The problem with winning a race to the bottom is that you end up at the bottom.
President Donald Trump’s idiotically conceived and incompetently executed trade war with China shows no signs of abating — the president himself said this week that he’d be happy to see negotiations drag on throughout the coming year — and now Trump has decided to expand the theater to Brazil and Argentina.
Trump says he is imposing tariffs on steel and aluminum from Brazil and Argentina because those two countries have engaged in a policy of competitive currency devaluation, i.e., they have artificially driven down the value of the real and the peso, respectively, in order to gain an unfair advantage for their exports. Trump charges that this has hurt U.S. farmers and says he is imposing these sanctions on their behalf. The Commerce Department, Treasury, the U.S. Trade Representative, and the governments of Brazil and Argentina learned about this on Twitter in the wee hours, because that is how the Trump administration makes policy.
Like a great deal of what comes out of this White House, the new tariffs and the rationale undergirding them exhibit a very fine blend of dishonesty and stupidity.
It is true that the real and the peso have declined in value of late. But this is not programmatic devaluation; rather, both Brazil and Argentina are in the midst of severe self-imposed crises in their national economies (when are these South American giants not in the midst or on the verge of economic crises?) caused by excessive public debt and misgovernment, afflictions with which the United States is increasingly familiar but as yet resistant to, owing to the sheer size and dynamism of our economy. When a nation’s finances tank, its currency tends to fall in value as investors scurry off rodentially from the keeling schooner that is the ailing nation’s economy.
Full Commentary by Kevin Williamson @ National Review https://www.nationalreview.com/2019/12/trump-trade-war-hurting-americans/?utm_campaign=FEE%20Daily&utm_source=hs_email&utm_medium=email&utm_content=80315687&_hsenc=p2ANqtz-9MJJvtm47ORFHa4pfUhsooaF8D0Zf24LnCw3BTHatYxLD7dLxg5JkC-I0B0klu5Xr_NpqDao2-4-JrSoadOcfPW880pA&_hsmi=80315687