No, Trump Is Not Winning Any Trade Wars
There is exactly one bit of advice that I give young people regarding how to choose a writing topic: If you read or hear something and find yourself spontaneously shouting "What?!" then you almost certainly have found a good subject for your next piece. That is especially true for longer-form projects like law review articles and books, because it takes quite a lot of energy to stick with a project for months or even years and see it through to the end. Bringing a boatload of passion to a new project is essential, because there will be times when your energy will flag. But even with shorter pieces, one can hardly go wrong by writing a response to something that makes one's blood boil. (I am hardly the first person to have offered this advice, of course, although I express it more colorfully than most of my like-minded colleagues do.)
This morning, as I was sorting through possible ideas for this column, I came across this headline in The New York Times: "Trump Is Winning His Trade War. What Will That Mean for the Economy?" What? What?! WHAT??!! And so today's column was spawned. Before getting to the substance of what is so idiotic about The Times's framing, I should add that I soon found this in Paul Krugman's Substack post today: "[The newly announced] US-EU trade deal ... was a bad thing, but mainly for political reasons." The first reason: "Trump probably believes he won, which will just encourage him to persist with his trade war" (emphasis mine).
So, as has become its norm, The Times has decided to frame things in the most Trump-stroking way possible, calling him a winner. Two weeks ago, I devoted two Dorf on Law columns (here and here) in substantial part to responding to the claim (again advanced in a Times headline) that Trump has been "tall[ying] his wins." Those two uses of the concept of winning are both wrong, but for very different reasons. Here, after briefly summarizing my response to the earlier erroneous framing, I will explain that Trump has not at all won a trade war, and he never will. But as Krugman suggested, simply saying that Trump has won will have very bad results.
On the "Trump tallies his wins" headline earlier this month, the problem is that the supposed victories in question -- passage of the horrendous budget bill being the big one at the time -- could only be called wins in the same sense that a criminal gang's taking of turf from defenseless citizens could be called a win. That is, there was no fair contest in which one side prevailed through superior skill or strategy, but a stronger party simply got its way through the cold-blooded use of raw threats and violence. And although it would seem unthinkable for a major news source to write admiringly of, say, Al Capone's "tallies of wins," we have the country's top newspaper saying, in essence, "Wow, look at how successful Trump is at threatening people to get his way! What a winner."
How is The Times's use of the concept of "winning" in today's headline different? At least in the earlier example, Trump was indeed getting what he wanted, which to him surely feels like a victory. He wanted to give the ultra-rich enormous tax breaks and to throw as many non-rich people as possible off Medicaid and food assistance. That is what his bill did, and it passed after Trump and his rabid (and demonstrably violent) base threatened wavering voters in Congress. He wanted to dismantle the federal government without being slowed down by pesky federal judges' injunctions, and the Supreme Court proved that it is completely in the bag for him by letting him do so. Gee, he's winning! Sure thing.
Similarly, one could insist on describing what Trump and the Republicans are doing to universities, trans people, some law firms, protesters, and people who are or might kinda look like immigrants as wins, I suppose. The "war on woke" is fully joined, and like many of the wars that the US has started over the years, it is being waged with overwhelming, unthinking force against defenseless targets. The Trumpists wanted to extract crippling concessions from Columbia and Harvard, and they succeeded in the former case while being well on the way to getting their way in the latter -- and if Harvard is not fully neutralized now, the Republicans will not hesitate to launch more attacks until the university sector in the US is fully brought to heel.
So the problem with all of these examples is not that the people who are happy about getting their way are not in fact getting their way. The problem instead is that we should never describe the results of brute force and raw intimidation as some kind of reward for doing something right. Republicans "won" elections and Supreme Court seats by flouting the rule of law, and now they are able to ram through whatever they want. Again, however, they are admittedly getting what they want.
But as I wrote above, trade wars are different, notably because they are wars and not battles. Trump is abusing all of the powers of the US's hegemonic position in the world in the service of his perverse vision of international trade as a zero-sum game, but those are not wins at all but merely tactical moves. Notably, the political scientist Henry Farrell (on another recent Krugman Substack post) also analogized the Trump/Republican global strategy to a mob boss's tactics, referring specifically to the "bust outs" depicted in "The Sopranos" and other pop-culture depictions of murderous criminal organizations. Farrell explains that Trump is abusing the US's power to plunder the world for short-term personal (financial and political) gain, all at the expense of long-term prosperity.
Trump claims to have negotiated trade deals with Japan, the EU, and others, but all he has done is to say, "I'm gonna do this, and you can't stop me." Thus far, other world leaders are choosing not to enrage him by retaliating. I think even that is a mistake on their part, because essentially they are like the shop owners who choose not to organize and fight back in the hope that Tony Soprano's gang will be satisfied with a mere protection racket rather than a full takeover. But seriously, what will any of these countries do when (not if) Trump decides that he is going to do something new to harm them?
I suggested above that what Trump has been doing so far is simply a flex, preening around while showing that he can hurt people and get them to smile and ask him to please not make it worse. But what is he getting out of that, other than ego gratification? Where, in other words, is the win? As Krugman pointed out this morning, the conditions that the US unilaterally imposed on the EU mirrored the conditions that he imposed on Japan, with an especially perverse implication:
And like the Japan deal, this deal seems to place lower tariffs on cars made in Europe, which have very little U.S. content, than on cars made in Canada, which contain many American parts. Add in the punishing tariffs on steel and aluminum, and Trump’s trade policy seems, if anything, to be tilting the playing field against U.S. manufacturing.
Therefore, even if we were willing to describe the non-deals (which do not bind the US to anything) with Japan and the EU as battle strategies, they are losses even on the terms that Trump prefers. That is, he has now succeeded in harming the US economy, not helping it. But what if he were actually able to stop shooting at his own side and get something that would look like a successful outcome in a trade battle? Would enough of those count as winning the war?
Of course not. Trump cannot win trade wars because no one wins a trade war. The early-1980's movie "WarGames" concluded with the famous lesson that in the "game" of global thermonuclear war, "[t]he only winning move is not to play." And that is true of trade wars as well. If one side goes to war, there will be damage no matter what the other side does. If there are rounds of retaliation, the damage will only get worse.
But could the result somehow be called a win for Trump? After all, his core motivation seems to be his wrong but unshakable belief that the rest of the world is "ripping us off," with his evidence being that the US runs trade deficits against most countries. He overstates those deficits, and in some cases mischaracterizes surpluses as deficits, by focusing only on trade in goods while ignoring trade in services, but why should that surprise us? The larger point is that, by the terms that Trump has described his trade wars, winning means turning trade deficits into trade surpluses.
Trump's emerging tariff regime is starting to look a lot like the infamous Smoot-Hawley tariffs from the 1930's. What happened to the US trade deficit after those tariffs were imposed? Wikipedia's Smoot-Hawley entry summarizes the official data:
U.S. imports decreased 66% from $4.4 billion (1929) to $1.5 billion (1933), and exports decreased 61% from $5.4 billion to $2.1 billion. US gross national product fell from $103.1 billion in 1929 to $75.8 billion in 1931 and bottomed out at $55.6 billion in 1933.[21] Imports from Europe decreased from a 1929 high of $1.3 billion, to $390 million in 1932. U.S. exports to Europe decreased from $2.3 billion in 1929 to $784 million in 1932. Overall, world trade decreased by some 66% between 1929 and 1934.So the US was in fact running a trade surplus at the time, and it declined from $1.0 billion to $0.6 billion. Beyond that, I wrote above that "by the terms that Trump has described his trade wars, winning means turning trade deficits into trade surpluses," which is true but incomplete. The war is supposed to reverse the US's trade deficits and make the country more prosperous. The result of Trump's trade policies, however, will be to increase consumer prices, bring in only minimal tariff revenue, and discourage other countries from buying US exports. The economy will be less prosperous as a result.
To summarize, although I do insist that it is a very bad idea to use the word winning to describe "merciless bullying that gets results," I concede that Trump and the Republicans can indeed get the results that they want when it comes to harming the people they hate, from minorities and women to scientists and independent experts. They can dismantle the Constitution and be pleased with the results, high-fiving each other as they survey how miserable they have made all of the people that they hate. It is ugly, but they and Trump will undoubtedly think of it as winning.
All of that is true, however, only because they will define success as the damage itself. More trans kids will be driven to suicide. Win! More protesters will be wrongly imprisoned. Win! More non-criminal non-White non-Christians will be sent to concentration camps. Win! With trade wars, however, there is no win unless the policies make America a net exporter with a fully employed work force (made up entirely of compliant native-born laborers, of course).
Getting the EU and Japan not to retaliate against Trump's damaging policies is nothing like any of that, however, because the goal is not the damage to everyone else but the bright new day of US economic prosperity that Trump endlessly promises. And a trade war will move the country away from that result, not toward it.
Even so, I suspect that The New York Times will someday soon be declaring that we can ignore the declining prosperity of the country and the lack of success in turning around the trade balance, instead running headlines about how Trump is "winning" the next gratuitously damaging battle that he chooses to fight. We can't have fake news, after all.
- Neil H. Buchanan