The Trump administration appears to be headed for a trade war on three fronts. As far as anyone can tell, it is simultaneously going to take on China, the European Union and our partners in the North American Free Trade Agreement. The economic fallout will be ugly.
But that’s probably not the whole story: There’s also likely to be ugly political fallout, not just abroad but here at home, too. In fact, I predict that as the downsides of hard-line trade policy become apparent, we’ll see a nasty search by President Trump and company for people to scapegoat. In fact, that search has already started.
To understand what’s coming, you need to understand two crucial points.
First, the administration has no idea what it’s doing. Its ideas on trade don’t seem to have evolved at all from those expressed in a
white papercirculated by Wilbur Ross, now the commerce secretary, and Peter Navarro, now the trade czar, in 2016. That white paper was a display of sheer ignorance that had actual trade experts banging their heads on their desks. So these people are completely unprepared for the coming blowback.
Second, this administration is infested — I use that word
advisedly — with conspiracy theorists. In fact, it seems, literally, to treat belief in absurd conspiracy theories as a job qualification. You may remember the case of an official at the Department of Health and Human Services who was temporarily suspended after reports that she had worked for a conspiracy-theory website. Well, it turns out that she listed that connection
on her résumé when she applied for government employment. She was hired not despite but because of her connection to paranoid politics.
So what will happen when cluelessness meets conspiracy theorizing?
About that trade blowback: Trump
famously declared that “trade wars are good, and easy to win.” Never mind the goodness issue: It’s already becoming apparent that the “easy to win” part is delusional. Other countries won’t quickly give in to U.S. demands, in part because those demands are incoherent — Trump is demanding that Europe end the “horrific” tariffs it
doesn’t actually impose, while the Chinese can’t even figure out what the Trump administration wants, with
officials callingAmerica “capricious.”
Add in the enormous amount of ill will Trump has generated around the world, and the idea that America is going to get major concessions anytime soon is deeply implausible. In fact, I’m finding it hard to see how we avoid a series of tit-for-tat retaliations that end up taking us well down the path toward
full-blown trade war.