Published 1:05 PM EDT Aug 8, 2019
On Monday, the stock market suffered its biggest loss in a year after trade tensions intensified between the United States and China. Last week, President Donald Trump called for more tariffs on Chinese goods; in response, China weakened the value of its currency compared with the U.S. dollar.
Trump’s tariffs are for losers
By John Hickenlooper
President Donald Trump’s impulsive and misguided trade policy, anchored in destructive tariffs, is jeopardizing our nation’s economic stability and imposing billions of dollars of additional costs on American families. Trump persists in continuing down this dangerous road, fueled by ego and recklessness at the expense of sound economics and common sense. This is yet another example in which the president causes a crisis situation and then, oddly, congratulates himself for presiding over the mess he created.
Trump’s tariffs are already costing the average U.S. household more than $800 a year, and he has threatened even more tariffs that could cost the average U.S. household as much as $2,300.
Trump’s own Department of Agriculture estimates that the ongoing tariff war will have an $11 billion negative impact on U.S. agriculture. U.S. farmers in the Midwest are filing for Chapter 12 bankruptcy protection at the highest levels in a decade. Researchers at Iowa State University estimate that Iowa’s overall losses in the agricultural industry will exceed $1 billion in 2018 alone from trade disruptions linked to tariffs.
In addition, the United States lost out on an estimated $131 billion increase in annual real incomes due to failure to secure a trade deal with Pacific trading partners.
One of Trump’s most harmful and shortsighted actions has been to walk away from trade agreements that held the promise of growing our economy, creating good jobs, and deepening security ties with friends and allies around the world. Rather than cooperatively working with foreign friends and allies to improve the terms of trade, he has unilaterally attacked the global trading system, with dire consequences for our country.
Today, unfortunately, politicians in both parties are pushing to restrict America’s trading opportunities. Trump launched tariff wars. Protectionists on the left seek to block new trade agreements.
Trump’s negotiations with China: Hardball tactics just might work
This belligerence toward trade is self-destructive. At a time when 95% of the world’s consumers live outside our borders, we cannot have economic growth or economic justice without expanding trade. We need open and fair trade, so our people can benefit from trade rather than hide from it.
As president, I will launch a new set of policies to ensure open and fair trade for America.
I will require new trade agreements to enforce labor and safety rules, with bilateral enforcement mechanisms where complaints can be addressed in a timely manner; environmental standards and climate change goals; protection of U.S. intellectual property rights; and equitable access for our investors.
We have to ensure that trade is fair to our workers, our entrepreneurs and our environment. But we can’t do that with walls and tariffs. We need to do it with negotiations that open up the world to our products and services. You can’t grow our economy without growing trade. Anyone who isn’t speaking out for open and fair trade isn’t speaking out for America’s workers.
Today’s talker on economy: President Trump’s post-NAFTA economic vision is working. Keep it up.
To the extent the global trade regime has fallen short, we need to engage consistently with our allies and trading partners to modify our trade and tariff arrangements and strengthen our efforts to pull China in line with the transparent, market-based principles on which growth of the international economy depends.
Plainly stated, tariffs are for losers.
John Hickenlooper, former governor of Colorado, is seeking the Democratic Party’s nomination for president. This column originally appeared in the Des Moines Register.
What others are saying
Andy Puzder, Fox News: “The president is dealing with China as an experienced businessman and negotiator, not as a typical politician. He is determined to achieve a substantive economic result, not a domestic political advantage. At some point, China’s leaders will have to realize that as long as they continue to break their promises, President Trump will continue to keep his.”
Daniel Kliman, USA TODAY: “The benefits of rising to the China challenge are vast — the pitfalls real, but manageable. Washington should counter Beijing’s influence where it matters most, rather than competing everywhere, and becoming overextended. We should strike the right balance between reducing America’s economic vulnerability to China and engaging in unneeded protectionism. Domestically, Washington must address espionage by Beijing without impugning the loyalty of Americans of Chinese descent. The United States should not fear a new Cold War with China. Done right, strategic competition with Beijing is Washington’s to win — and could reshape the United States and its role in the world for the better.”
Michael Ivanovitch, CNBC: “There’s no way that China can give Trump the trade deal he wants. The stage, therefore, is set for escalating tariffs as the only instrument for addressing China’s systematic and excessive surpluses on its U.S. trades. As a candidate for reelection, Trump cannot tolerate a continuation of decades-old massive transfers of America’s wealth and technology to China. U.S. difficulties with China will send a message to the European Union and Japan that their excessive trade surpluses with America must be cut — fast and radically.”
The New York Times, editorial board: “The Chinese already are establishing new patterns of trade — buying soybeans from Brazil, opening export factories in Southeast Asia, investing in European infrastructure. Trump has shown that he has the power to disrupt the relationship between the United States and China, but he has shown no ability to dictate new terms. The most likely outcome appears to be at least another 18 months of pain.”
What our readers are saying
Trump started this fight, and now he doesn’t like what is happening. I guess he found out he is playing in the big leagues.
— Dave Small
What’s an alternative method to the higher tariffs that Trump is using to effectively deal with unfair trade practices by China and others that rob good jobs and businesses from the United States? The trade war is temporary, and it is effective.
— Sal Maggiore
Soon, if America will tell companies they have to choose between doing business here or in China, they will choose China.
— Dave Cawdell
Though the Dow Jones Industrial Average fell by 767 points Monday, anyone who is really concerned about short-term volatility should not be in the market.
— Bob Tressel