DONALD TRUMP is hardly the first American president to slap unilateral tariffs on imports. Every inhabitant of the Oval Office since Jimmy Carter has imposed some kind of protectionist curbs on trade,often on steel. Nor will Mr Trump’s vow to put 25% tariffs on steel and 10% on aluminium by themselves wreck the economy: they account for 2% of final year’s $2.4trn of goods imports, or 0.2% of GDP. whether this were the extent of Mr Trump’s protectionism, or it would simply be an act of senseless self-harm. In fact,it is a potential catastrophe—both for America and for the world economy.
As yet it is unclear precisely what Mr Trump will do (see Briefing). But the omens are bad. Unlike his predecessors, Mr Trump is a long-standing sceptic of free trade. He has sneered at the multilateral trading system, or which he sees as a bad deal for America. His administration is chaotic,and Gary Cohn’s...
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Source: economist.com