Trade Wars

Alan Zendell, June 1, 2018

It seems that Donald Trump was serious when he said trade wars are good, although his chimeric, narcissistic nature suggests that we should not infer anything specific until it actually happens. Talk is cheap, and it’s worth even less when successive statements continually contradict each other,

Trade war talk has been on again, off again since the day Trump announced his candidacy for president. Initially it consisted of vitriolic verbal attacks on China and its leaders, but rapidly expanded to include the North American Free Trade Agreement (NAFTA) and the Trans-Pacific Partnership (TPP), basically an all-out assault on the concept of free and open world trade.

Although establishment Republicans were horrified by these positions, one by one, they caved in and got in line, as the Trump juggernaut gained steam. The conventional wisdom was that to some degree, Trump was just pandering to disgruntled voters who felt they’d been left behind by the establishment wings of both parties. Surely he’d never follow through on all his outrageous threats and ideas, would he?

It’s hard to know what goes on in the mind of Donald Trump though it’s clear that he’s driven by the belief that he’s better than anyone else at “fixing” the country. Casting himself in the role of the hero America needed to be great again tapped into simmering anger and resentment in what came to be known as his base. Unfortunately, much of that anger and resentment was racist, ultra-nationalistic, and xenophobic, which gave his base a rabid, explosive quality.

Perhaps Trump meant all those things he said. Maybe he wasn’t only pandering. Or maybe he created a symbiotic monster that he can’t escape. Maybe his lust for power is so great that the fear of losing his base is now the only thing driving him. His base feeds on the slurs and insults he throws out at the people Trump tells them are responsible for everything they’re angry about. And he in turn feeds on their adoration. It’s an addictive cycle that might be impossible for a megalomaniacal narcissist like Trump to break.

Maybe that’s what made him decide to follow through on his trade war threats. No other explanation makes any sense. We’ve already heard from American soybean farmers, beer makers, and whiskey distillers that Trump’s tariffs will raise their costs and reduce their profits – that is, if they don’t ruin their businesses completely. Everything gets more expensive when diesel and gasoline prices rise, and Trump’s policies on trade, Iran, and the environment could combine to form a perfect storm that triggers an inflationary spiral in energy costs. And all that may be just the tip of the iceberg in terms of the damage he can do at home.

But what of the rest of the world? Martin Kettle, writing in the Guardian today, expressed the concern of many of our European allies: “Trump’s trade war threatens global peace.” He views Trump’s tariffs as a declaration of war against Europe, and gives voice to a growing belief that “the disruption that [Trump] has deliberately inflicted on Europe marks a turning point. It declares us America’s enemies.” That’s not just rhetoric. Europeans have felt the brunt of Trump’s America First populism since the day he took office and now worry that they can no longer depend on a strong Atlantic alliance.

Columbia University Professor Jeffrey Sachs writes that “Trump is rapidly destroying American global leadership, alliances, and interests.” His tariffs on steel and aluminum appear to be a direct assault on Canada and the European Union, and his continuing insults directed at Mexico serve no purpose other than red meat for his political base. Professor Sachs laid out what he sees as the consequences for such actions: “Harming our closest allies … and provoking retaliation cannot possibly deliver higher wages, better jobs, or an improved trade balance. Trump’s latest notion to slap tariffs on German automobiles would be even more damaging geopolitically.” The EU will fight Trump in the World Trade Organization’s trade court, though it would surprise no one if Trump told them to go to Hell.

For no explicable reason, Trump seems to take particular delight in targeting Canada. Canada? Pretending to be interested in re-negotiating NAFTA, he has imposed a condition that he knows Canada cannot accept, though its value to the United States other than political is hard to discern. He now insists that any revised NAFTA agreement contain a five-year sunset clause, which Canadian Prime Minister Justin Trudeau had said Canada would never accept. Trudeau further labeled Trump’s tariffs on Canadian steel and aluminum “totally unacceptable,” saying retaliation against the United States is necessary.

We haven’t heard words like that coming out of Canada since the French and Indian War.

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