Via the New York Times:
Trump’s tariffs were initially seen as a cudgel to force other countries to drop their trade barriers. But they increasingly look like a more permanent tool to shelter American industry, block imports and banish an undesirable trade deficit.
More than two years into the Trump administration, the United States has emerged as a nation with the highest tariff rate among developed countries, outranking Canada, Germany and France, as well as China, Russia and Turkey. And with further trade confrontations brewing, the rate may only increase from here.
On Tuesday, the president continued to praise his trade war with China, saying that the 25 percent tariffs he imposed on $250 billion worth of Chinese goods would benefit the United States, and that he was looking “very strongly” at imposing additional levies on nearly every Chinese import.
“I think it’s going to turn out extremely well. We’re in a very strong position,” Mr. Trump said in remarks from the White House lawn. “Our economy is fantastic; theirs is not so good. We’ve gone up trillions and trillions of dollars since the election; they’ve gone way down since my election.”
He called the trade dispute “a little squabble” and suggested he was in no rush to end his fight, though he held out the possibility an agreement could be reached, saying: “They want to make a deal. It could absolutely happen.” Stock markets rebounded on Tuesday, after plunging on Monday as China and the United States resumed their tariff war.
Additional tariffs could be on the way. Mr. Trump faces a Friday deadline to determine whether the United States will proceed with his threat to impose global auto tariffs, a move that has been criticized by car companies and foreign policymakers. And despite complaints by Republican lawmakers and American companies, Mr. Trump’s global metal tariffs remain in place on Canada, Mexico, Europe and other allies.
The trade barriers are putting the United States, previously a steadfast advocate of global free trade, in an unfamiliar position. The country now has the highest overall trade-weighted tariff rate at 4.2 percent, higher than any of the Group of 7 industrialized nations, according to Torsten Slok, the chief economist of Deutsche Bank Securities. That is now more than twice as high as the rate for Canada, Britain, Italy, Germany and France, and higher than most emerging markets, including Russia, Turkey and even China, Mr. Slok said.
The shift is having consequences for an American economy that is dependent on global trade, including multinational companies like Boeing, General Motors, Apple, Caterpillar and other businesses that source components from abroad and want access to growing markets overseas.
While trade accounts for a smaller percentage of the American economy than in most other countries — just 27 percent in 2017, compared with 38 percent for China and 87 percent for Germany, according to World Bank data — it is still a critical driver of jobs and economic growth.
For now, the American economy remains strong, with rising wages and the lowest unemployment rate in 50 years. But with less trade, American jobs up and down the value chain that are seemingly unrelated to importing and exporting goods could suffer, including research and development, retail and marketing products.
Trump has promised, as he has in the past, to make it up to the farmers who lose money by having China hit back with retaliatory tariffs against their products. In other words, he’s saying he’ll get them $15 billion in subsidies to keep them afloat because of something he did (as opposed to helping, oh, say, Puerto Rico recover from a hurricane or Flint get drinkable water). He apparently thinks the farmers of America can be bought off like his one-night stands with women-not-his-wife. And I think we all know how well he keeps his promises.
The sad fact is that the majority of the farmers who are hit by these tariffs in all likelihood supported Trump in the last election and are with him now even as he takes away their markets and promises to put them on the welfare rolls. He’s seen it work before — frighten them with abstract fears about Others like undocumented immigrants (many of whom keep farms in business by doing the labor) or lesbians getting married in New York, unlike that nice couple who run the candle store in town — so why not try it again? He knows his marks; he’s run his businesses that way for fifty years and gets his jollies — if not his profits — by getting away with the con.