It’s always 1987 in Trump’s world
A big new economic plan on the way:
Former president Donald Trump is weighing options for a major new economic attack on China if reelected, considering plans that are widely viewed as likely to spark a global trade war.
Publicly, the GOP front-runner has endorsed downgrading China’s trade status with the United States — a move that would lead tariffs between the world’s two largest economies to skyrocket. Revoking China’s status as a “most favored nation” for trade — which is applied to almost all countries the United States trades with — could lead to federal tariffs on Chinese imports of more than 40 percent, according to one analysis. Trump has floated imposing a 10 percent tariff on nearly all $3 trillion in annual imports from all countries, including China.
Privately, Trump has discussed with advisers the possibility of imposing a flat 60 percent tariff on all Chinese imports, according to three people familiar with the matter who spoke on the condition of anonymity to relay private conversations.
All these options would lead to enormous disruptions to the U.S. and global economies that would far surpass the impact of the trade wars of Trump’s first term, economists of both parties say. Although he often praised Xi Jinping as president and signed a 2020 trade deal with China, Trump now repeatedly bashes Beijing on the campaign trail and has promised a tougher stance than President Biden.
Trump’s determination to ratchet up trade fights with Beijing reflects the emerging economic stakes of the 2024 election, as the former president appears increasingly sure of winning the GOP nomination. Trump has floated some fanciful new ideas for his second term — like building “Freedom Cities” in different parts of the United States with flying cars — but has primarily focused on intensifying policies he pursued during his first term, such as a severe immigration crackdown, cuts to corporate taxes and disruptive new tariffs on U.S. trading partners.
“The 2018 to 2019 trade war was immensely damaging, and this would go so far beyond that it’s hard to even compare to that,” said Erica York, senior economist at the Tax Foundation, a right-leaning think tank that opposes the tariffs. “This threatens to upend and fragment global trade to an extent we haven’t seen in centuries.”
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In the White House and on the campaign trail, Trump has argued that tariffs on imports bolster domestic industry while raising money for the federal government, ignoring — or dismissing — economists of both parties who say they raise costs for U.S. consumers and producers. Trump repeatedly boasts of bringing in billions of dollars to U.S. coffers through the tariffs of his first term, though he added roughly $8 trillion to the national debt during his first term through higher spending and tax cuts. He also approved roughly $30 billion in a bailout to compensate farmers who had been hurt by retaliatory tariffs imposed by China.
Despite tariffs’ destabilizing impact on the global and U.S. economies, Trump has promised to dramatically expand their use in a second term. He has floated enacting a “universal baseline tariff” on virtually all imports, or roughly $3 trillion worth of goods, which would amount to more than a ninefold increase in the amount of goods subject to tariffs compared with his first term. He has also talked about pushing legislation to have the United States automatically impose “reciprocal” tariffs matching those of all countries on U.S. exports, which would almost certainly lead to a sharp rise of trade hostilities.
But Trump’s plans for China may be the most dramatic — and disruptive. Both publicly and privately, Trump has talked about his China tariffs as a key accomplishment of his first term — despite the opposition of many Republican officeholders — and vowed to double down on that approach if elected again.
China was the third-largest U.S. trading partner as of November, behind only Mexico and Canada, accounting for 11.7 percent of total U.S. foreign trade.
Manufacturing has exploded under Biden and he’s put in place policies to require semi-conductors to be manufactured in the US. Trump did none of that but sure, he’s a very stable economic genius.
Trump saw Japanese cars being offloaded at the Long beach port back in the 1980s and had the brilliant insight that we needed to stop them from doing that. There’s nothing more to it than that.
