This is how President Trump lost his trade war with China

Trade wars rarely have victors. They do, however, sometimes have losers. And Donald Trump has definitely turned out to be a loser.

Of course, that’s not now he and his team are portraying the tentative deal they’ve struck with China — they’re claiming it’s a triumph. The reality is that the Trump administration achieved almost none of its goals; it has basically declared victory while going into headlong retreat.

And the Chinese know it. As The New York Times reports, Chinese officials are “jubilant and even incredulous” at the success of their hard-line negotiating strategy.

To understand what just went down, you need to ask what Trump and company were trying to accomplish with their tariffs, and how that compares with what really happened.

First and foremost, Trump wanted to slash the U.S. trade deficit. Economists more or less unanimously consider this the wrong objective, but in Trump’s mind countries win when they sell more than they buy, and nobody is going to convince him otherwise.

So it’s remarkable that the trade deficit has risen, not fallen, on Trump’s watch, from $544 billion in 2016 to $691 billion in the 12 months ending in October.

And what Trump wanted in particular was to close the trade deficit in manufactured goods; despite giving lip service to “great Patriot Farmers,” it’s clear he actually has contempt for agricultural exports. Last summer, complaining about the U.S. trade relationship with Japan, he sneered: “We send them wheat. Wheat. That’s not a good deal.”

So now we appear to have a trade deal with China whose main substantive element is … a promise to buy more U.S. farm goods.

Trump’s team also wanted to slow China’s drive to establish itself as the world’s economic superpower. “China is basically trying to steal the future,” declared Peter Navarro, a top trade adviser, a year ago. But the new deal, while it includes some promises to protect intellectual property, leaves the core of China’s industrial strategy — what’s been called the “vast web of subsidies that has fueled the global rise of many Chinese companies” — untouched.

So why did Trump wimp out on trade? In general, he had delusions of grandeur. America could never succeed in bullying a huge, proud nation whose economy is already, by some measures, larger than ours — especially while simultaneously alienating other advanced economies that might have joined us in pressuring China to change some of its economic policies.

At a more granular level, none of the pieces of Trump trade strategy have worked as promised.

Trump has repeatedly insisted that China is paying his tariffs, but Chinese export prices haven’t gone down, which means the tariffs are falling on U.S. consumers and companies. And the bite would’ve risen substantially if Trump hadn’t called off further tariff increases scheduled for this past Sunday.

At the same time, Chinese retaliation has hit some U.S. exporters, farmers in particular, hard. And while Trump may quietly hold farm exports in contempt, he needs those rural votes — votes that were being put at risk despite a farm bailout that has already cost more than twice as much as Barack Obama’s bailout of the auto industry.

Finally, uncertainty over tariff policy was clearly hurting manufacturing and business investment, even as overall economic growth remained solid.

So Trump, as I said, basically declared victory and retreated.

Will Trump’s trade defeat hurt him politically? Probably not.

There will, however, be longer-term costs to the trade war. For one thing, the business uncertainty created by Trump’s capriciousness won’t go away.

Beyond that, Trump’s trade antics have damaged America’s reputation.

Our allies have learned not to trust us. We have, after all, become the kind of country that suddenly slaps tariffs on Canada — Canada! — on obviously spurious claims that we’re protecting national security.

And our rivals have learned not to fear us. Like the North Koreans, who flattered Trump but kept on building nukes, the Chinese now know that he talks loudly but carries a small stick, and backs down when confronted in ways that might hurt him politically.

These things matter. Having a leader who is neither trusted by our erstwhile friends nor feared by our foreign rivals reduces our global influence in ways we’re just starting to see. Trump’s trade war didn’t achieve any of its goals, but it did succeed in making America weak again.