Trade Wars Are Bad and Hard to Win… But China Isn’t Innocent Here
Excerpt: It’s awful to see the way this administration is constantly accusing China of unfair trade practices — export duties on various metals, imposing duties on American chicken, exempting domestically made aircraft from certain taxes while imposing them on American-made aircraft, and excessively subsidizing its corn, wheat, and rice production. Wait, wait, never mind — all of those U.S. actions before the World Trade Organization were filed during the second term of the Obama administration. It’s easy to tire of President Donald Trump’s surface-level understanding of trade; he seems to think that only a perfect equilibrium of even value of imports to exports is fair. His public fuming against Harley Davidson, and threats that if they move production overseas, the company will be “taxed like never before!” go right up to the line of abuse of presidential power. His declaration that “trade wars are good and easy to win!” suggests an astounding ignorance of economics and history. But down the street and around the corner from Trump’s position is the legitimate point that China does not play fair — it signs trade agreements, and then violates them, and the U.S. has to go to the WTO to sort it out. The good news for the United States is that they’ve won their past 16 fights against China before the WTO. The bad news is that the WTO can take years to hash out these fights, and while the WTO is reviewing and deliberating, American companies have to live with unfair tariffs.