Trade wars

Trump’s Trade War With China Doesn’t Look Like a Win

In March 2018, President Donald Trump uttered his famous declaration that “trade wars are good and easy to win.” A little more than a year later, it looks as if Trump is losing the trade war he started with China.

The tariffs that Trump slapped on Chinese goods -- and the additional tariffs he threatened -- may have dinged China’s economy. Most data sources indicate that Chinese growth slowed a bit in 2018. That dip could have been due to government efforts to constrain credit growth, but many believe that Trump’s tariffs hurt business confidence and slowed investment. That makes sense, since any company thinking about making their products in China would have to worry that Trump would make it hard to sell those products in the U.S. The trade war has given multinationals an incentive to accelerate their plans to shift production out of China, and has probably made Chinese companies more cautious as well..

But the U.S. was also sideswiped by the trade war. Taxing Chinese-made products raised prices for American consumers and factories alike. A pair of studies by trade economists put the losses to the U.S. economy in the tens of billions of dollars annually.