Donald Trump is having a really bad week. Most of my colleagues do not quite agree with having a trade war with China. And even those who do concede that some adjustments need to be made to our trading arrangements with a rival mercantilist policy in Peking, don’t trust the Trump administration to do the work carefully.
Trump gave them proof today that they’re right to worry.
Last week, amid some jittery noises about the state of the economy and the markets, Trump announced the U.S. would delay some of the tariffs set to take effect next month until mid-December. Trump sold this publicly as relief for American shoppers ahead of the holidays. Markets moved in a positive direction, fed by White House rumors that negotiations with China were in their final lap.
The delay was silly, and signaled precisely how weak Trump thinks his hand is. He has been moaning about the Fed chairman. Partly, that’s because of the worrying economic signs and his sagging poll numbers. But partly, it’s the trade war. China has no independent central bank, and Chairman Xi can coordinate policy in ways Trump can’t. Xi also may have more political cover in that he’s not facing election. (Though I think American news outlets, disliking Trump, haven’t told us the full story of how difficult the trade war has been for China).
In any case, the Chinese responded by slapping tariffs on basically all the remaining categories of goods the U.S. trades to China. Trump waited until the market closed and fired back furiously. A capper on an out-of-control week.
Even if you think trade action is justified and a decent strategy for achieving a better relationship with China, it’s hard not to see the delays, and Trump’s subsequent whining, as a negotiating blunder. And now we’re all paying for it.