Skip to main content

frankel99_DrewAngererGettyImages_upsetstockmarketmanUSflag Drew Angerer/Getty Images

The Real Cost of Trump’s Tariffs

Whereas winners tend to outnumber losers when trade is liberalized, raising tariffs normally has the opposite result. US President Donald Trump appears to have engineered a spectacular example of this: his trade war with China has hurt almost every segment of the US economy, and created very few winners.

WASHINGTON, DC – Earlier this month, US President Donald Trump suddenly revealed that a trade agreement between the United States and China was not imminent after all. On the contrary, on May 10, the Trump administration raised its previous 10% tariff on $200 billion worth of Chinese goods to 25%, and threatened to apply the same rate to the remaining $300 billion or so of US imports from China by late June. China then retaliated with reciprocal tariffs on $60 billion worth of US exports, effective June 1. Surprised stock markets fell in response, with the S&P 500 down 4% over the first week of the renewed trade war.

US trade policy is now a hot mess of conflicting goals. Given the current impasse in talks with China, and Trump’s general unpredictability, the inconsistencies of US trade policy – and their costs – are unlikely to go away soon.

For starters, US officials and some prominent economists defend the high US tariffs as a regrettable but temporary expedient, and a necessary means to a strategic end. On this view, the tariffs are a weapon that will enable Trump, the consummate dealmaker, to force concessions from China and America’s other trading partners.

We hope you're enjoying Project Syndicate.

To continue reading, subscribe now.

Subscribe

Get unlimited access to PS premium content, including in-depth commentaries, book reviews, exclusive interviews, On Point, the Big Picture, the PS Archive, and our annual year-ahead magazine.

https://prosyn.org/zI0mt5D;
  1. bildt69_DELIL SOULEIMANAFP via Getty Images_syriansoldiermissilegun Delil Souleiman/AFP/Getty Images

    Time to Bite the Bullet in Syria

    Carl Bildt

    US President Donald Trump's impulsive decision to pull American troops out of northern Syria and allow Turkey to launch a military campaign against the Kurds there has proved utterly disastrous. But a crisis was already inevitable, given the realities on the ground and the absence of a coherent US or Western policy in Syria.

    5

Cookies and Privacy

We use cookies to improve your experience on our website. To find out more, read our updated Cookie policy, Privacy policy and Terms & Conditions