Trump’s Trade Policy Goes From Bad to Worse

(The Bloomberg View) -- Announcing plans for additional tariffs on $200 billion of imports, the Trump administration has taken another dangerous step toward escalating its trade war on China. China’s response, so far, has been measured, and that’s encouraging. The U.S. Congress has managed only the feeblest gesture of protest, and that’s disgraceful.

The president has told U.S. Trade Representative Robert Lighthizer to draw up new 10 percent tariffs on a wide range of Chinese goods and materials. All the objections to the previous round of tariffs on $34 billion of goods apply, only more so. If the policy goes ahead after the seven weeks allowed for public comment, it will impose a hefty new tax on U.S. consumers and producers. Supply chains and investment plans will be thrown into disarray. And if China retaliates, as it might feel it must, the economic damage will be compounded.

Its reaction so far has been cautious. The Ministry of Commerce said it was shocked by the latest move and that the Trump administration was “hurting China, hurting the entire world and hurting the U.S. itself.” All of which is true. It’s come to something when the world needs China’s communist government to school the U.S. in basic economics.

There’ll be a limit to China’s forbearance, though. As this pointless fight drags on, its government will be as concerned to save face as Trump is. It can’t retaliate dollar-for-dollar with tariffs on U.S. imports, because it buys less than $200 billion from the U.S., but other methods — assorted non-tariff barriers to trade and inward investment — are available.

If Beijing resorts to such measures, the risk of lasting harm will be compounded, because these administrative barriers could reverse earlier moves by China toward more market-friendly economic interventions. The trade conflict that Trump is stoking is capable, in the worst case, of obstructing further liberalization and pushing China toward heavier-handed state direction of its economy — to say nothing of chilling U.S.-China relations for years if not decades to come.   

Many in the U.S. Congress recognize the danger posed by this insidious trade-war logic, but their response so far has been pitiful. On Wednesday the Senate voted 88-11 to instruct itself to insert language into a funding bill “providing a role for Congress” on tariffs. The vote is non-binding, so the senators left themselves free to ignore their own instruction.

Language providing a role for Congress on tariffs can already be found in a more authoritative law — the U.S. Constitution. It provides that trade policy is the responsibility of the legislative branch. Trump’s maneuvers, which began under cover of a specious “national security” exception, violate the spirit and probably the letter of that provision. Yet all Congress has managed in reply to this dangerous usurpation of its role is a timid squawk of protest.   

Trump’s trade policy is getting more reckless by the day. If worse comes to worst, a self-enfeebled Congress will be equally to blame.

Editorials are written by the Bloomberg View editorial board.

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