Evan Horowitz | Quick Study

There are no bullets or bombs, but trade wars have real casualties

Shipping containers are transferred at a port in Qingdao in China’s eastern Shandong province on Friday.
Shipping containers are transferred at a port in Qingdao in China’s eastern Shandong province on Friday.(AFP/Getty Images)

President Trump is not afraid to fire the first shot, even when the rest of the world is poised to fire back.

The latest proof came just after midnight Friday, in the form of $34 billion in new tariffs imposed on Chinese imports. The move was immediately met by Chinese counter-tariffs on an equal amount of US products.

The escalating fight with China comes as the administration wages separate trade battles with allies around the world, representing the most aggressive and widest-reaching protectionist effort in half a century of US trade policy.

Trump’s penchant for unilateral escalation is now well-established, whether you think of his decision to back out of the Paris climate agreement, his withdrawal from the Iran nuclear deal, or his widening demands for renegotiating the North American Free Trade Agreement.


Trouble is, this strategy has yet to produce any meaningful results. NAFTA negotiations have broken down, Iran has threatened to restart its nuclear activities, and the rest of the world is determined to fight global warming even if the United States rolls back environmental protections.

For a fleeting moment, it seemed Trump could claim plaudits for turning belligerent threats into a historic summit with North Korean leader Kim Jong Un. But even that success has been called into question by recent intelligence findings suggesting that North Korea has been secretly increasing its production of nuclear fuel.

This lack of payoff for Trump’s high-pressure foreign policy is one reason the trade war has invited such vociferous opposition. As of now, there is no clear exit strategy, much less a winning play.

At stake: the second-longest economic expansion in US history and the best job market since the late 1990s.

Every Trump move has been met with equal force and matching resolve. That includes not just China but also the wider swath of countries affected by America’s earlier tariffs on steel and aluminum: Canada, the European Union, and now Russia — which introduced new levies Friday on US construction equipment and other machinery.


The American business community, which was won over by Trump’s big tax cut and deregulation efforts, seems to be hoping that the president will eventually back down. The US Chamber of Commerce —

a lobbying powerhouse —

has launched a campaign denouncing the tariffs, while US companies increasingly go public with their complaints.

The iconic US automaker General Motors warned the government that tit-for-tat tariffs might hurt its business by raising the costs of much-needed parts. Harley Davidson has announced plans to move some operations overseas. And America’s largest manufacturer of nails (the kind you hammer, not the kind you stick on) has laid off dozens of workers, its balance sheet thrown off by the rising cost of metal.

As the trade war expands, more and more industries will be affected. Soybean farmers and other agricultural producers are about to lose access to the profitable Chinese market, and whiskey distillers are facing new tariffs on sales to Europe, Canada, and Mexico.

But so far Trump has shown no signs of wavering. On Friday, he threatened to expand tariffs until they encompassed every single Chinese product.

His hope, it seems, is to increase pressure until China either concedes entirely or agrees to meet the administration’s key demands — reducing the substantial trade deficit between the two countries and limiting China’s access to sensitive US technology.


One reason the administration’s trade warriors are sticking to their guns is a grounding belief that China is more vulnerable than the United States.

While retaliatory tariffs against the United States will hurt this or that sector, the total effect is limited by the fact that we don’t export all that much to China — $130 billion compared with the $500 billion they send us.

Yet, China still has plenty of ways to hurt US companies. Already there are reports of mysterious customs delays and unexpected forms of red tape. Moving forward, nothing prevents them from turning down partnerships with US companies, slow-footing regulatory requests, and otherwise making it difficult for Americans to do business.

Not to mention that China’s one-party political system gives leaders more cushion to absorb short-term economic pain in the name of broader strategy. That’s a luxury Trump doesn’t have, going into a midterm election where his party needs every vote — including from workers, farmers, and executives whose earnings are being pruned by this trade war.

In the end, it’s still possible that Trump’s high-wire strategy will pay off. The Chinese may agree to negotiate a broad range of issues, while the EU may lack the political cohesion for a protracted and costly fight.

For Trump, though, the strategy looks a lot like “shoot first, ask questions later.” A trade war isn’t fought with missiles and special forces, but there could be real casualties.


Evan Horowitz digs through data to find information that illuminates the policy issues facing Massachusetts and the U.S. He can be reached at Follow him on Twitter @GlobeHorowitz.