons endangering everyone everywhere?