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Jon Talton: The long view of the US-China trade war looks dark

Jon Talton, The Seattle Times on

Published in Business News

Among the many things lost by the media's obsession with Hillary Clinton's emails during the 2016 presidential campaign was Donald Trump's promise to impose tariffs of 45% on imports from China.

Clinton was widely expected to win -- indeed, she pulled in a popular vote victory of 3 million votes. But in the Electoral College, which matters most, about 80,000 voters in three states set our course with a Trump presidency.

And from nearly the start, it has been defined by trade tensions with Beijing. They intensified this month with the administration raising tariffs to 25% on $200 billion in Chinese goods, and China retaliating with counter-duties on $60 billion in U.S. imports.

Beyond daily market swings and posturing by each side, the more important questions surround the long arc that this presidency has set us upon.

Yes, even if a Democrat wins in 2020, the candidates and party leaders have been faint in their criticism of Trump trade policy or even supportive (even though most average Democrats back trade agreements and oppose these tariffs).

Restoring the American-led rules-based world order -- of which freer trade was a pillar -- may not be so easy. Encouraging the peaceful rise of China and nudging it into this order as an equal member -- U.S. policy from the 1970s until 2017 -- may not be possible now.

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Dean Acheson, secretary of state in the Truman administration and moving force behind the establishment of that system after World War II, titled his Pulitzer-winning memoir, "Present at the Creation."

We are present at the destruction.

Chad Brown and Eva Zhang of the Peterson Institute for International Economics warned that Trump's trade war is headed toward levels of the Smoot-Hawley tariff.

That was the infamous trade law of 1930 which historians and economists widely blame for helping turn an economic contraction into the Great Depression.

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