It is increasingly clear that the world is no longer persuaded by America’s approach to economic policy. Other nations are not, for the most part, retaliating against the administration’s policies by imposing higher tariffs on American goods. But they also are not imposing higher tariffs on goods imported from countries other than the United States. The rest of the world is rejecting protectionism.
In reality, the United States is walking out of the system it created. While other nations regret its departure, they are not inclined to follow in its self-destructive footsteps. Fears of a global trade war have not materialized because the leaders of other nations have recognized that by raising tariffs, they would be hurting their own countries.
The World Trade Organization reported last month that “a broader cycle of tit-for-tat retaliation that could be very damaging to global trade has so far been avoided.”
Higher tariffs are supposed to protect US manufacturers from unfair foreign competition, leading American consumers to buy more goods produced in American factories, which in turn would expand domestic employment.
But the number of Americans with factory jobs has declined by 28,000. Companies are canceling or delaying their expansion plans. Spending on factory construction has declined.
And a federal appeals court ruled in August that many of the new tariffs are illegal. This will be sent to the Supreme Court.
.
Many of the products “Made in America” include a significant share of parts and materials made in other countries.
Tariffs have been applied indiscriminately. The average effective tariff rate for the United States has soared to 18.6 percent from 2.5 percent. The new level is far higher than in any other developed nation.
Countries are not raising tariffs on other trading partners. The European Union, to take just one example, has not only refrained from significant retaliation against the United States. It also has not emulated Mr. Trump by imposing tariffs on low-income Asian nations in an attempt to bolster the prospects of European manufacturers.
Brazil’s president, Luiz Inácio Lula da Silva, said “If the United States doesn’t want to buy, we will find new partners,” he said. “The world is big, and it’s eager to do business with Brazil.”
Other nations continue to pursue trade established by the United States decades ago because they continue to see trade, managed judiciously, as a path to greater prosperity.
Source nytimes.com.
