Daniel McCarthy

Why Trump’s ‘trade war’ makes strategic sense

Has Donald Trump sparked off a trade war? His plans for a 25 percent tariff on steel imports and 10 percent tariff on aluminum have shocked friend and foe alike. China is outraged; so are Canada, Japan, and South Korea—allies that in fact export more steel to the U.S. than China does. They stand to be hurt worst if they aren’t granted exemptions or cut special deals by the president. Trump accuses the Chinese of ‘dumping’ steel into the American market, while the legal grounds for his new tariffs rest in the idea that strategically critical manufacturing is endangered by a diminished U.S. metals industry. But if the tariffs inflict the brunt of the misery for the region’s steel producers on China’s rivals—Japan, South Korea, and Taiwan as well—the result might only be to strengthen the People’s Republic. A more productive American steel industry will come at the cost of weaker allies in East Asia. Does that make strategic sense?

It very well might. Japan and other U.S. allies have flourished in the trade environment that Washington has upheld since the end of the Cold War. But China has flourished the more, to the point of overtaking the U.S. as the world’s largest economy. If power differentials count—and they do—Washington’s way if doing business has only fed a great power rival while slowly starving America herself of hard industry.

America’s allies, and America’s own non-Trump leadership, would like to keep the game going nevertheless. Globalists of the right-wing Republican and left-wing Democratic varieties alike imagine that China aspires to nothing more than to grow and get rich. So what if that also means China grows more powerful?

Unfortunately, China’s leaders, above all Xi Jinping—now likely president-for-life—have shown much more imagination than the West’s merely money-minded liberals.

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