The new trade war is now in full swing. This comes on top of the global currency war that began in 2010.
Countries like China have been fighting the trade war for decades with neomercantilist policies involving tariffs on imports, subsidies for exports, theft of intellectual property and accumulation of gold. It’s just that the U.S. was not fighting back until very recently.
President Trump wanted to penalize China with U.S. tariffs and other penalties as soon as he was inaugurated in January 2017, but his national security team persuaded him to hold off because the U.S. needed China’s help with North Korea. Now that it has become clear that China will not help on the North Korean situation beyond some token commitments, the gloves are off.
The national security team has been brushed aside when it comes to trade wars, and the White House “trade troika” of Robert Lighthizer, Wilbur Ross and Peter Navarro is now empowered. Trump has already imposed tariffs on solar panels and washing machines and is preparing to impose more harsh tariffs and other penalties in the areas of steel, aluminum and intellectual property theft.
Most globalist elites oppose these measures. They argue that the U.S. wins from free trade even when others don’t play by the rules. That claim is false (because of the mobility of comparative advantage), but still the elites stick to it.
This article reports a strange twist in this elites-versus-Trump debate. Normally, major company CEOs would be expected to line up with the elites and oppose Trump’s trade war. But this article shows that a majority of CEOs in the U.S. and around the world favor protectionism in various forms.
This would come as no surprise to Alexander Hamilton and Henry Clay, who understood 200 years ago that America benefits from protectionism and gold.