If Trump’s tariffs start a trade war, it would be an economic disaster

There is general agreement in the economic research on the effects of Trump’s trade and tariff wars in his first term as president, in which he placed tariffs on about $380bn of US imports. The overall impact on living standards for US workers and most Americans is found to be negative, with the cost of the tariffs being absorbed by US consumers. Employment overall did not increase, and may have fallen due to the negative impact of retaliatory tariffs.

The economic research looking at the expected impacts of tariffs that Trump has talked about going forward also finds the impact on the US economy to be negative. And there is potential for much more damage if other countries respond with more retaliatory tariffs than they did in 2018-2020.

Leroy wrote on Dec 5^th, 2024 at 2:02pm:


So he's lying about the Tariffs?

Quote:


Neo-Liberalism, your problem is with Neo-Liberalism.

The shift to neoliberalism under Reagan, with its emphasis on free markets, deregulation, privatisation, and reduced government intervention, fundamentally reshaped the U.S. economy. Manufacturing declined as industries went global, jobs moved offshore, and economic power shifted to banking and services.

Tariffs won’t reverse this trajectory.

If tariffs are being used as bargaining chips, what is the goal? Trump claims it’s to bring back manufacturing, but where’s the strategy? Tariffs are the only tool he has articulated. How does he intend to challenge neoliberalism, the ideological foundation of the Republican Party itself?

In reality, the tariffs will likely deepen the neoliberal playbook. Deregulation will be repackaged as the "solution" to any economic fallout, with both "red tape" (labour protections) and "green tape" (environmental safeguards) on the chopping block. Rather than restoring industry, this approach entrenches the very system that hollowed out manufacturing in the first place.

Meanwhile, China will call Trump’s bluff because, frankly, he lacks alternatives. He’s betting everything, going nuclear, before he even has a viable hand to play. His approach is reckless brinkmanship, and sadly, China’s leadership appears more strategic and disciplined.

Making matters worse, Trump has systematically purged advisors who might challenge him or offer sound counsel, replacing them with sycophants. This leaves him isolated, incapable of crafting a coherent response to the high-stakes game he’s started.

I don’t think you fully grasp how precarious this situation is. Trump’s rhetoric is hollow, his strategy ill-conceived, and the stakes are enormous. If this is truly a bluff, as you suggest, then it’s a dangerous one. He’s unlikely to see it through, folding seems inevitable, unless, of course, he’s willing to gamble the financial stability of the entire economy just to “prove” something to China.

And of course, it's the people, including his base, that will have to bail him out, paying more for practically everything, while he sits back lying, saying "China" has paid billions in tariffs.

I really hope I'm wrong, because we'll suffer in that trade too, not just his supporters and the rest of the people in the US.

The idea of a debate is to seek truth, as opposed to "belief".

The topic is Trump and tariffs; we are  debating whether  Trump will MAGA, by (us) drawing on knowledge re the effects of tariffs,  and Trump's past record in job creation.