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Climate Change

Published on September 26th, 2018 | by George Harvey

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Trump’s Trade War – Headed for Catastrophe

September 26th, 2018 by  


The European Union has announced it will set up a new international market, independent of the United States or the US dollar.

When I wrote “Trump Is Already Losing The Trade War,” last March, I did not envision things going quite this badly for him quite this fast. Here it is just six months later, and I think it is possible to predict that Trump’s America can only suffer increasing losses as the catastrophe goes on.

Trump started a trade war with China over solar panels. He did this despite the fact that the trade dispute with China over photovoltaics (PV) had been settled quite a while before. The war, however, was not about fair trade, it was about competence; the Chinese were competing too successfully.

The problems with Trump’s trade war became increasingly clear in the months that followed. World leaders had already come to regard him as untrustworthy when he declared that the United States would withdraw from the Paris Climate Accord. No one followed on his errant path.

This took the US from its position of leadership and making it instead an outlier nation, going its own way for its own supposed benefit, without regard for anyone else. Having already put his country into the status of a rogue nation on climate, Trump reinforced his place in the world with his trade war.

Trump, who seems to fancy himself as a “stable genius” (oxymoron?), followed his declaration of war by slapping tariffs not only on China, his declared enemy, but on just about everyone else important in the solar PV business. As the tariffs were extended to other goods, they were applied not only to those countries that might lean toward supporting China, but those who had been willing to support Trump’s cause. Canada, for example, was an ally, but that did not stop Trump from slapping tariffs on Canadian goods, as well.

After antagonizing all of our trading partners, Trump took the next step in his America First agenda by withdrawing from the Iran Nuclear Deal. This deal had been very painfully negotiated by all parties. Trump wanted something better, and so without regard to what it would do to America’s reputation as a nation that keeps its word, he backed out and told everyone that the deal had to be renegotiated.

By doing this, he actually forced all nations that had taken a part in the issue to review their positions on his trade war also. Either you supported Trump’s position on Iran, which was to say you sided with a person who had already shown himself to be utterly unreliable and selfish, or you opposed that position. There really was no other side available; Trump had made that clear. Anyone who honored the agreement would suffer his wrath.

Iran has a number of important trading partners. The biggest share of its trade is with China. This is very convenient for both countries, because they were already being treated like declared enemies of Trump. He cannot hope to sanction either for trade with the other. The second biggest is the European Union (EU). And it is with the EU that things get difficult for Trump.

According to the BBC article, “Iran nuclear deal: Plan put forward to dodge US sanctions,” the EU has let it be known that it intends to set up a new trading system, in a market not in any way under American control and free of any tie to the dollar, so it can trade freely with Iran.

This is a disaster for Trump’s trade war. Since Trump had threatened sanctions to anyone who honored the agreement, and they have done it, it means that the EU is on Iran’s side on the nuclear deal. By openly announcing this, the EU has made plain their regard for Trump’s wrath. That, of course, means they are willing to accept sanctions from Trump. And also puts the EU, almost unquestionably, on China’s side in Trump’s trade war.

Worst of all is the damage all this does to the United States. This announcement means that the US no longer has the grip on the world market that it has had for decades. It is a horrible economic blow.

The strategy of a trade war is to isolate the enemy, so other nations do not support it. What Trump has done has been to isolate the United States, so it has just about no allies at all. And by isolating the United States, Trump has set it up perfectly to lose. Donald Trump has declared a war and then done everything within his ability to manage it for the benefit of his enemy.

So I put it to you. Is Trump a dolt? Or is he insane? Or is he, for some reason, a traitor? I am not sure what other explanation there is.


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About the Author

A retired computer engineer, George Harvey researches and writes on energy and climate change, maintains a daily blog (geoharvey.com), and has a weekly hour-long TV show, Energy Week with George Harvey and Tom Finnell. In addition to those found at CleanTechnica, many of his articles can be found at greenenergytimes.org.



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