Trump shrugs off warnings over trade war costs

What happened

China vowed this week it would "never kneel down" to America in President Donald Trump's tariff war, as shipments of goods from China to the U.S. plummeted and economists and retailers warned of impending price hikes and empty store shelves. With most Chinese imports facing a 145 percent levy, "essentially all shipments out of China for major retailers and manufacturers have ceased," said Port of Los Angeles executive director Eugene Seroka. The chief economist of asset management giant Apollo, Torsten Slok, said he expects "empty shelves in U.S. stores in a few weeks" and "Covid-like shortages for consumers." That slowdown, Slok said, would result in "significant" layoffs in retail, trucking, and other sectors. Trump signaled his readiness to negotiate "substantial" tariff cuts and claimed Chinese President Xi Jinping had called him. But officials in Beijing denied negotiations were taking place and struck a defiant tone. "Bowing to a bully is like drinking poison to quench thirst," China's Foreign Ministry declared in a social media video.

A report that Amazon would display the cost of Trump's tariffs alongside the price of products prompted fierce blowback from the White House; Trump press secretary Karoline Leavitt called it a "hostile and political act." The company quickly disavowed any such plan, saying it was under consideration only for its low-cost Haul store and "was never approved." Trump said he'd called Amazon founder Jeff Bezos and "solved the problem very quickly," praising him as a "good guy" who "did the right thing."

Trump signed an executive order easing a 25 percent tariff on imported parts used by U.S. automakers. Foreign-made autos will remain subject to a 25 percent tax. Trump called it a "short term" allowance for automakers, who say the import duties will spike prices, cut sales, and lead to layoffs. But at a rally in Michigan, Trump vowed to stay the course on tariffs, and ultimately "slaughter" carmakers who don't shift production to the U.S. In an ABC News interview, he rejected the idea that American consumers would see any price rises. "China probably will eat those tariffs," he said. "Everything's going to be just fine."

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What the editorials said

"Economic mayhem is setting in" thanks to Trump's "crackpot tariff ideas," said the Houston Chronicle. The stock market has recorded its worst first 100 days of any presidential term since Gerald Ford took office in 1974, with the S&P 500 down 7.9 percent. Corporations are starting to furlough workers and pause expansion plans. And because tariff costs are ultimately passed along to consumers—not foreign firms as Trump likes to claim—a typical American family can expect its expenses to climb by $2,700 a year. "It won't be the president's billionaire buddies bearing the costs for them." Amazon should have stuck with its "brilliant tariff idea," saidThe Wall Street Journal. Tariffs are taxes, and online shoppers already get to see how they much they have to cough up in state taxes when they check out. Americans would benefit greatly from clarity about exactly what Trump's tariffs will cost them, but "instead of owning its policy," the White House "bullied Amazon to keep quiet." What is Trump afraid of?

What the columnists said

Small businesses across the U.S. are reeling, said Daisuke Wakabayashi in The New York Times. Hundreds of owners tell the Times they've "been stunned into paralysis" by the tariffs and the uncertainty of what's coming next. Tim Fulton, who runs a business in Alaska making conveyor belts for airline cargo, had to raise prices due to new tariffs on essential components that are only made overseas, like motorized rollers from Japan. A pipeline of interested customers then "disappeared overnight," and potential investors retreated. Instead of growing his business, Fulton is now consulting a bankruptcy lawyer.

Consumers haven't yet felt the sting, but they will soon, said Dominic Pino in The Washington Post. There's a lag, because ships from China take a month to cross the Pacific Ocean and because retailers loaded up on inventory before the tariffs hit. But "boatloads of pain" will land when retailers run out of product and choose to restock at much higher prices—or decide to let shelves sit empty. Trump's tariffs "might steal Christmas," said The Economist. Some 80 percent of the toys sold here come from China. Production "has ground to a halt," and unless import duties are slashed, nearly half the small-and medium-size firms surveyed by The Toy Association say they'll be out of business within months.

Trump is taking a phenomenal risk, said Adam Cancryn in Politico. He was elected on promises of lower prices and an economic "golden age." Instead, his "chaotic" tariffs are "shaking the foundations" of America's financial system and have put his approval rating underwater by double digits. True to form, Trump is blaming stock market woes on former President Joe Biden, said Mark Antonio Wright in National Review, claiming this week it's suffering a Biden "overhang." But "every American" knows Trump owns these tariffs—and any economic fallout.

"We are on the verge of an economic crisis that could leave America poorer for generations," said James Briggs in The Indianapolis Star. It doesn't feel that way now. But recall early 2020, when we knew a lethal novel virus was coming for us and blithely went about our lives. Life felt normal, "until it didn't." Right now, "the vast majority of economic indicators are screaming crisis," the dollar is down, and CEOs say we're heading for a recession. With Trump's next moves uncertain, "the future is unwritten, but the risks are coming into focus."

What next?

Trump's levies are being challenged by a raft of lawsuits, said Erik Larson in Bloomberg. Attorneys general from 12 states and legal advocacy groups representing numerous businesses have sued, arguing that Trump's claiming of emergency powers to impose the tariffs is unconstitutional. This week, the administration asked the U.S. trade court to reject one such suit, saying the plaintiffs are improperly "inviting judicial second-guessing of the president's judgment." Meanwhile, China shows no sign it's ready to back down, said Ryan Hass in Time. With no competitive elections, its leaders believe China's political system is "more unified, hardened, and disciplined than the Trump administration to withstand a trade war." And the Chinese have "tools at hand to hit America's economy where it hurts, including the withholding of critical minerals and key inputs to America's industrial value chains." In short, "Beijing believes time is on its side," so if there's going to be a retreat in the trade war, "it will need to come from Trump."