Walking Trump back from this trade war

In just a few weeks, President Trump has destroyed a system of global trade rules that over the past 75 years brought unprecedented peace and prosperity to most of the world, including the United States. With his threat to levy punitive tariffs on an additional $100 billion in Chinese imports, and China’s vow to fight the United States “at any cost,” the world is now on the verge of the worst trade war since the 1930s.

The President has no interest in history, but for those who may be in a position to block this self-inflicted wound — members of Congress, the nation’s governors, powerful business interests — a quick refresher is in order.

In 1947, President Harry Truman delivered a speech at Baylor University on the eve of an agreement signed by 23 nations in Geneva to create the General Agreement on Tariffs and Trade (GATT). Led by the United States, the GATT would be joined by nearly every country, and would oversee during the next half century negotiations that produced the steepest cuts in history in tariffs and other forms of import protection.

The effort culminated in the creation of the World Trade Organization (WTO) in 1995, which established the first system of binding rules for resolving trade disputes, precisely for the purpose of preventing escalating trade conflicts.

Truman, urging support for a new system of global trade rules, reminded his audience of the grim history they had just endured: “Many of our people here in America used to think we could escape the troubles of the world simply by staying within our own borders. Two wars have shown how wrong they were. We know today we cannot find security in isolation.”

Economic cooperation, he said, was as important as political cooperation. “Economic conflict is not spectacular — at least in the early stages. But it is always serious.” It starts when one nation takes unilateral action to protect its own producers with tariffs or quotas, blocking imports from other countries.

In the targeted countries, the producers who can no longer export their goods “get angry, just as you or I would get angry if such a thing were done to us. Profits disappear; workers are dismissed. The producer feels he has been wronged, without warning and without reason. He appeals to his government for action. His government retaliates, and another round of tariff boosts, embargoes, quotas and subsidies is under way.”

“This is economic war,” Truman said. “In such a war, nobody wins.”

There had been some hope that Trump, for all his bluster, had some sense of this danger, or that at least his senior economic officials would restrain him. The trade problems the United States and other countries face with China — government subsidies, forced transfers of western technology, preference for national companies and restrictions on foreign investment — are serious and in need of a firm response. The world waited too long to tackle these problems with the urgency they deserved. Some sanctions may be necessary now to persuade China to respond seriously.

But with Trump’s impulsive threat to penalize another $100 billion in imports on top of $50 billion already threatened, the U.S. is now simply inviting economic conflict with China. And instead tempering the President, U.S. Trade Representative Robert Lighthizer issued a sycophantic statement endorsing the escalation as “an appropriate response to China’s recent threat of new tariffs.”

The question now is who can walk the President back?

Congress is the best hope, which is hardly encouraging. Congress has clear constitutional authority over trade, but wresting it away from Trump would require Republicans to stand up to him — something they have shown no inclination to do — and would require Democrats to cooperate rather than seizing on the rift for political advantage.

Perhaps more plausibly, U.S. business — which sold its soul to Trump for tax cuts and deregulation — might now wake up to the serious economic damage the President will cause if he gets the trade war he wants. And farmers in the country’s heartland, who will be the first targeted by Chinese retaliation, must make their voices heard.

The good news is that the creaking wheel of government provides some time for pressure to build on the President. And time, perhaps, for someone to share with him Truman’s counsel:

“The choice is ours. We can lead the nations to economic peace, or we can plunge them into economic war.”