How to Win Trade Wars: Don’t Fight Them

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The Top Five

The day’s most vital commentary:


Stocks wandered about. The Fed would be fine with a little inflation. Elon Musk has thoughts. Netflix is worth more than Comcast.

How to Win Trade Wars: Don’t Fight Them

Surrender to Win

In the 1983 movie “War Games,” a NORAD supercomputer (spoiler alert) saves the world when it realizes that, in the game of Global Thermonuclear War, “The only winning move is not to play.” The Trump administration may be learning the same thing about the game of Global Trade War.

President Donald Trump is taking flack for losing/surrendering/caving to China in trade talks. That’s to be expected from the likes of Steve Bannon. But people who don’t just want to watch the world burn should be encouraging Trump’s softer approach, not goading him into doing something rash, writes Ramesh Ponnuru. (Bloomberg Opinion Today readers might recall a similar, if overly generous,  argument here last week.)

Of course, we should criticize the administration for its ham-fisted handling of talks. That hurt U.S. credibility and exposed Trump’s lack of “demonstrated knowledge about trade policy, conflicting impulses and infighting aides,” Ramesh writes. “To be sure, there’s little here for Trump to be proud of,” add Bloomberg’s editors. He definitely needs a smarter approach to convince China to end some of its worst trade practices.

But that starts with recognizing “cooperation and mutual interest get you a lot further than threats and bluster ever could,” the editors write. Will the White House supercomputer get that?

Crisis? What Crisis?

Hey, remember that thing that happened to banking about 10 years ago? Something about deregulation and too much risk-taking? And then all our money was on fire? I don't know, it’s all a little hazy. Anyway, Trump, Congress and the Fed are weakening banking regulations, Bloomberg's editors note -- just after banks posted yet another quarter of record profits by overcoming crushing regulations, I guess?

Lawmakers pushing the rollback claim they’re just freeing small and mid-sized banks from Dodd-Frank’s cruel chains. Stephen Gandel, though, warns these banks are piling on risk in commercial real estate just when bigger banks are pulling back. And though big banks were central to the crisis a decade ago, small banks were at the heart of the savings and loan debacle of the 1990s.

Turkey in the Craw

If you noted a tinge of panic around emerging markets this morning, that was just Turkey’s lira collapsing, partly because President Recep Tayyip Erdogan doesn’t know how economies work. The good news: Turkey’s banking system seems stable so far, writes Marcus Ashworth. And Turkey’s central bank raised interest rates after an emergency meeting, putting a tourniquet on the currency. But Marcus warns Erdogan can easily undo that good work with, say, a few loose words.

Thinking Local

The U.S. economy has been growing for nearly a decade now, but the benefits haven’t been shared equally across the country. Justin Fox takes a look at state-level employment numbers and finds states with big cities – using big-league sports as a marker – have generally done better than those without.  

Even in booming big cities, though, some neighborhoods are left behind. A federal program in the 1990s to fund “empowerment zones” in struggling neighborhoods boosted jobs and wages without making rents skyrocket. The Trump administration is considering a variation called “opportunity zones.” But these are geared more toward real estate than jobs – and that could do more harm than good, by making housing even more unaffordable, warns Noah Smith.

Wave Signs

Tuesday night’s primary results show Democrats are nominating candidates that could help them even if there’s not a big blue wave in November, writes Al Hunt

Many of those candidates are women, and minority women at that, points out Jonathan Bernstein.

Chart Attack

Did General Electric Co. investors really think fixing the company would be easy? Brooke Sutherland is just asking.

How to Win Trade Wars: Don’t Fight Them

Wall Street may not have noticed, but Target Corp. is doing just fine, writes Sarah Halzack. (And so is Tiffany & Co.)

How to Win Trade Wars: Don’t Fight Them

The natural gas market is alive but mostly unresponsive to stimuli, according to Liam Denning.

How to Win Trade Wars: Don’t Fight Them

Speed Round

Valeant Pharmaceuticals Inc. isn’t as well-known as Enron, but its behavior under former CEO Mike Pearson has some disturbing similarities. – Joe Nocera

Mark Zuckerberg is more Sorcerer’s Apprentice than Faust. – Alex Webb

When it comes to car tech of the future, boring old automakers have the edge on disrupters. – Conor Sen

Trump should learn to love a stronger dollar. – Robert Burgess

If China wants a baby boom, then it must make life easier for working mothers. – Adam Minter

The Kicker

Here’s Barry Ritholtz’s very fine list of 10 books to read this summer. (And here’s the link to sign up for his newsletter.) 

Note: Please send book suggestions and kicker ideas to Mark Gongloff at


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