Josh Barro: “It’s also worth considering the possibility that we have gotten too far down the trade-war road for the president to unwind the problems he’s caused. To the extent there are signs of weakness in the domestic economy, they are largely on the producer side. The consumer sector still looks decent. But tariffs and uncertainty over future tariffs have already discouraged businesses from producing and investing. And China has less reason to participate in a de-escalation than they did a year ago, since they can just ride out the next year and hope to be facing a new, less-hostile president.”
“With a China less willing to back down and a trade war maybe too far along to stop, the president is backed into a corner. He may feel he can’t save the economy by folding. And so he may follow his instinct — one of the few consistent policy views he has expressed for decades — that protectionism is good for the economy, and that despite what the markets and his advisers are telling him, trade wars are good and easy to win and more tariffs and more disruption will only mean more winning for the U.S.”
“What the president showed us today is he’s prepared to hit the gas as he approaches the cliff. That should make us all worried about the economic outlook — and it should make Republicans very worried about the political outlook.”
Save to Favorites