Back to the Future. Trump’s Trade War – Paul Krugman. 

Donald Trump got within striking distance of the White House — or, more precisely, Comey-and-Putin range — thanks to overwhelming support from white working-class voters. These voters trusted his promise to bring back good manufacturing jobs while disbelieving his much more credible promise to take away their health care. They have a rude shock coming.

The only two causes about which Mr. Trump seems truly passionate are supposedly unfair trade deals and admiration for authoritarian regimes. It’s naïve to assume that he’ll let his signature policy issue slide.

You might imagine that a drastic change in U.S. trade policy would require congressional approval, and that Republicans — who claim to believe in free markets — would put on the brakes. But given G.O.P. spinelessness, that’s unlikely.

Why would a Trump administration impose restrictions on imports? One answer is those working-class voters, whose supposed champion is set to pursue a radically antiworker domestic agenda. There’s an obvious incentive for Mr. Trump to make a big show of doing something to fulfill campaign promises. And if this creates international conflict, that’s actually a plus when it comes to diverting attention from collapsing health care and so on.

It’s clear that the incoming commander-in-chief really believes that international trade is a game in which nice guys finish last, and that America has been taken advantage of.

The image of a predatory China, running huge surpluses by keeping its currency undervalued,  is years out of date.

There will be retaliation, big time. When it comes to trade, America is not that much of a superpower — China is also a huge player, and the European Union is bigger still. They will respond in kind, targeting vulnerable U.S. sectors like aircraft and agriculture.

Paul Krugman


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