Trump is risking the long-term health of the American economy to keep waging his unnecessary trade war with China.
Trump's reckless trade war is on track to cost America tens of billions of dollars this year and more than $1 trillion over the next 10 years, according to a new study.
The study, published Friday by the U.S. Chamber of Commerce and the Rhodium Group, shows the staggering economic consequences of Trump's decision to provoke a trade war with China. Over the past year, both countries have placed tariffs on various goods and commodities imported from the other country, which has had harmful ripple effects across the entire economy.
If Trump continues down this path, the annual cost to U.S. GDP could be up to $60 billion in the first year and $125 billion in the fifth year — and a total of $1 trillion over 10 years.
It's hard to imagine numbers that big. But to put it in perspective, $1 trillion over ten years would be more than enough to eliminate child poverty in America.
The New York Times notes that the escalating trade war is hurting one of the industries Trump was most trying to protect: the information technology sector. He was hoping to win concessions from China over the way the country treats these businesses, but instead, his trade war is already making the industry less competitive.
Trump's trade war has hurt a number of other sectors, as well. General Motors said the trade wars have cost the company about $1 billion, and it has closed several of its North American plants. Farmers across the country are having a hard time exporting their goods, and bankruptcies are skyrocketing. The Republican governor of South Dakota said Trump's trade wars have devastated her state.
The cost to ordinary Americans is high, too. American families and businesses are basically paying an additional $3 billion in taxes every month because of the higher cost of goods coming from countries like China.
And Americans could lose even more. One report says Trump's policies could force more than 2 million Americans out of their jobs.
It's clear that Trump doesn't understand the first thing about how international trade works, or why his meddling is so destructive.
When a reporter asked Janet Yellen, the former chair of the Federal Reserve, if she thinks Trump even understands basic economic concepts, she said, "No, I do not." She said Trump's comments about trade in particular proved that he doesn't understand "appropriate policy goals."
Yet Trump continues to bluster his way forward, leaving a trail of bankrupt farmers and devastated states in his wake. And if he doesn't find a way to fix it, the trade war could be a massive, $1 trillion mistake.
Published with permission of The American Independent Foundation.