Since Trump announced a new set of protectionist measures on March 1, different corners of the world have gradually been drawn into the economic cyclone. Despite negative feedback from US allies, Trump’s actions have been consistent, culminating in the imposition of new tariffs on China Thursday the 22nd.
Since then, Trump has specifically designated China as the target of a trade war. Immediately, they retaliated by announcing tariffs on 128 American goods, including steel and pork. Steel itself has been a subject of particular interest throughout the month, as steel and aluminum were the first imports Trump announced he would tax. As of now, only Mexico, Canada, the EU, South Korea, Australia, Brazil, and Argentina are exempted from steel and aluminum tariffs.
Moreover, Thursday’s announcement came alongside a decision by Trump to seek action against China in the World Trade Organization. His use of international institutions in this case is surprising, as the European Union has been a major advocate against his protectionism— it has threatened to tax hundreds of US items if American tariffs are upheld.
Christopher Pissarides, a Nobel Prize winner and professor at the London School of Economics, sees the waging of a trade war as “likely entirely engineered as an appeal to his base” (Choudhury, CNBC). For Pissarides, Trump is attempting to make good on his campaign promise to revive the US manufacturing industry by eliminating foreign competition.
However, Pissarides also notes the problems inherent to Trump’s initial campaign promise. Rather than regressing to a previous economic era, he thinks that the US should be “pushing along the technological frontier” (Choudhury, CNBC).
Though critics are vocal, supporters of the Trump administration are confident in the ability of the United States to perform in a match-up with the Chinese economy. Some, like Alan Tonelson of The National Interest, explain that “China has much more to lose economically than the United States from an upward spiraling of trade barriers” (National Interest Online, 2018).
Ultimately, Trump’s new trade war can be seen as another manifestation of his ‘America-first’ foreign policy. Though the impact that will be felt by the American economy is to be seen, it is clear that the issue of American protectionism is not limited to Chinese borders.