Once again, President Trump is threatening to attack China’s economy by taxing American consumers.
Last week, Trump promised a 10% tariff on $300 billion in Chinese imports starting Sept. 1. China’s failure to buy more soybeans and stop the sale of fentanyl to the United States were Trump’s specified reasons, but the tariff is part of his ongoing trade war, which is aimed more broadly at reducing the nation’s trade deficit and ending China’s backdoor impediments to U.S. exports.
All those things — stopping fentanyl, boosting soybeans, equalizing the trade balance and truly opening Chinese markets — are appropriate goals, but Trump’s method is self-destructive. If he wants to build the U.S. economy, repeatedly taxing U.S. consumers, damaging export industries and isolating our nation on the world stage aren’t good ideas.
Chinese exporters don’t pay tariffs. U.S. consumers do. And when China strikes back, which it will, the pain will be felt by people whose income relies on exports, especially farmers.
Trump’s occasional shots at other trade partners, including Canada, Mexico and Europe, make the strategy all the more puzzling. We aren’t leading a unified front of free trade nations against Chinese cheating. We’re striking out in all directions and inviting all to take advantage of our self-imposed isolation.
The threat to our national prosperity is real. Last week, the Federal Reserve cut interest rates, citing recessionary anxieties caused by “trade tensions.” If Trump’s tariffs crash the U.S. economy, we’ll see the real casualties of a trade war in soaring unemployment and collapsing farm profits.
It’s worth noting, as the Washington Post did last week, that Trump isn’t the only protectionist willing to jettison our nation’s commitment to free trade. All Massachusetts Sen. Elizabeth Warren’s recently unveiled protectionist trade policy lacked was the phrase “America first.”
The Pax Americana that followed World War II was built on a strategy of free trade among free people. The result has been decades of international growth and domestic prosperity. China has taken advantage of that concept by selling to our markets while restricting its own, but the solution to that problem isn’t to abandon free trade on a unilateral basis.
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