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President Trump is brandishing the U.S. economy like a weapon, putting more than a trillion dollars of trade on the line as he opens economic wars on multiple fronts.
He has threatened tariffs on the United States’ closest trading partners, which are together responsible for more than 40 percent of American imports, to try to force them to accede to his demands.
Mexico earned a slight reprieve after Mr. Trump agreed to delay tariffs of 25 percent – which were supposed to go into effect on Tuesday – for a month.
The president is pushing Canada, Mexico and China to stop flows of migrants at the border — one of his major domestic policy issues — as well as to stem shipments of deadly drugs, and offer the United States better terms when it comes to trade relationships.
Mr. Trump made clear on Monday that he would use tariffs liberally to get other governments to give him what he wants, essentially saying he would leverage America’s economic strength to bully other nations.
“I don’t want to use names, but tariffs are very powerful, both economically and in getting everything else you want,” Mr. Trump said.
The president is right that the American economy is a powerful weapon, and that a trade war would hit other countries harder.
But many economists say the strategy will cost the United States too. They estimate that as strong as the American economy is, trade wars will weaken it by raising prices, stalling investment, slowing growth and dragging down exports.
President Trump has correctly pointed out that trade wars will be more painful for Canada and Mexico, saying, “They will be punished,” and describing Canada and Mexico as “in many ways enemies.”
Wendy Cutler, a former U.S. trade negotiator, said: “There is no doubt that our partners will be more severely impacted than the United States, with over three-fourths of their exports destined for our market.”
Researchers at the Peterson Institute for International Economics estimate that a 25% tariff on Canada and Mexico and a 10% tariff on China would hit other countries hardest, but also slow the US economy.
Some experts have hinted that Mr. Trump’s goal may be shifting blame for domestic problems to foreign countries.
His tactics have many on edge.
Some have stated that Mr. Trump’s goals are more to do with gaining support from a domestic audience.
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