Trade wars: What are they good for? Absolutely nothing

WE'VE known all along that Donald Trump is belligerently ignorant about economics (and many other things). But up to this point, that hasn't mattered much. He took office amid a sustained recovery that began under his predecessor, and that recovery had already lifted the US economy to the point where "normal" policy rules apply: interest rates are above zero, monetary policy is effective again, so short-term economic management is in the fairly reliable hands of the Federal Reserve, not the chaotic Trump White House. What the president didn't know couldn't hurt us.

But there was always reason to be concerned about the possibility of crisis - either a crisis created by outside forces, like some kind of financial collapse, or one created by the administration itself. In that case, the Fed's rationality wouldn't be enough. And it's starting to look like we have a trade policy crisis on our hands.

Mr Trump has always had a thing for trade, which he sees the way he sees everything: as a test of power and masculinity. It's all about who sells more: if we run a trade surplus, we win, if we run a trade deficit, we lose. "When a country (USA) is losing many billions of dollars on trade with virtually every country it does business with, trade wars are good, and easy to win. Example, when we are down US$100 billion with a certain country and they get cute, don't trade anymore - we win big. It's easy!" Mr Trump wrote on Twitter.