Opinion

Trump is still clueless about the costs of his trade war

The president's tariffs are devastating Wisconsin dairy farmers, among others

President Trump's trade war has been underway for some time, and by his account we should be winning it any day now.

"When a country (USA) is losing many billions of dollars on trade with virtually every country it does business with, trade wars are good, and easy to win," he tweeted in March of 2018. "Example, when we are down $100 billion with a certain country and they get cute, don't trade anymore-we win big."

"It's easy!" Trump concluded. Except for all the ways it's not — ways that are becoming increasingly evident as the promised victory persistently fails to materialize more than a year past the imposition of this administration's signature steel and aluminum tariffs. Trump's trade war is only getting worse, and his bizarre economic ignorance is doing real damage to the American economy he claims to protect.

The trade war has a sort of funhouse logic once you realize Trump does not understand how trade works. Schooled, no doubt, by his own decades of swindling, he is certain that whoever makes the sale gets the win. There is no space in his framework for mutual benefit, for the possibility that an exchange of cash for goods might end with both parties feeling better off than they were before. The only game Trump knows is zero-sum, and the sum is always monetary. This is how he can rave, without a whit of recognition of his own absurdity, that "if we didn't trade, we'd save a hell of a lot of money."

The president likewise fails to grasp how tariffs work. He does not seem to realize that import taxes are only partially a punishment for the nations and producers they target, and that insofar as American buyers are undeterred — whether by taste or necessity — from purchasing tariffed goods, it is we who foot the higher bill. Nor does Trump apparently fathom how the retaliation his tariffs engender can cost Americans at least as much as the foreign populations he hopes to make suffer.

But they can, which is why a National Association for Business Economics survey reported Monday found three in four business economists in the goods producing sector (think agriculture, manufacturing, and the like) say Trump's trade war has had negative effects on their businesses. Though the outlook was not quite so grim in other sectors, a mere 1 percent said the impact of Trump's tariff escalation was positive.

Farmers have been particularly hard hit, as a recent New York Times profile of Wisconsin's dairy industry explained in fresh detail. Since Trump took office, the report notes, almost 1,200 Wisconsin dairy farms have ceased to be dairy farms. Some have declared bankruptcy; others have shifted to other pursuits, like beef or crop production, in an effort to stave it off. "Trump's trade approach has pushed many of Wisconsin's struggling dairy farmers to the edge," the Times writes, as his "sweeping tariffs on foreign steel and aluminum ... have set off retaliatory tariffs from Mexico, Canada, Europe, and China on U.S. dairy products."

The Trump administration ministered to its trade war's agricultural casualties last summer with a $12 billion farm bailout, a package promptly condemned by the American Farm Bureau Federation as an inevitably inadequate substitute for restoration of normal trade relations. The bailout's overwhelming insufficiency is even more obvious now: One Wisconsin farm family in the Times article received a whopping $400 from the program, nowhere near enough to allow them to keep milking cows. The family is now in the process of leaving the dairy industry to raise beef cattle in hopes of saving their farm.

Yet when he spoke in Wisconsin on Saturday, Trump was either unaware of or unwilling to acknowledge the effects his anti-market policies have had on the farmers he professes to champion. "I came up here a year ago, and I was with farmers," Trump said, spinning a tale in which he figured as the patron saint of Wisconsin agriculture for his negotiation of the United States-Mexico-Canada Agreement (USMCA), a relatively modest NAFTA reform deal which Congress has yet to approve.

Yes, USMCA will make it somewhat easier for American dairy farmers to sell their products in Canada. But it's not clear how much that will really change for the U.S. dairy industry, and it certainly won't help farmers who have already been pushed out of the dairy industry by economic conditions created significantly by Trump's own trade war.

Trump in Wisconsin praised his tariffs scheme and pushed for Congress to approve his trade deal — an outcome congressional Republicans, in a rare burst of intraparty dissent, have indicated will only happen if the tariffs are lifted. He bemoaned the state's "scars, empty buildings" caused by bad trade policies past and mourned the loss of family farms to onerous federal economic policies, all without a drop of irony. He demonstrated yet again his motivating ignorance on trade, stubbornly oblivious to the destruction it can unleash.

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