Trade war with China threatens U.S. economy

What happened

The tariff war between the U.S. and China intensified this week as both sides dug in amid rising fears of a global recession. The Trump administration’s levies on Chinese imports hit a staggering 145 percent, and China countered with levies of 125 percent on U.S. goods. After saying repeatedly there would be no carve-outs, the administration announced an exception for electronic goods including smartphones, laptop computers, and modems, which face only 20 percent tariffs. But Commerce Secretary Howard Lutnick then said additional tariffs on electronics would be announced “in a month or two.” President Trump signaled he would also impose new tariffs on semi-conductors and other technologies; he has already imposed stricter limits on the transfer of AI technology to China. The dollar hit a three-year low—dropping 9 percent since January—as investors shed U.S. assets, and U.S. business owners who rely on trade with China were left reeling. “I’m terrified for my business,” said Beth Benike of Busy Baby, a Minnesota company whose products are manufactured in China. “I could lose my home.”

China directed its airlines to halt deliveries of jets ordered from Boeing, the U.S.’s largest exporter, and it suspended exports of the rare-earth minerals and magnets that are critical for manufacturing everything from cars and planes to drones and weapons systems. In a statement read by White House press secretary Karoline Leavitt, Trump said “the ball is in China’s court” to “make a deal,” but there was no sign China was ready to even initiate talks. America’s tariffs “will backfire,” said senior Chinese official Xia Baolong. “Peasants in the U.S.,” he said, will “wail in front of the 5,000 years of Chinese civilization.”

What the editorials said

If you’re flummoxed by Trump’s tariff policy, “don’t worry,” said the Washington Examiner. “You are not alone.” The president and his team have flip-flopped continually while offering a dizzying range of rationales for the levies and sending mixed signals about future moves. The maybe-temporary turnabout on electronics is just the latest example. To steer Americans through such a trade shift would require a steady hand and clear communication of what’s being done and how it will work. But so far “the only constant” has been “chaos.”

These “monster” tariffs on China are inflicting pain, “yet it’s not Trump’s billionaire chums who are suffering the most,” said the New York Post. It’s ordinary folks, who “make up the backbone of the country and his base.” Mom-and-pop shops that rely on Chinese imports face ruin as they find “their business models unworkable in an instant,” and blue-collar voters will suffer worst from price spikes. If Trump “doesn’t wake up fast to the growing angst,” the fallout will be “deep and lasting.”

What the columnists said

The tariffs’ impact will hit the entire economy, said Dave Lawler in Axios. “The vast majority of the toys, cellphones, and many other products” we buy come from China, and price jumps loom on everything from “fast fashion to gaming consoles.” Chinese President Xi Jinping has no end of ways to inflict damage beyond levying his own tariffs, including export controls, blacklisting individual firms, and the “nuclear option” of selling off China’s vast holdings of U.S. bonds.

And all this for what? We should be “the last country on Earth” to throw a bomb into the world economy, said Rich Lowry in National Review. Despite Trump’s claims we’ve been “ripped off,” America “has thrived in recent decades, while other advanced democracies have fallen behind.” Since 2020 we’ve grown at three times the rate of other G-7 nations, and “our labor productivity has skyrocketed.” It’s insanity “to change the rules in the middle of the game” when you’re many points ahead.

“I’ve never been more afraid for America’s future in my life,” said Thomas L. Friedman in The New York Times. Trump has launched an irrational trade war with no allies, “no serious preparation,” and no understanding of the modern global economy, a “complex ecosystem” where an American-made product can contain Chinese and Mexican parts. This “cruel farce” is “triggering a serious loss of global confidence in America,” with profound implications that will touch every one of us. The rest of the world “is now seeing Trump’s America for exactly what it is becoming: a rogue state led by an impulsive strongman.”