Trump, advisers remain blithely ignorant on trade

In one way, Donald Trump’s attack on our foreign trade partners resembles his attack on immigrants: in each case, the attack is framed as a response to evildoing that exists only in his imagination. No, there isn’t a wave of violent crime by immigrants, and MS-13 isn’t taking over American towns; no, the European Union doesn’t have “horrific” tariffs on U.S. products (the average tariff is only 3 percent).

In another way, however, the trade crisis is quite different from the humanitarian crisis at the border. Children ripped from their parents and put in cages can’t retaliate. Furious foreign governments, many of them U.S. allies that feel betrayed, can and will.

But all indications are that Trump and his advisers still don’t get it. They remain blithely ignorant about what they’re getting into.

Back in March, as the U.S. was imposing tariffs on steel and aluminum imports, Peter Navarro, the White House trade czar, was asked about possible retaliation. “I don’t believe any country will retaliate,” he declared, basing his claim on the supposed upper hand America has because we import more than we export.

On Sunday, Canada announced retaliatory tariffs against $12.6 billion of U.S. products.

The European Union and China have also announced retaliatory tariffs. Mexico, with its new leftist president-elect, is hardly likely to be accommodating.

The rules of world trade, established under U.S. leadership in the 1940s and enforced by the World Trade Organization, do allow some flexibility. For example, countries are allowed to impose temporary tariffs in the face of import surges, like the tariff Barack Obama imposed on Chinese tires back in 2009.

But both the scale and the motivation behind the Trump tariffs — their obviously fraudulent national security rationale — are something new. They amount to rejecting the rules of the game we created; the EU, in its warning, bluntly calls U.S. actions “disregard for international law.”

The U.S. is now behaving in ways that could all too easily lead to a breakdown of the whole trading system and a drastic, disruptive reduction in world trade.

Yet Trump appears to believe the whole world will bow down to U.S. economic power and his deal-making prowess.

So we’re heading into a trade war, and it’s hard to see how the escalation ends. After all, foreign governments literally can’t give Trump what he wants, because he wants them to stop doing things they aren’t actually doing.

How will all of this affect the U.S. economy? Exporters will be hurt, of course — and exports support around 10 million jobs. Some industries that compete with imports might end up adding jobs. But they wouldn’t be the same jobs, in the same places: A trade war would cause huge worker displacement.

And what’s especially striking right now is that even industries Trump claims he wants to help are protesting his policies, urging him to reverse course. General Motors warns that proposed auto tariffs could lead to “less investment, fewer jobs and lower wages.”

But there are no grownups in this administration, which basically makes policy by temper tantrum. A full-blown trade war looks all too possible; in fact, it may already have begun.