PD Editorial: Only losers, no winners in Trump’s trade war

There may not be any shooting in the latest U.S. war, but there will be plenty of casualties.

We're talking, of course, about President Donald Trump's ill-advised trade war, which he escalated on Friday by imposing 25 percent tariffs on $34 billion worth of Chinese imports.

China, predictably, retaliated with $34 billion of tariffs on U.S. exports.

These initial salvos affect a tiny fraction of the trade between the world's largest economic powers, but Trump has threatened to keep raising the stakes until nearly all of the goods the United States imports from China are subject to steep tariffs - and even to withdraw the U.S. from the World Trade Organization.

The casualties will include U.S. consumers and companies and port cities such as Oakland, Los Angeles and Seattle.

Whatever the pain, there's little chance that Trump will achieve his stated goal of reducing the trade deficit with China.

That isn't to say the United States doesn't have any legitimate complaints about Chinese trade policy, but Trump would have a better chance of success if he was willing to work with traditional U.S. allies such as Canada, Mexico and the Europe Union. Unfortunately, he already alienated them by slapping tariffs on steel and aluminum, with threats to move on to cars and auto parts.

Any credible economist will tell you that protectionism will backfire.

A tariff is a tax, and when the U.S. raises tariffs on consumer products, prices rise. The same thing happens when tariffs push up the cost of raw materials.

For example, earlier this year, the Trump administra- tion imposed tariffs of up to 30 percent on newsprint imported from Canada. The move came in response to a claim of unfair competition by a New York hedge fund that owns a paper mill in Washington known as Norpac. U.S. suppliers lack the capacity to fill the demand for newsprint, so they raised their prices to match the cost of imported paper.

Newspapers, including this one, have been forced to cut back or raise prices.

“Norpac's petition is an example of protectionist cronyism,” publisher and former presidential candidate Steve Forbes wrote recently in the Wall Street Journal. “Among U.S. paper producers, the company is conspicuously alone in its petition for protective tariffs.”

The ultimate risk, as Forbes wrote, is small papers will fold, leaving Americans without vital sources of local news: “It is local newspapers, not cable news networks, that scrutinize the gongs-on at town halls, and how tax payer dollars are spent on schools and public works.”

Sen. Susan Collins, R-Maine, introduced legislation to rescind the newsprint tariffs, but given the lethargic pace in Congress, a better hope may be the U.S. International Trade Commission, an independent panel that is scheduled to consider them at a hearing next week.

You can sign a petition calling on the commission to reverse the tariffs at stopnewsprinttariffs.org.

It's going to take more than petitions to avoid a lot of collateral damage if there isn't a quick settlement to the escalating trade disputes between the White House and, well, practically everyone.

Free trade is a long-standing Republican goal, joined over the past two decades by many Democrats. They have succeed in reducing tariffs, removing barriers and creating institutions like the World Trade Organization to settle disputes without resorting to trade wars. Yet the president seems determined to pick a fight that American workers and consumers are likely to lose. Sad.

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