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The First Casualty of the Trade War

Trade wars are good and easily won, President Donald Trump assures us, but we have to admit they make us nervous. Somehow we can’t find a single case in the past several millennia of economic history where a trade war was anything but disastrous and anybody actually won, and with the bluntness Trump’s fans so admire we’ll just come right out and say that we don’t expect his generalship will make his ongoing trade wars come out any better.
Since taking office Trump has been taking on pretty much the entire world, having won the presidency partly on the gripe that the entire world has been taking advantage of America ever since it emerged from the post-World War II ashes as the world’s preeminent economic and military and cultural power, but his biggest battlefront has been with China. On Friday Trump further raised the tariff on $200 billion worth of Chinese goods from an already-high 10 percent to 25 percent, which he apparently is allowed to do under the current constitutional order, and before the closing bell on today’s stock markets China is expected to retaliate in kind. The stock markets have been wildly down and then incrementally up throughout the squabble, on fears that Trump is screwing up a carefully built post-World War II international economic order that has for the most part brought increased peace and prosperity to the world and then faint hopes that the great dealmaker might yet deliver on his promise of the greatest deal ever made.
China is indeed a devious trading partner that dumps its excess supplies on world markets and steals intellectual property and occasionally manipulates its currency and exploits more or less slave labor, as Trump claims and even the looniest Democrats agree, so we’ll not deny that a tough negotiating stance is required. Even so, China has emerged from its post-World War II ashes with an economy that is huge by any measure and even bigger than ours by some suspect measures, and it’s a major client of the agricultural and aviation export industries that make up a huge chunk of our beloved Kansas economy, and we’d prefer it was dealt with in a cautious, carefully deliberated way, informed by history and the best expert opinion. Cautious and carefully deliberated and informed by history and expert opinion is clearly not Trump’s style, on the other hand, so for now we’ll remain just as nervous as the stock markets.
We’re just as rank amateurs about all this global economic order stuff as Trump, but with a bravado he might admire we’ll say we’ll go right ahead and say we would have played it differently. China is indeed taking advantage of America in various insidious way, but it’s doing the same to the rest of the world, so we would have availed ourselves of that Leader of the Free World status America’s wiser leaders rightly earned in the post-war years to unite the rest of the Free World and its overpowering economic might against China, which would surely realize it couldn’t take on the rest of the planet, and might even agree to free trade and human rights and full membership in the modern world. Rank amateurs that we are, we note that even the looniest Democrats and the most impeccably credentialed old-fashioned Republican foreign affairs and trade policy experts seem to agree.
Trump is a bolder sort of fellow than ourselves, however, and he chose to take on the rest of the world, so we have no choice but to hope he’s right. His routine renegotiation of the re-branded North American Free Trade agreement has a few billion in upsides for Wisconsin dairy farmers and a few other industries, which Trump claims are the difference between the worst and best trade deal ever negotiated, but it’s currently stalled in the Republican-majority Senate because of the tariffs Trump used in the negotiations that are currently hurting the economies of states held by free-trade Republicans. Meanwhile in the rest of the Free World the European Union is going through a nasty divorce from the United Kingdom. and Trump is taunting the British Prime Minister with sneering “tweets” and threatening the EU with higher tariffs, and demanding they all pay more for the North Atlantic Treaty Organization. Trump’s Latin American foreign policy seems in retreat in Venezuela, we can’t discern any policy for the “shit-hole” countries in Africa, North Korea is once again conducting missiles test in Asia, where we’re threatening trade wars against everyone, and the possibility of a united front against those undeniably devious Chinese seems remote.
Trump and his most ardent admirers would have us believe that he’s a self-made multi-billionaire who can easily best these Chinese bums in international trade negotiations, but we’ve read enough of the “fake news” to know that he’s a billionaire’s son who’s gone bankrupt six times in casinos and strip-clubs despite house odds and bare breasts, and ran airlines and football teams and scam universities and other ventures in into the ground, and given his well documented business record we don’t trust in his acumen to run an international economy. He’s lately been crowing about all the money his tariffs have been bringing to the federal treasury, but his national economic council director Larry Kudlow had to acknowledge on one of the Sunday news shows that the money is coming from American consumers rather than China, and sooner or later the average Wal-Mart shopper will notice that Trump tells a lot of lies about his trade wars. Our guess is that those wily Cheese have already noticed, and that we’re in for a bumpy ride.

— Bud Norman

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