Sometimes in soccer, an attempt to defend one’s turf results in a score for the opposing team—an “own goal.” There have already been nine such incidents of self-sabotage in the 2018 World Cup, by far the most in the history of the tournament. But you won’t find the most spectacular example of the summer on the pitch in Russia. That distinction goes to Donald Trump’s administration, whose determination to start a trade war with China is, like the best own goals in soccer, muscular in its approach, blind in its aim, and self-injurious in its consequences.
After months of warnings and threats and failed negotiations with China, United States officials have started collecting tariffs on $34 billion worth of Chinese goods. In response, Beijing has said that it will retaliate with levies on American pork, soybeans, and cars. In response to that response, Trump has promised to re-retaliate by applying tariffs to more than $200 billion worth of goods from China if Beijing follows through.
This sort of volley is dramatically referred to as a trade war, but it might be more productive to think of it as an international tax standoff. The vocabulary around trade is filled with specialized terms like tariff, levies, and retaliatory measures. But a tariff is simply a tax paid by companies that import foreign goods. This has the effect of raising prices on foreign stuff, theoretically making domestic industries more competitive. A quick example: A U.S. tariff on alcohol from Scotland raises the price of scotch for American drinkers. That punishes scotch fans like me, but it helps American whiskey distillers by making bourbon more attractive to consumers.
“Trade wars are good and easy to win,” Trump has said. Let’s consider those adjectives, one at a time. First, trade wars aren’t “good” …read more
Source:: The Atlantic – Global