Of all the untrue and unhinged things President Trump has said during his time in office, this ranks as one of the most truly inane: “Trade wars are good and easy to win.”
Virtually all economists of all stripes agree that the president has it exactly wrong. Trade wars are bad, not good, and no country ever “wins” one.
Gregory Mankiw, a Harvard economics professor who advised President George W. Bush, told the Washington Post: “On trade policy, President Trump appears to be listening to advisers with views far outside mainstream economics. I don’t know any respected economist, conservative or liberal, who thinks this is the right approach to promoting prosperity.”
The president’s statement, aimed at bolstering support for his decision to impose heavy tariffs on steel and aluminum imports, plays into a much larger, and deeply dangerous, trend. Trump has declared war on facts, on any independent expert who challenges his puerile prejudices on a vast range of topics.
Intelligence analysts, FBI agents, climate scientists, economists, federal judges — to say nothing of journalists — have all been excoriated by Trump for contradicting his warped view of the world. The president’s chief economic adviser, Gary Cohn, was so dismayed by Trump’s tariff tantrum that he quit.
But Trump’s trade policy is more about politics than economics: a symbolic gesture to fulfill his cynical campaign promise to bring back lost manufacturing jobs. The only folks who cheered his decision are those who share his fantasy that protectionism can revive the shuttered factories blighting the Rust Belt.
“The admin’s steel and aluminum tariffs are good steps toward fixing predatory practices that hurt workers and cheat companies that produce in U.S.,” tweeted Richard Trumka, the president of the AFL-CIO.
From an economic viewpoint, however, the decision has been widely condemned, especially by Republicans, who traditionally support free trade and oppose “industrial policy”: the notion that government should pick winners and losers in the marketplace.
The Wall Street Journal editorial page, a bastion of traditional conservative thinking, called the tariffs “the biggest policy blunder” of Trump’s presidency. They listed many reasons, starting with the likely prospect that trading partners will retaliate against American exports, including Harley-Davidson motorcycles made in Wisconsin, the home state of Speaker Paul Ryan.
Ryan is usually a profile in timidity who seldom breaks with the president, but he could not stomach this one. “We are extremely worried about the consequences of a trade war and are urging the White House to not advance with this plan,” stated his press aide.
Some Republicans are talking about blocking Trump’s tariffs if they cannot convince the president to change his mind. “He’s going to get a lot of resistance on this,” said Sen. John Thune of South Dakota. “It’s a big deal.”
Added Sen. Ron Johnson of Wisconsin: “There’s been an awful lot of advice — this president doesn’t seem to be taking it.”
Producers that have to buy steel at inflated prices will charge consumers more. As Sen. Ben Sasse, a Nebraska Republican, said, “The president is imposing a massive tax increase on American families. Protectionism is weak, not strong. You’d expect a policy this bad from a leftist administration, not a supposedly Republican one.”
The lessons of history are very clear, but in typical Trump fashion, he refuses to accept them. In 2002, President Bush’s imposition of similar tariffs on imported steel cost the economy 200,000 jobs, according to a study by the Trade Partnership, a nonpartisan research firm. The same firm looked at Trump’s proposal and concluded: “More than five jobs would be lost for every one gained.”
Trump argues the tariffs are needed to safeguard national security, but the Journal calls the argument “preposterous” since China supplies only 2 percent of imported steel, and domestic producers are robust enough to supply any possible defense needs.
Trade is not just about jobs and money; it’s also about relationships. And the nations most hurt by Trump’s proposal would not be rivals like China or Russia, but close allies like Canada, South Korea and Mexico.
“The president is going to quickly find out that you can’t start a trade war with your allies and expect them to work with you on other issues,” Jamie Fly, a senior fellow at the German Marshall Fund, told the Washington Post.
Trade wars are not just bad — they are disastrous. And yet this president, in the face of every economic and historical argument, insists he knows better. Can a man so detached from reality be fit to govern the country?
Steve and Cokie Roberts can be contacted by email at firstname.lastname@example.org