Trump’s Trade War: Demagoguery Damaging Democracy
…trade wars are good, and easy to win.
That was part of a Donald Trump tweet on March 2, 2018. As usual, the President was wrong on both counts.
With this tweet he was either displaying his ignorance, which is transcendent. Or once again making false or misleading claims, which the Washington Post reports that as of October 13, he had done nearly 13,500 times in the 993 days he has been in office.
Whichever, the consequences of Trump’s trade wars and the rhetoric surrounding them have been negative for the American economy and indeed for the future of our democracy itself. Here is an assessment of where things stand at this point in time, and what could happen going forward.
In mid-September, drawing upon a variety of sources, including charts and commentary from Pantheon Macroenomics, the Institute for Supply Management Manufacturing Index, and the National Federation of Independent Business Small Business Optimism Index, writing for Business Insider, Yusuf Khan reports that the impact of the Trump trade war on the American economy has included the following:
- Manufacturing activity slowing down significantly
- Small businesses not investing because of economic uncertainty
- Exports falling rapidly
- Job growth declining substantially
- Real income threatened because of tariffs increasing the cost of consumer goods
Writing for the New York Times in early October, Ana Swanson states that “until recently, much of the American economy had been insulated from the pain of the trade war.” She attributes this to the fact that because of its large consumer and service base, trade accounts for less than 30 percent of the American economy. This compares to 38 percent for China and 87 percent for Germany.
In her piece, Ms. Swanson notes, however, that although the impact has not been widely felt to date, “…Fed economists estimated that trade policy uncertainty reduced the level of investment in the United states by at least 1 percent in 2018, which equates to several hundred billion dollars.”
The impact of the Trump trade war extends far beyond the boundaries of the United States…