Trade Wars are Neither Good Nor Easy to Win

PETER SUDERMAN at Reason.com, “Trump Campaigned on Saving Factory Jobs, but U.S. Manufacturing Just Went Through a Year-Long Recession”:

Manufacturers have a clear culprit in mind for the sector’s poor performance. As The Washington Post notes in a report on the Federal Reserve data, the uncertainty and increased costs surrounding Trump’s trade war, which was billed as a way of supporting American factory jobs, has instead wreaked havoc on an export-heavy sector that relies on the global flow of goods to operate. Trump’s interventions were intended to prop up U.S. manufacturing. But they backfired, harming the people he claimed to help—who also happen to be some of the people who played a crucial part in his election.

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There is an obvious lesson here, which is that, despite Trump’s repeated insistence to the contrary, trade wars are neither good nor easy to win; they raise costs on American consumers and businesses; they add complexity and uncertainty, disrupting supply lines and business plans even when threatened tariffs don’t go into effect. They have, in other words, exactly the predictable negative effects that economists have known of and warned about for years.

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