The Millennial View: Donald Trump’s trade policies are dangerous
Usually, when making reckless threats about the economic furor he’ll unleash upon China, Mexico and other major U.S. trading partners, Donald Trump claims they’ll all cower helplessly in terror in response.
[...] in the battle to Make America Great Again, no trade war will ever materialize.
If other countries choose to retaliate — or “punch back,” in the Trumpian vernacular — by introducing tariffs of their own, our own exports will get more expensive to buyers abroad.
A downward spiral would result, leading to about 7 million fewer American jobs than there would be in the absence of Trump’s machismo-driven trade policy.
Even if Mexico and China for some reason chose not to levy retaliatory tariffs, mind you, Trump’s policies would still batter the U.S. economy.
If we levy new tariffs on Mexican and Chinese imports, those imported products become more expensive to U.S. consumers.
According to the Moody’s model, if we raise tariffs as Trump desires and there is (astonishingly) no retaliation from abroad, we may not fall into recession, but we’ll still lose out on several million jobs.
What about Trump’s claim that raising tariffs would encourage more companies to move their manufacturing activities to the United States?
Americans romanticize the manufacturing industry because it used to provide stable, middle-class jobs to large numbers of U.S. workers.
A recent report from researchers at UC Berkeley found that about a third of families of front-line manufacturing workers receive some form of public assistance because they earn so little.
[...] there’s another, scarier reason to fear Trump’s dangerous trade policies.
The “capitalist peace” theory posits that commerce and economic interdependence help prevent violent conflict.