The Unwinnable Trade War

Kimberly Ann Elliott tries to make sense of the thinking behind Trump’s escalating trade war with China:

But if the plan is to wait until after 2020 to try and conclude a deal with China, why increase the costs that American consumers and farmers will continue paying during the campaign? What is the end game? Apparently top White House advisers aren’t sure either; all except hard-liner Peter Navarro reportedly tried to talk the president out of imposing the latest tariffs. But Trump has been quite clear that he likes tariffs, and infamously claimed that “trade wars are good, and easy to win.” Maybe he really does believe his own propaganda that China is paying for the tariffs, rather than American companies, farmers and shoppers.

Trump seems to recognize that a strong economy and booming stock market are his best arguments for reelection next year. So why is he putting both at risk with this seemingly endless trade war?

It is always a safe bet that the president doesn’t make well-informed decisions, and it is usually the case that there is no discernible “plan” being implemented. Trump is as impulsive as he is ignorant, and that leads him to sabotage his own stated policy goals through petulant and provocative actions that will backfire on him. He also doesn’t seem to grasp that there are consequences to escalation by the U.S. Trump hasn’t been able or willing to see the connection between his “maximum pressure” campaign and the rising tensions with Iran, and he doesn’t see how ramping up the trade war with threats of additional tariffs predictably leads to an adverse Chinese response.

Because Trump’s approach to diplomacy and trade is zero-sum and all-or-nothing, he isn’t satisfied with anything less than the other side’s capitulation, and when that capitulation doesn’t happen he resorts to applying more pressure. Especially in the case of the trade war, the more pressure he tries to apply the more damage he ends up doing to the U.S. Insofar as Trump genuinely doesn’t understand who ends up paying the cost of his tariffs, he cannot be dissuaded from threatening to increase them because he doesn’t know that he is cutting himself off at the knees in doing so. The president has picked a fight in this trade war that he can’t really win, and he is one of the only people who seems to be unaware that he has already lost.