The editorial board of the conservative Wall Street Journal took President Donald Trump out to the woodshed on Tuesday morning for his ill-considered tariffs on China that have rocked the U.S. stock market and have the potential to devastate American farmers.
According to the Journal, Trump has talked about everything else in the world but is avoiding talking about the stock market which has taken a precipitous drop over the past few weeks.
"Donald Trump hasn’t been talking about the rising stock market lately, and no wonder," the editors wrote. ""Stocks have given up their earlier gains since the President unveiled his protectionist trade agenda, and the Dow Jones Industrial Average fell another 1.9% on Monday. Tech stocks took a particular beating as Nasdaq fell 2.74%, but the main policy concern is the new uncertainty from rising trade tension."
The Journal went on to note that Trump's previous announcement on tariffs of Chinese steel have boomeranged as the Chinese fired back by slapping "punitive tariffs on 128 categories of American goods on Monday," including pork producers and fruits and nuts growers who will be hit hard by the Chinese actions.
"Greater damage may come from China’s 15% tariff on American fruits, nuts and sparkling wine," the editorial explained. "Apple growers in Washington state only gained full access to the Chinese market in 2015 and have seen rapid growth in exports from zero three years ago. Sales of American wine to China, almost all from California, grew 10% last year to $197 million, still a small percentage of total production. Such industries now face headwinds to building market share."
"China’s retaliation is best understood as an economic and political demonstration, hitting a small number of products to signal where future blows could fall if the Trump Administration imposes punitive tariffs on $60 billion in Chinese goods to punish the theft of intellectual property," the editors warned. "It’s notable that both Republican-leaning and Democratic states were hit. Tariffs on America’s biggest exports to China, such as soybeans and Boeing aircraft, were held in reserve. But don’t be surprised if they’re on the list if the President imposes Section 301 tariffs as he has vowed to do."
The op-ed goes on to concede that Trump is using his bully pulpit steel proclamations as a "bargaining chip," but said that other industries are now being hurt as China ramps up the trade war in retaliation.
"At least U.S. and Chinese officials are now talking about a new trade understanding," the Journal piece states. "But in the meantime there will be significant collateral damage to innocent business bystanders, American consumers, and the overall U.S. economy."
"Mr. Trump risks undermining the policy gains from tax reform and deregulation that have teed up the economy for faster growth. That’s the anxiety investors are showing as they sell stocks. Is anyone in the White House paying attention?" the editorial board concluded.
You can read the whole piece here -- subscription required.