In the past, when American presidents have imposed tariffs, it has been done for narrow and well-defined purposes. American and Chinese commentators alike have noted that Trump’s tariffs are different; they don’t come with a clear wish list, and no one knows exactly what they are intended to accomplish. What does Trump want?
When he took office, I was fairly certain that his objective was 80’s style managed trade in the interests of reducing the deficit, which is, of course, a weird obsession of his. Today, I’m not so sure. I think he has two other purposes:
- To force the Chinese to openly acknowledge his supreme power over them and the rest of the world; and
- What amounts to regime change–China must evolve into a genuine market economy and stop challenging American economic and military superiority.
What is the likelihood of this happening? As to #1, the Chinese are probably willing to make cosmetic concessions to the barbarian–they have been doing that for thousands of years–but nothing more than that. As to #2, forget it; the regime isn’t going to commit suicide just to maintain access to the American market.
And so, unless Trump changes course and makes a fairly meaningless deal in the interests of chalking up an ego-driven “win,” which is a reasonable possibility, the trade war will go on indefinitely.