Saturday, June 16, 2018

What did Donald Trump do today?

He got his bluff called on sanctions yet again.

Yesterday, Trump announced yet another round of tariffs on Chinese goods. In his statement, Trump warned that any retaliation would be met with further escalations. 

The good news is that it may be slowly registering with Trump that his actions on trade can provoke reactions. When countries find their goods suddenly subject to foreign taxes, they usually make adjustments to their own tariff schemes. Until now, Trump has either been unwilling or unable to believe that this would apply to his tariff increases. In one of the more alarming statements ever made by a U.S. president on the economy, he said that trade wars are "good, and easy to win." 

The bad news is that where billions of dollars are concerned, sternly worded letters instructing competitor nations not to retaliate aren't enough. This morning, China announced another round of retaliatory tariffs on American-made goods and farm products. 

Many American businesses and farmers, as well as consumers in general, have already begun suffering the consequences of Trump's recent trade actions.

Why does this matter?

  • The United States cannot afford to have a president this ignorant of economics.