{"id":82980,"date":"2024-06-28T02:52:04","date_gmt":"2024-06-28T02:52:04","guid":{"rendered":"https:\/\/news.talkwithrattan.com\/index.php\/2024\/06\/28\/trump-eyes-bigger-trade-war-in-second-term\/"},"modified":"2024-06-28T02:52:05","modified_gmt":"2024-06-28T02:52:05","slug":"trump-eyes-bigger-trade-war-in-second-term","status":"publish","type":"post","link":"https:\/\/news.talkwithrattan.com\/index.php\/2024\/06\/28\/trump-eyes-bigger-trade-war-in-second-term\/","title":{"rendered":"Trump Eyes Bigger Trade War in Second Term"},"content":{"rendered":"<div style=\"text-align:center\"><img loading=\"lazy\" decoding=\"async\" width=\"1050\" height=\"549\" src=\"https:\/\/i3.wp.com\/static01.nyt.com\/images\/2024\/06\/27\/multimedia\/27dc-trade-01-pghc\/27dc-trade-01-pghc-facebookJumbo.jpg?resize=1050,549&amp;ssl=1\" class=\"attachment-post-thumbnail size-post-thumbnail wp-post-image\" alt=\"Trump Eyes Bigger Trade War in Second Term\" title=\"Trump Eyes Bigger Trade War in Second Term\" \/><\/div><p> <br \/>\n<\/p>\n<div>\n<div class=\"css-53u6y8\">\n<p class=\"css-at9mc1 evys1bk0\">In March 2018, a day after announcing sweeping tariffs on metals imported from America\u2019s allies and adversaries alike, President Donald J. Trump <a class=\"css-yywogo\" href=\"https:\/\/x.com\/realDonaldTrump\/status\/969525362580484098\" title=\"\" rel=\"noopener noreferrer\" target=\"_blank\">took to social media<\/a> to share one of his central economic philosophies: \u201cTrade wars are good, and easy to win.\u201d<\/p>\n<p class=\"css-at9mc1 evys1bk0\">As president, Mr. Trump presided over the biggest increase in U.S. tariffs since the Great Depression, hitting China, Canada, the European Union, Mexico, India and other governments with stiff levies. They hit back, imposing tariffs on American soybeans, whiskey, orange juice and motorcycles. U.S. agricultural exports <a class=\"css-yywogo\" href=\"https:\/\/www.usitc.gov\/publications\/332\/executive_briefings\/chinasoyebot.pdf\" title=\"\" rel=\"noopener noreferrer\" target=\"_blank\">plummeted<\/a>, prompting Mr. Trump to send <a class=\"css-yywogo\" href=\"https:\/\/www.gao.gov\/products\/gao-22-104259\" title=\"\" rel=\"noopener noreferrer\" target=\"_blank\">$23 billion<\/a> to farmers to help offset losses.<\/p>\n<p class=\"css-at9mc1 evys1bk0\">Now, as he runs for president again, Mr. Trump is promising to ratchet up his trade war to a much greater degree. He has proposed \u201cuniversal baseline tariffs on most foreign products,\u201d including higher levies on certain countries that devalue their currency. In interviews, he has floated plans for <a class=\"css-yywogo\" href=\"https:\/\/www.foxbusiness.com\/video\/6334380407112\" title=\"\" rel=\"noopener noreferrer\" target=\"_blank\">a 10 percent tariff<\/a> on most imports and a tariff of <a class=\"css-yywogo\" href=\"https:\/\/www.youtube.com\/watch?v=WAg99owBB6w\" title=\"\" rel=\"noopener noreferrer\" target=\"_blank\">60 percent or more<\/a> on Chinese goods. He has also posited cutting the federal income tax and relying on tariffs for revenue instead.<\/p>\n<p class=\"css-at9mc1 evys1bk0\">Mr. Trump, who once <a class=\"css-yywogo\" href=\"https:\/\/x.com\/realDonaldTrump\/status\/1069970500535902208\" title=\"\" rel=\"noopener noreferrer\" target=\"_blank\">proclaimed himself<\/a> \u201cTariff Man,\u201d has long argued that tariffs would boost American factories, end the gap between what America imported and what it exported and increase American jobs.<\/p>\n<\/div>\n<aside class=\"css-ew4tgv\" aria-label=\"companion column\"\/><\/div>\n<div>\n<div class=\"css-53u6y8\">\n<p class=\"css-at9mc1 evys1bk0\">His first round of levies hit more than $400 billion worth of imports, including steel, solar panels, washing machines and Chinese goods like smart watches, chemicals, bicycle helmets and motors. His rationale was that import taxes would revive American manufacturing, reduce reliance on foreign goods and allow U.S. companies to better compete against cheap products from China and other countries.<\/p>\n<p class=\"css-at9mc1 evys1bk0\">Economists say the tariffs did reduce imports and encouraged U.S. factory production for certain industries, including steel, semiconductors and computer equipment. But that came at a very high cost, one that most likely offset any overall gains. Studies show that the tariffs <a class=\"css-yywogo\" href=\"https:\/\/www.nber.org\/system\/files\/working_papers\/w26610\/w26610.pdf\" title=\"\" rel=\"noopener noreferrer\" target=\"_blank\">resulted in higher prices<\/a> for American consumers and factories that depend on foreign inputs, and <a class=\"css-yywogo\" href=\"https:\/\/www.ers.usda.gov\/webdocs\/publications\/102980\/err-304.pdf\" title=\"\" rel=\"noopener noreferrer\" target=\"_blank\">reduced U.S. exports<\/a> for certain goods that were subject to retaliation.<\/p>\n<p class=\"css-at9mc1 evys1bk0\">Mr. Trump is now envisioning taxing perhaps 10 times as many imports as he did during his first term, an approach that economists say could trigger a trade war that drives up already high prices and plunges the U.S. into a recession.<\/p>\n<p class=\"css-at9mc1 evys1bk0\">David Autor, an economics professor at the Massachusetts Institute of Technology, said the proposals would have \u201ca very large effect on prices almost immediately.\u201d<\/p>\n<p class=\"css-at9mc1 evys1bk0\">\u201cI don\u2019t think they\u2019ll do it,\u201d Mr. Autor said. \u201cIt could easily cause a recession.\u201d<\/p>\n<p class=\"css-at9mc1 evys1bk0\">In a recent letter, 16 Nobel Prize-winning economists wrote that they were \u201cdeeply concerned\u201d about the risks a second Trump administration posed to the economy, inflation and the rule of law.<\/p>\n<\/div>\n<aside class=\"css-ew4tgv\" aria-label=\"companion column\"\/><\/div>\n<div>\n<div class=\"css-53u6y8\">\n<p class=\"css-at9mc1 evys1bk0\">\u201cWe believe that a second Trump term would have a negative impact on the U.S.\u2019s economic standing in the world and a destabilizing effect on the U.S.\u2019s domestic economy,\u201d they wrote.<\/p>\n<p class=\"css-at9mc1 evys1bk0\">Mr. Trump and his supporters have a much more positive view of tariffs, arguing that they serve as leverage with foreign governments, reduce <a class=\"css-yywogo\" href=\"https:\/\/www.nytimes.com\/2024\/02\/07\/business\/economy\/united-states-china-mexico-trade.html\" title=\"\">the trade deficit with China<\/a> and result in the growth of <a class=\"css-yywogo\" href=\"https:\/\/fred.stlouisfed.org\/series\/MANEMP\" title=\"\" rel=\"noopener noreferrer\" target=\"_blank\">U.S. manufacturing jobs<\/a>.<\/p>\n<p class=\"css-at9mc1 evys1bk0\">\u201cI happen to be a big believer in tariffs because I think tariffs give you two things: They give you economic gain, but they also give you political gain,\u201d Mr. Trump said on <a class=\"css-yywogo\" href=\"https:\/\/www.happyscribe.com\/public\/all-in-with-chamath-jason-sacks-friedberg\" title=\"\" rel=\"noopener noreferrer\" target=\"_blank\">a recent podcast<\/a>.<\/p>\n<p class=\"css-at9mc1 evys1bk0\">Karoline Leavitt, the Trump campaign national press secretary, said in a statement that \u201cthe American people don\u2019t need worthless out-of-touch Nobel Prize winners to tell them which president put more money in their pockets.\u201d<\/p>\n<p class=\"css-at9mc1 evys1bk0\">\u201cPresident Trump built the strongest economy in American history,\u201d she said. \u201cIn just three years, Joe Biden\u2019s out-of-control spending created the worst inflation crisis in generations.\u201d<\/p>\n<\/div>\n<aside class=\"css-ew4tgv\" aria-label=\"companion column\"\/><\/div>\n<div>\n<div class=\"css-53u6y8\">\n<p class=\"css-at9mc1 evys1bk0\">Jamieson L. Greer, a partner in the international trade team at King &amp; Spalding, who was involved with China trade negotiations during the Trump administration, said the view of Trump officials was that tariffs \u201ccan help support U.S. manufacturing jobs in particular, especially to the extent that they\u2019re remediating an unfair trade practice.\u201d<\/p>\n<p class=\"css-at9mc1 evys1bk0\">China has long engaged in policies that disadvantage American workers, but other countries also have unfair trade and tax policies or misaligned currencies, Mr. Greer said.<\/p>\n<p class=\"css-at9mc1 evys1bk0\">\u201cIf you level out that playing field, it makes it so that Americans don\u2019t have to compete unfairly,\u201d he said.<\/p>\n<p class=\"css-at9mc1 evys1bk0\">Mr. Trump\u2019s tariffs have domestic supporters among the industries that have benefited from them. And President Biden gave them his own stamp of approval by choosing to <a class=\"css-yywogo\" href=\"https:\/\/www.nytimes.com\/2024\/05\/14\/us\/politics\/biden-china-tariffs.html\" title=\"\">keep Mr. Trump\u2019s China tariffs<\/a> in place while adding some of his own, including on electric cars, steel and semiconductors.<\/p>\n<p class=\"css-at9mc1 evys1bk0\">But some of the industries that were hit hardest by Mr. Trump\u2019s trade wars are not looking forward to a sequel. Executives in sectors like retail and spirits worry that another round of tariffs could reignite tensions, raise their costs and again close off critical markets abroad.<\/p>\n<\/div>\n<aside class=\"css-ew4tgv\" aria-label=\"companion column\"\/><\/div>\n<div>\n<div class=\"css-53u6y8\">\n<p class=\"css-at9mc1 evys1bk0\">Spirit exports to Europe declined by 20 percent after the European Union imposed a 25 percent retaliatory tariff on American whiskey in response to the Trump administration\u2019s tariffs on steel and aluminum. And the China tariffs increased the prices that retailers had to pay for their products, forcing them to either raise prices for their customers or cut into their profits.<\/p>\n<p class=\"css-at9mc1 evys1bk0\">\u201cWe need a trade policy, not just more tariffs,\u201d said David French, executive vice president of government relations at the National Retail Federation. His group, which represents department stores, e-commerce sites and grocers, ran a television ad campaign opposing the Trump tariffs in 2018. \u201cAll they\u2019ve done is add friction to the supply chain and cost consumers $220 billion.\u201d<\/p>\n<p class=\"css-at9mc1 evys1bk0\">\u201cFormer President Trump looks at trade as some sort of zero-sum game \u2014 if you win, I lose and vice versa,\u201d Mr. French said. \u201cThat\u2019s really not the way trade works.\u201d<\/p>\n<\/div>\n<aside class=\"css-ew4tgv\" aria-label=\"companion column\"\/><\/div>\n<div>\n<div class=\"css-53u6y8\">\n<p class=\"css-at9mc1 evys1bk0\">The power of tariffs to help or hinder exports is clear in industries that eventually won a reprieve. In 2021, whiskey tariffs were temporarily suspended as part of a deal the Biden administration made with the European Union. American whiskey exports to the bloc rose from $439 million in 2021 to $705 million last year.<\/p>\n<\/div>\n<aside class=\"css-ew4tgv\" aria-label=\"companion column\"\/><\/div>\n<div>\n<div class=\"css-53u6y8\">\n<p class=\"css-at9mc1 evys1bk0\">Chris Swonger, the chief executive of the Distilled Spirits Council of the United States, said he was hopeful that, if re-elected, Mr. Trump would appreciate that strong exports of American spirits would help achieve his goal of reducing the trade deficit. The lobbying group wants the E.U. tariff suspension, which expires next March, to be extended.<\/p>\n<p class=\"css-at9mc1 evys1bk0\">\u201cFor President Trump, obviously we appreciate and respect his efforts to reduce the trade deficit,\u201d said Mr. Swonger, who has made his case to Trump campaign officials. \u201cImposing tariffs on distilled spirits would be counter to reducing the trade deficit.\u201d<\/p>\n<p class=\"css-at9mc1 evys1bk0\">Research suggests the tariffs did accomplish their goal of increasing domestic production in the industries they protected, but did so by imposing other costs on the U.S. economy.<\/p>\n<p class=\"css-at9mc1 evys1bk0\"><a class=\"css-yywogo\" href=\"https:\/\/www.usitc.gov\/press_room\/news_release\/2023\/er0315_63679.htm\" title=\"\" rel=\"noopener noreferrer\" target=\"_blank\">One nonpartisan government study<\/a> found that the tariffs on foreign steel and aluminum increased U.S. production of those metals by $2.2 billion in 2021. But American factories that use steel and aluminum to make other things, like cars, tin cans and appliances, had to pay higher costs for their materials, and that reduced the output of those factories by $3.5 billion in the same year.<\/p>\n<p class=\"css-at9mc1 evys1bk0\">Studies suggest the tariffs also had a mixed record when it came to jobs. In a recent paper, Mr. Autor and other economists found that the cumulative effect of Mr. Trump\u2019s trade policies and other countries\u2019 retaliation was <a class=\"css-yywogo\" href=\"https:\/\/www.nytimes.com\/2024\/02\/02\/us\/politics\/trump-tariffs-jobs-voters.html\" title=\"\">slightly negative for American jobs<\/a>, or at best a wash.<\/p>\n<\/div>\n<aside class=\"css-ew4tgv\" aria-label=\"companion column\"\/><\/div>\n<div>\n<div class=\"css-53u6y8\">\n<p class=\"css-at9mc1 evys1bk0\">In terms of inflation, <a class=\"css-yywogo\" href=\"https:\/\/econofact.org\/wp-content\/uploads\/2019\/10\/2-Edits-Table-of-estimates-_1_.pdf\" title=\"\" rel=\"noopener noreferrer\" target=\"_blank\">studies have estimated<\/a> that American households faced higher prices as a result of the tariffs \u2014 from several hundred dollars to more than $1,000 annually.<\/p>\n<p class=\"css-at9mc1 evys1bk0\">But economists say consumers probably did not associate the higher prices they paid with the tariffs, given that inflation was low throughout Mr. Trump\u2019s tenure and the economy was strong.<\/p>\n<p class=\"css-at9mc1 evys1bk0\">While the economy remains robust, prices have spiked since 2021, and inflation remains elevated. That could make tariff-induced price increases more obvious and more painful this time around.<\/p>\n<p class=\"css-at9mc1 evys1bk0\"><a class=\"css-yywogo\" href=\"https:\/\/www.piie.com\/publications\/policy-briefs\/2024\/why-trumps-tariff-proposals-would-harm-working-americans\" title=\"\" rel=\"noopener noreferrer\" target=\"_blank\">A recent analysis<\/a> by the Peterson Institute of International Economics found that if Mr. Trump did impose a 10 percent tariff on all goods and a 60 percent tariff on China, it would cost a typical household in the middle of the income distribution about $1,700 in increased expenses each year.<\/p>\n<p class=\"css-at9mc1 evys1bk0\">Another analysis, by the right-leaning American Action Forum, estimated that a 10 percent tariff could impose additional annual costs of up to $2,350 per American household. Adding a 60 percent tariff on China would add another $1,950 to U.S. household costs.<\/p>\n<\/div>\n<aside class=\"css-ew4tgv\" aria-label=\"companion column\"\/><\/div>\n<div>\n<div class=\"css-53u6y8\">\n<p class=\"css-at9mc1 evys1bk0\">The burden of those tariffs would fall more heavily on poorer households, because they spend a larger share of their income on everyday products.<\/p>\n<p class=\"css-at9mc1 evys1bk0\">That could ultimately backfire on Mr. Trump, given that voter concerns about inflation are top of mind.<\/p>\n<p class=\"css-at9mc1 evys1bk0\">As he waited in line to attend Mr. Trump\u2019s rally on Saturday in Philadelphia, Paul Rozick, an electrical warehouse manager from Bensalem, Pa., said high grocery and gas prices had outpaced his pay raises.<\/p>\n<p class=\"css-at9mc1 evys1bk0\">\u201cInflation is going up like 20 percent, but our paychecks go up like 2 percent,\u201d Mr. Rozick said. \u201cI\u2019ve got less money in the bank because I\u2019m spending more money when I walk out the door.\u201d<\/p>\n<\/div>\n<aside class=\"css-ew4tgv\" aria-label=\"companion column\"\/><\/div>\n<p><br \/>\n<br \/><a href=\"https:\/\/www.nytimes.com\/2024\/06\/27\/us\/politics\/trump-trade-tariffs-imports.html\">Source link <\/a><\/p>\n","protected":false},"excerpt":{"rendered":"<p>In March 2018, a day after announcing sweeping tariffs on metals imported from America\u2019s allies and adversaries alike, President Donald J. Trump took to social media to share one of his central economic philosophies: \u201cTrade wars are good, and easy to win.\u201d As president, Mr. Trump presided over the biggest increase in U.S. tariffs since [&hellip;]<\/p>\n","protected":false},"author":2,"featured_media":82981,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"tdm_status":"","tdm_grid_status":"","fifu_image_url":"https:\/\/static01.nyt.com\/images\/2024\/06\/27\/multimedia\/27dc-trade-01-pghc\/27dc-trade-01-pghc-facebookJumbo.jpg","fifu_image_alt":"","footnotes":""},"categories":[1],"tags":[1166,1587,6185,14195,52,3102],"amp_enabled":true,"_links":{"self":[{"href":"https:\/\/news.talkwithrattan.com\/index.php\/wp-json\/wp\/v2\/posts\/82980"}],"collection":[{"href":"https:\/\/news.talkwithrattan.com\/index.php\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/news.talkwithrattan.com\/index.php\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/news.talkwithrattan.com\/index.php\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/news.talkwithrattan.com\/index.php\/wp-json\/wp\/v2\/comments?post=82980"}],"version-history":[{"count":1,"href":"https:\/\/news.talkwithrattan.com\/index.php\/wp-json\/wp\/v2\/posts\/82980\/revisions"}],"predecessor-version":[{"id":82982,"href":"https:\/\/news.talkwithrattan.com\/index.php\/wp-json\/wp\/v2\/posts\/82980\/revisions\/82982"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/news.talkwithrattan.com\/index.php\/wp-json\/wp\/v2\/media\/82981"}],"wp:attachment":[{"href":"https:\/\/news.talkwithrattan.com\/index.php\/wp-json\/wp\/v2\/media?parent=82980"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/news.talkwithrattan.com\/index.php\/wp-json\/wp\/v2\/categories?post=82980"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/news.talkwithrattan.com\/index.php\/wp-json\/wp\/v2\/tags?post=82980"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}