The list of things that make liberals afraid can seem comical at times: hot weather, police, financial success, mean words, and prayer are just some topics that form a non-exhaustive list of the left’s boogeymen. We can now add a new terreur du jour: the media-spun fear that President Donald Trump will launch a trade war on his first day in office.
Leaving aside the fact that many liberals would wholeheartedly support such a trade war if Liberal mouthpiece Paul Krugman wrote a 250-word essay in favor of it, many do not know what a trade war means, and many more still will not bother to learn.
A starting point would be to understand that the United States is engaging in a number of trade wars at the moment. Trade wars aren’t hypothetical doomsday scenarios, but real leverage used to put pressure on nations without starting an actual war.
Sanctions on countries like Russia and Iran make it more difficult for these nations to put their only real export (oil) on the market, leaving inexpensive American-produced oil as a viable alternative. One reason why the United States exports 10 times as much oil today as we did five years ago is that so many other nations who export oil have to face sanctions, tariffs, and boycotts imposed by the soft power of our nation and our allies.
The same is true for a number of products and commodities, especially foodstuffs: we make money selling food in no small part because we’ve decided not to take Mexico’s health authority at their word. This may be derided as unfair by the same people who get triggered by each Trump tweet, but you can be certain that Meryl Streep will never buy Mexican made baby formula for her grandchildren.
Of course, the prospect of a trade war seems to ruffle additional feathers due to the intended target: China. That China is our nation’s number one trading partner seems to be some kind of written-in-stone barrier to launching a trade war. History suggests that trading partners do not always good bedfellows make: Germany’s largest trade partner in 1939 was France.
Nor will China remain the inviolable front runner: just ten years ago, Canada was our largest trade partner — and in case you’ve forgotten, Canada doesn’t execute thousands of political prisoners each year.
While it’s worth asking what the United States risks in a trade war with our largest trading partner, perhaps it’s more appropriate to ask what we risk by leaving well enough alone.
Why, exactly, ought we so fervently seek to avoid a trade war with China? The usual answer is the supply chains that our businesses rely upon, most notably Apple’s numerous factories that pump out iPhones. Yet that’s no longer the sine qua non of trade war hysteria.
In fact, China’s growth of a middle class has resulted in the same squeeze that they’ve been putting on the United States for the past two decades: it’s now cheaper to manufacture in Vietnam or Bangladesh, where a factory worker earns half or a quarter (respectively) of your average Chinese worker. Rest assured, it will be a long, long time before you ever hear a peep about the risks of a trade war with Vietnam or Bangladesh.
Yet the largest issue isn’t the overblown damage of a trade war, but rather the manipulation of the Trump administration’s central message of protecting American blue-collar workers. In the ivory towers of this nation, keeping workers working is an inferior option to its alternative — tossing them out on their seats — due to rural America’s great sins of owning guns and listening to country instead of NPR.
Ignore, for a moment, the question of whether the American government should protect American workers. Ask instead why Donald Trump, who has spent four decades making business deals and developing unique solutions to problems, has to be shoehorned into a choice of either “protect American jobs” or “launch a trade war.”
The answer is he doesn’t, yet those who say trade isn’t a zero-sum game can’t seem to understand that the same goes for trade policy. Trump’s own staff have repeatedly said that the tariffs represent a negotiating tactic, and that the threat of a 45% tariff only corresponds to the IMF’s claims that China has devalued the yuan by an estimated 45%.
Trump has stated that he will pressure China to standardize its currency, something that Obama never showed enough spine to do — at the cost of millions of American jobs. If Clausewitz was correct that war is politics by other means, then a trade war is long-overdue politics by other means.
Regards,
Ethan Warrick
Editor
Wealth Authority
