(The Bloomberg View) -- President Donald Trump’s aggressive new trade policy isn’t going too well. His threats to impose tariffs on imports from China, Europe and other trade partners have so far yielded much less than he promised — and instead of retaliating, he shows signs of backing off.
It’s right to criticize him for saying one thing and doing another, but bear in mind that he could do worse things than that — such as actually keeping his promise to start a trade war. Given this president’s benighted approach to trade and international relations, capitulation with no further damage done would be a pretty good result.
Financial markets were buoyed this week after the U.S. and China announced a truce of sorts. Trump said the U.S. would soften the penalties it had previously announced on ZTE, a Chinese electronics company that violated U.S. sanctions and then failed to comply with the terms of its settlement with the Commerce Department. China has promised to import more from the U.S. and to address complaints about its support for domestic producers at the expense of American investors. And on Tuesday it said it would cut its tariff on car imports from 25 percent to 15 percent.
To be sure, there’s little here for Trump to be proud of. The reversal on ZTE undermines the credibility of U.S. sanctions enforcement. Entwining this issue with the broader quarrel about trade policies was a mistake in the first place. The supposed concessions on imports don’t amount to much — China was going to do most of this anyway. Its promises on industrial supports, inward investment and intellectual property are vague and have been heard before. The lower car tariff will help European and Japanese manufacturers more than U.S. companies.
But don’t make the mistake of believing that Trump should demand more. The president’s whole approach to these questions has been wrong, and the last thing one should want is for him to carry his reasoning through to its logical conclusion: trade war. Far better for the economy if the administration brags about its non-wins and backs off.
Ideally, having chosen to de-escalate his fights with trade partners, Trump would press for changes in smarter and more productive ways. The U.S. does have valid complaints about subsidies and other state supports in Europe, and about China’s efforts to coerce intellectual property from its inward investors. Existing agreements and institutions aren’t well-suited to resolving these disputes promptly. They need to be improved — using existing alliances, new trade agreements, and a revived World Trade Organization. The U.S. should lead this effort.
For decades it did exactly that, and it worked. Trump’s erratic bullying has been failing, and persisting with it would risk enormous damage to the U.S. and global economies. So if the administration retreats, fine — especially if it learns the lessons at hand: In leveling the playing field for international trade and investment, cooperation and mutual interest get you a lot further than threats and bluster ever could.
©2018 Bloomberg L.P.