A global united front is needed to combat the scourge of America’s trade war
Countries must begin talks on a new global trade agreement under World Trade Organisation to preserve multilateralism, with or without the US
And so it begins, and there can only be apprehension about where trade war will end.
The conflict will be confusing, attritional, with no clear sense of cause and effect, with harm inflicted on who knows how many innocent bystanders.
Having unleashed the dogs of trade war, Donald Trump is now doing what he does best – moving on to another subject. He is off to theatrical sparring on the future of Nato, before stopping off for friendly fireside chats with Queen Elizabeth and Brexit-battered Theresa May, and sorting the world’s problems with old friend Vladimir Putin. This is what attention deficit disorder looks like when it appears in grown-up people.
Hundreds of academics, and thousands of newspaper column inches, are being devoted to tracing the progress of the tariff war, attempting to calculate the cost to all parties concerned, and elaborating the economic illiteracy of a conflict based on bilateral visible trade balances.
But this is all spitting in the wind to a blithely unconcerned Trump trade team that lives with naive confidence in a universe uncluttered by any inconvenient facts. Kaushik Basu, former World Bank chief economist and now economics professor at Cornell, intelligently and accurately notes that: “Arguing against globalisation is as instructive as blaming gravity for a building collapse.” But who among Trump’s “core” cares?
Who among them cares that railing against a trade deficit with China is as relevant as railing against a bilateral trade deficit with your grocery store? All of us over the course of the year build a massive bilateral trade deficit with our hairdresser or our favourite restaurant, but do we storm in with threats until they redress the haircut imbalance?