Trump tariff wars hurt farmers, workers, and the GOP
The ultimate nightmare scenario for President Trump and Republicans running in 2020 is an election-year recession that could bring a national political realignment and sweep into power a Democratic president, Democratic Senate, Democratic House, and Democratic governors.
Trump’s aggressive tariff wars increase the dangers of this election-year recession. They raise costs of everyday goods for American consumers, create the equivalent of a multibillion-dollar tax increase against American workers, impose pain and hardship against American farmers, create instability and danger throughout worldwide financial markets and pose an extreme political danger to Republicans.
There is no doubt that China’s policies and practices violate critical international trade rules, the kind of rules under the kind of agreements that Trump holds in contempt. Trump does not embody “the art of the deal.” He has not successfully negotiated bipartisan deals with Congress and treats it with contempt. He has not successfully negotiated any important international deals. The exact opposite is true.
Trump is devoting his presidency to trying to destroy one international agreement after another, from the Trans-Pacific Partnership, which the U.S. should have worked to improve but should never have withdrawn from, to the Paris agreements to combat climate change, which Trump disastrously works to destroy.
Trump should have worked with our democratic European allies instead of attacking the European Union, undermining the NATO alliance, criticizing internationally respected European leaders and initiating a tariff war against Europe as he now escalates his tariff war against China.
A skilled and savvy American president, acting like a true leader of the free world, would have united with our European allies to create a united front against unfair Chinese trade practices. Instead, Trump wages simultaneous trade and tariff wars against Europe and China despite strong warnings from leading conservative and liberal economists that these tariff wars create an extreme danger to economic growth, destabilize stock and bond markets and cause substantial hardships against consumers, workers and farmers.
The danger to Republican candidates from these tariff wars is enormous. Many big losers from the Trump tariff wars previously supported Trump or Republicans, such as farmers, small business and communities across rural America. Other big losers are working-class voters and middle-class and poor voters. They are learning that the Trump tariff wars have the same effect on them as a significant tax increase they are forced to pay, raising prices for goods they buy every day, and eviscerating the little benefit most middle-class Americans received from the Trump tax cuts.
It was never true, as Trump claims, that tariffs will pressure companies to move jobs back to America to avoid the tariffs. They will raise prices for American consumers to pay for the tariffs, or move jobs to other low-wage nations with wages even lower than China’s, while foreign investment in job-creating American-based plants could be reduced with escalating trade wars.
It was never true, as Trump falsely claims, that his tariffs bring money home from China to America. In fact, they take money away from American consumers, American farmers, American business and American workers. This fact creates a huge opportunity for Democrats and a huge danger for Republicans.
Today the global economy is slowing. Many leading economists, business leaders, and investors believe a continuing election-year slowdown and recession is very possible by November 2020. The Trump tariff wars make this possible recession, which would be a political death knell for Trump and Republicans in the elections, even more likely.
What Trump should do about China, and what Democrats should advocate, is improve relations with democratic European allies. Stop undermining the European Union. Stop dividing NATO. Stop waging tariff wars. Work with democratic allies in Europe, Asia and around the world to present a united and powerful front to meet the challenge from China without policies that could crash financial markets, create the next deep recession or trigger the next global financial crisis.
Brent Budowsky was an aide to former Sen. Lloyd Bentsen (D-Texas) and former Rep. Bill Alexander (D-Ark.), who was chief deputy majority whip of the House of Representatives. He holds an LLM in international financial law from the London School of Economics.
Note: originally published at thehill.com; re-published with permission.