The Guardian view on Trump’s tariffs: more smoke than fire | Editorial
Trade is not a zero-sum game: all should benefit from engaging in it. But the world that exists has not been designed this way
Donald Trump's decision to slap tariffs on steel and aluminium imports was intended to cause quite a stir, and it has. There have been warnings of a 1930s-style trade war from the head of the World Trade Organization, Roberto Azevedo. There have been threats from the European Union that it will retaliate and has US peanut butter and Levi jeans (among other things) in its sights. And it has cost Mr Trump his chief economic adviser, the former Goldman Sachs executive Gary Cohn, who resigned from the White House in protest.
Although he says that trade wars are good and easy to win, Mr Trump is taking bigger risks than he appears to think. If tariffs lead to higher prices for US consumers, the result may be higher inflation and sharper increases in interest rates from the Federal Reserve, America's central bank. What's more, the tariff announcement comes at a time when federal tax cuts are set to boost demand in an economy already operating at close to full employment. As imports rise and the US trade deficit widens, Mr Trump will be tempted into further protectionist measures.
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