This past weekend brought news of a possible truce in President Donald Trump’s trade war with China. At least there will be a pause before a new round of tit-for-tat tariffs.
Some think the president’s style of chest-thumping ultimatums will ultimately bring economically useful concessions from our trade rivals — most of all China.
Early on in his administration, Trump critics feared inexperienced leadership might drive U.S. industries off a cliff. So far, our economy has proven resilient. Stock markets, however, are flashing warning signs. After briefly signaling enthusiasm about the truce, markets tanked on Tuesday, as traders starting asking President Ronald Reagan’s classic rhetorical question: “Where’s the beef?” They see that tariffs have been almost all pain and no gain.
While General Motors begins shuttering auto plants partly due to steel and aluminum prices driven by Trump tariffs, local news stories about products from timber to crab show we may pay a stiff price for international grandstanding.
Coast River Business Journal has devoted significant coverage of tariff impacts on the seafood industry, while The Daily Astorian recently described how logs produced here will suffer if the tariff truce doesn’t hold. Astoria Forest Products leaders, workers and suppliers were holding their collective breath to see if Trump and China’s President Xi would bury the hatchet. The answer was “maybe.” As it stands, hiking tariffs to 25 percent each way between the two nations will be delayed 90 days. Ten percent tariffs already in place are unaffected by the Trump-Xi talks.
It also remains unclear whether seafood tariffs will be lowered in time to preserve the lucrative Chinese market for Columbia River processors who sell fresh Pacific Northwest crab for Chinese New Year celebrations. A growing Chinese taste for chum salmon also may wiggle off the line.
Beyond short-term skirmishes and their consequences for local products, rising trade tensions in the past two years are a reminder that it takes a long time for industries and nations to build business relationships, shipping networks and trust. For now, we can only hope that tariff spats quickly simmer down without doing permanent damage. Will Chinese companies immediately resume buying Northwest timber? Will Chinese consumers hold onto a grudge and quit eating our crab? Only time will tell.
The trade war taps into a vein of discontent among working Americans over stagnant wages and factories moving out of the country. We have legitimate gripes with the Chinese, some of whom are bullies when it comes to trade secrets and intellectual property.
However, imposing what amounts to a high tax on American businesses is not the way to rectify this situation. Tariffs were a key cause of the Great Depression in the 1930s. Instead of giving the U.S. trading advantages, those tariffs made everyone in the world poorer and contributed to starting World War II.
Responsible Republicans in the U.S. Senate must cooperate with Democrats in the U.S. House and wrest tariff power away from the White House. No president of either party should have the power to wreck decades of carefully wrought trade policies.