It's China. It's Canada. It's Europe. Everybody's in a trade war with the United States.
What's a journalist to do? How to explain it to your community? I asked Steve LeVine, a former foreign correspondent who writes the Axios Future newsletter, He's also a senior fellow at the Atlantic Council and author most recently of The Powerhouse: America, China and the Great Battery War.
Q. Whoa, Steve, all of a sudden we're in a gigantic trade war. Or trade wars. Not sexy, but important. How do you translate these disputes for a general reader?
LeVine: This brinksmanship has been unusually easy to write in a way that I think is getting traction with readers. This is because the stakes are unusually high — Trump basically threatening to bring down the core of the global economy — and the issues more concrete than the typical arcanities of trade: we aren't talking car tires or specialty steel but whole economic systems, IP theft, and the Big Tech future.
Q. Let's say I'm a local reporter. How are the disputes with Canada, with Europe and with China going to affect me?
LeVine: Your readers could pay substantially more for their ordinary shopping and, depending how long this goes on, their ordinary purchases. People could lose jobs in layoffs should the trade war go on a long time. And ultimately, we could be talking recession.
Q. You mentioned the 1930s in one article. Why? What trade lessons should we have learned from then?
LeVine: We forget but the 1930s were a time when most of Europe was non-democratic, nationalist and populist states, with over-the-top xenophobia, racism and resentment that ultimately led to World War II.
Q. Is this the widest-scale worldwide trade war we have been in since then? Could it get worse if there's a break with the WTO?
LeVine: Definitely the biggest trade war since Smoot-Hawley (the 1930 bill that raised U.S. tariffs, and contributed to The Great Depression). And yes, Trump's threat to withdraw from the World Trade Organization, or to repudiate its main tenets, would make this much, much worse. Moderate economic voices forecast a seriously bad reaction in markets and the Fortune 500 — a cratering of stock markets and a significant slowdown in plant investment and hiring, which could lead to recession.
Q. How are we starting to feel the tariffs now — and when will they really hit?
LeVine: It's pretty light right now in the opening rounds. So we are only seeing it in the gyrating stock market. It's the coming rounds of tit-for-tat when the bigger forces will strike.
Q. What's the point, or the rationale, for Trump's move?
LeVine: Trump has long been convinced that trade deals are inherently bad, or at least the way they were negotiated before he was president. He thinks that international deals inherently disadvantage the U.S. Therefore, he feels they must be re-negotiated or repudiated. Economists, by the way, agree that all the deals are due for an updating.
Q. If you follow Trump, you say all these countries deserved a war for what they're doing to us. Are there any economists who say such a massive trade war is a good idea — or will strengthen America?
LeVine: No mainstream economist who I know of says this.
Q. Steve, thanks for your time, and thanks for your newsletter.
LeVine: It's a pleasure, Dave.
(Note: I'm compiling a list of smart local takes on the trade war, but I need your help. Send me links to such stories to firstname.lastname@example.org and I'll include a few in my morning media roundup in coming days, and perhaps as a separate article as well. Here's how to get that weekday roundup in your inbox. Thanks!)