by Mitch Kokai
Senior Political Analyst, John Locke Foundation
Veronique de Rugy asks at National Review Online whether the United States or China will end up being the bigger bully in a trade war.
President Trump claimed in a tweet that “trade wars are good, and easy to win.” Unfortunately, the American people are about to experience firsthand how wrong the president is and how painful and hard it really is to “win” a trade war. This difficulty is magnified when such wars are waged against authoritarian regimes such as in China.
Tariffs imposed by any government are, first and foremost, penalties on those of its own citizens who buy imports (or import-competing domestic goods). Uncle Sam’s tariffs, therefore, are penalties imposed on Americans. That’s what they are, period. Likewise, Chinese tariffs are penalties imposed on the Chinese people. But surely at this game of abusing its own citizens, the Chinese government has the upper hand. Compared to Uncle Sam, it will be the less likely to flinch, largely because its officials bear no political costs for the tariffs they impose.
You can already see it by the way China promptly retaliated to last week’s announcement. The U.S. hasn’t even published the details about how its trade policy will be implemented, yet the Chinese have already promised to retaliate and implemented their retaliatory measures.