What happened
U.S.-China talks ease fears of a trade war
Fears that President Trump’s hardball tariff tactics would spark a global trade war receded this week after The Wall Street Journal reported that Chinese and American negotiators are quietly working to hammer out an understanding between the two countries. Trump threatened last week to impose tariffs on $60 billion worth of Chinese industrial and technology products in retaliation for Chinese rules that force American companies to turn over their intellectual property in order to do business there. China responded with threats to slap retaliatory penalties on $3 billion in U.S. goods, including fruit, pork, and ethanol, chosen specifically to inflict pain on Trump’s rural supporters.
U.S. stocks suffered their worst week in two years, with the escalating tit-for-tat unnerving investors, before rebounding on the news that high-level talks are underway. The Trump administration also forged a revised trade agreement with South Korea this week, opening the country up to more U.S.-made automobiles. Commerce Secretary Wilbur Ross credited Trump’s threat to impose tariffs with wringing concessions from Seoul. “I think what the market is starting to get used to is we are not suicidal,” Ross said. “This is not some mission to blow up the world.”
What the columnists said
The dreaded Trump trade war is looking more like a “trade skirmish,” said Jeff Spross in TheWeek.com. The expected impact of Trump’s threatened tariffs was already “small potatoes,” affecting a mere 0.5 percent of the U.S. economy. But instead of what pundits feared—a disastrous spiral of mutual economic retaliation— Trump’s carrot-and-stick approach appears to be getting results. Trump is “deploying the same bullying tactics he used to squeeze rivals in the real estate business,” said Hans Von Der Burchard and Jakob Hanke in Politico.com. Economists like to argue that nobody wins a trade war. But, for now, Trump is at least winning some battles.
Trump hasn’t won anything, said David Dayen in NewRepublic .com. The White House’s entire trade agenda involves Trump making blustering threats and then extracting “meaningless concessions” to prove his “dealmaking prowess.” Take the agreement with South Korea. Trump’s supposed coup was getting Seoul to double the number of cars U.S. automakers can import into the country. But the U.S. didn’t even export the maximum number of cars before, because Koreans don’t like big American autos. In exchange, South Korea got an exemption from Trump’s steel tariffs. But then, the substance of these agreements isn’t the point. “Getting to a podium to say ‘We have a deal’ appears to be the point.”
None of this changes the fact that China’s “economic aggression” must be confronted, said Josh Rogin in The Washington Post. It’s estimated that the U.S. loses between $225 billion and $600 billion annually to intellectual property theft. By far the biggest culprit is China, where state-controlled firms routinely shake down non-Chinese technology companies. “The United States must not embrace protectionism for its own sake.” But in this case, we may have no other choice.