By: Larry Elliott
June 03, 2018
First it was Europe, Canada and Mexico. Now Donald Trump’s focus has switched to the real target for his trade war: China. Wilbur Ross, the US commerce secretary, is in Beijing for talks aimed at reducing America’s $30bn-a month-deficit. Exports of Chinese high-tech manufactured goods are top of Ross’s list.
Make no mistake: Trump’s strategy is a sign of weakness not strength. Countries that resort to protectionism normally do so for one of two reasons: to assist the development process when they are on the way up and to slow the pace of decline when they are in relative decline.
In America’s case, it is certainly the latter. Hefty tariffs of 40% on imported manufactured goods helped the US to build up its industrial power in the second half of the 19th century. By 1945, the US was by far the most powerful economy in the world, and supported trade liberalisation because it needed to find overseas markets for its goods.