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Trump’s Trade War Throws Good Money After Bad

May 13, 2019 in Economics

By Colin Grabow

Colin Grabow

Since taking office, President Trump has spoken at one time or
another of reaching trade deals with China, Japan, the European
Union, Canada and Mexico among others. But all that has so far been
achieved is higher tariffs and a plunging stock market. The
president’s vaunted trade agenda appears in tatters.

On the trade war’s Pacific front, the imposition of
tariffs on $250 billion worth of Chinese imports has failed to
persuade Beijing to open up its market. But it has raised the cost
of production for U.S. businesses and the cost of living for
American families as well as led to retaliatory tariffs on nearly
all U.S. exports. More than mere tariffs will be required for China
to meet American demands, with U.S. negotiators reportedly admitting
their inability to “force any changes that aren’t in
China’s interest.”

Perhaps the most
maddening aspect of this sordid trade saga is that it didn’t have
to be this way.

Well, who could have seen that coming?

And now things are set to get even worse. Faced with China’s
continued refusal to meet his demands,t Trump has threatened to
double down by imposing tariffs on all imports from China. It’s
unclear why this will succeed where his previous efforts failed,
but anyone considering a new phone, computer or television should
consider making that purchase sooner rather than later.

China, however, is only the most glaring example of Trump’s
trade misadventures.

A trade deal with the EU has thus far failed to show signs of
materializing, which is no surprise given that the two sides seem
unable to even agree on negotiating objectives. Rather than opening
its market to U.S. exports, the EU has so far done the opposite,
slapping tariffs on products such as bourbon, jeans and motorcycles in retaliation for Trump’s steel
and aluminum tariffs. And the EU is said to be readying more such measures if Trump
proceeds with plans to impose tariffs on foreign autos.

It’s a similar story with Japan, about which there’s been much
talk about a trade deal but little in the way of actual movement.
As with the EU, there seems to be little common ground on the scope
of such a deal, and Japan may be more interested in using talks to
forestall threatened auto tariffs than actually reaching an
agreement.

Even the one deal that Trump has managed to conclude, the
U.S.-Mexico-Canada Agreement (USMCA), is facing a daunting path to
congressional approval. The Democrat-controlled House is far from
eager to hand the president a victory, while Sen. Charles Grassley
(R-IA) <a target=_blank href="https://www.wsj.com/articles/trumps-tariffs-end-or-his-trade-deal-dies-11556479697" …read more

Source: OP-EDS

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