Donald Trump gives up on his lost trade war
Donald Trump is the guy who starts a fistfight with his friends, get pummeled accordingly, begs his friends to stop beating him up, and then declares victory after they take mercy on him. That’s what we learned today when Trump announced during a White House press conference that he was abandoning his tariffs against the European Union, in exchange for the European Union abandoning its retaliatory tariffs against the United States.
Despite Trump’s best effort, there is no possible way for him to spin this as a victory. He insisted that his tariffs would prompt U.S. allies to hand him more favorable trade deals, thus boosting the U.S. economy. But the Dow Jones Industrial Average quickly lost around ten percent of its value in response, as U.S. stock market investors were betting he couldn’t pull it off, because centuries of history have taught us that neither side ever wins a trade war.
Sure enough, U.S. trade allies responded with costly retaliatory tariffs. Earlier this week it was revealed that the Trump administration was preparing to hand $12 billion in new subsidies to U.S. farmers, in order to try to compensate for the damage being done to them by Trump’s tariffs. The negative response to this news seemed to be enough to scare Trump into abandoning his failed trade war. Sure enough, he held an impromptu press conference today with European Commission President Jean-Claude Juncker to announce that the tariffs on both sides were being largely eliminated.
This means that Donald Trump has officially lost yet another one of his big gambits. He used up significant political capital by going against his own party to start this trade war, and now he has nothing to show for it, beyond egg on his face. Trump has reminded us yet again that he’s the world’s worst negotiator. He’s lucky the European Union was willing to let him off the hook, presumably only because Europe wants to rebuild relations with the United States after Trump is gone.
