President Trump’s mindless tariffs will cause economic havoc

IF YOU failed to spot America being “looted, pillaged, raped and plundered by nations near and far” or it being cruelly denied a “turn to prosper”, then congratulations: you have a firmer grip on reality than the president of the United States. It’s hard to know which is more unsettling: that the leader of the free world could spout complete drivel about its most successful and admired economy. Or the fact that on April 2, spurred on by his delusions, Donald Trump announced the biggest break in America’s trade policy in over a century – and committed the most profound, harmful and unnecessary economic error in the modern era.

Speaking in the Rose Garden of the White House, the president announced new “reciprocal” tariffs on almost all America’s trading partners. There will be levies of 34 per cent on China, 27 per cent on India, 24 per cent on Japan and 20 per cent on the European Union. Many small economies face swingeing rates; all targets face a tariff of at least 10 per cent. Including existing duties, the total levy on China will now be 65 per cent. Canada and Mexico were spared additional tariffs, and the new levies will not be added to industry-specific measures, such as a 25 per cent tariff on cars, or a promised tariff on semiconductors. But America’s overall tariff rate will soar above its Depression-era level back to the 19th century.

Trump called it one of the most important days in American history. He is almost right. His “Liberation Day” heralds America’s total abandonment of the world trading order and embrace of protectionism. The question for countries reeling from the president’s mindless vandalism is how to limit the damage.