Trade war casualties

This editorial appeared in The Chicago Tribune. “I probably just lost $50,000. That’s my first house.” So said Illinois farmer Aaron Wernz, speaking to a Wall Street Journal reporter after China announced it would put a 25 percent tariff on U.S. soybeans, which Wernz grows. The tariffs will raise prices to Chinese buyers and cut their purchases, which could cost American soybean growers $1.7 billion.

President Donald Trump’s tirades about bad trade deals have turned to action, and the perils of this approach loom.

Last month, the administration announced it would put new duties on imported aluminum and steel, with the chief target being China, which answered with tariffs on U.S. pork, fruit and nuts.

Then the Trump administration announced 25 percent duties on more than 1,300 Chinese products worth some $50 billion. Beijing countered with equal levies on $50 billion of 128 U.S. goods, notably soybeans, corn, cotton, chemicals and cars.

If the U.S. and China continue to escalate, American consumers, corporations and farmers all stand to lose big.

The president’s aides say the main goal is to force China to abandon unfair practices such as the forced transfer of American technology by firms doing business there.

The complaint is valid, but the best way to curb illegitimate practices is through negotiations. Trump missed a great chance when he walked away from the Trans-Pacific Partnership.

China was forced to make big reforms to gain admission to the World Trade Organization in 2001, and it is subject to penalties when it violates WTO rules. The U.S. ought to be leading the charge to reopen negotiations to address that.

Trade wars, by contrast, are sure to cause higher prices to consumers, lost sales to farms and factories, and a drag on the U.S. economy. And there is no guarantee such a fight would solve the problems that led to it.