Trade war update: Trump lied, the economy died

Trade war economic hell

With the 2020 election in full swing ahead of the Iowa caucuses to be held in about a month, the Trump propaganda machine has been busy touting his imaginary accomplishments in a desperate attempt to save his re-election. One of Trump’s biggest imaginary accomplishments is how he singlehandedly created “the greatest economy in the history of America,” despite boatloads of data proving otherwise, and how, in reality, his economy is no better than the Obama economy he inherited.

A primary reason for Trump’s mediocre economic success is his scatterbrained and directionless policies, specifically his “good and easy to win” trade war modeled after 1800s protectionism and the 1930s Smoot-Howley Tariff Act responsible for fueling the Great Depression.

As we approach the two-year anniversary of his declaration of war against the free market, the flames in the economic hell Trump has created will soon become an inferno incinerating the American economy — assuming Nationalist Conservatives working with Democratic Socialists don’t destroy it first.

The hidden costs of Trump’s trade war approach to economics were revealed early in 2019 as we learned how, despite claims to the contrary, the tariffaxes he imposed on our trading partners weren’t being paid by China and other countries. The were, in fact, being paid by you and me to the tune of $1.4 billion a month at the end of 2018.

As 2019 wound to close, and as Trump doubled down on his trade war, signs that the economy was slowing down were evident to everyone not looking through orange-tinted glasses. US manufacturing contracted for four months straight through November, and farms hurt by the trade war only managed to survive due to Trump’s bailout program that has cost more than double what Obama spent to bailout the auto industry during the Great Recession.

Now, according to a new National Bureau of Economic Research paper, we learn Trump’s claim that China and other nations have been paying the tariffs he levied on thousands of products since his trade war began is a lie. According to the report, approximately 100 percent of the costs have fallen directly on American firms and consumers.

“Using another year of data including significant escalations in the trade war, we find that US tariffs continue to be almost entirely borne by US firms and consumers,” the economists — Mary Amiti of the Federal Reserve Bank of New York, Stephen J. Redding of Princeton, and David E. Weinstein of Columbia University — wrote in the paper circulated this week.

The NBER paper used customs data through October 2019, so the effects of the tariffs, which were increased this past fall, may not have been fully seen yet. Still, the report reflects a series of similar independent findings circulated over the past year.

Trump was allegedly elected, in part, due to his track record of business success, even though he’s had more business failures than successes — including four bankruptcies — while achieving the self-proclaimed status of “the king of debt.” And despite his rhetorical hyperbole regarding the trade war, consumers are paying the bill. In the end, Trump lied and the economy died.

So, if you think the chosen one is going to realize the error of his ways and reverse course we enter the 2020 election season, let me quote from Dante’s Inferno: “Abandon all hope, ye who enter here.”


David Leach is the owner of the Strident Conservative.

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