'Blowing up the world trading system': Conservative WSJ editors turn on Trump

President Donald Trump's new, sweeping regime of tariffs on imported goods from essentially the entire world is meant to build up American manufacturing, but the president will swiftly discover that it will have the opposite effect, warned the conservative Wall Street Journal editorial board on Thursday — the latest in a long line of criticisms the board has written about Trump's trade policy.

The move toward "blowing up the world trading system," coming as Trump also seeks to dismantle much of the federal government, including institutions that boost manufacturing, will have several consequences, the board argued — none of them good.

The first of these consequences is the potential immediate damage to the U.S. economy, wrote the board.

"The overall economic impact of Mr. Trump’s tariff barrage is unknowable — not least because we don’t know how countries will react. If countries try to negotiate with the U.S. to reduce tariffs, the damage could be milder. But if the response is widespread retaliation, the result could be shrinking world trade and slower growth, recession, or worse."

The taxes will be paid by U.S. workers and gradually erode our competitiveness, the board warned.

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But it goes further than that, the board argued — the tariffs will actually set back some of Trump's greatest policy goals.

For one, he wants to boost American exports, but they are likely to be reduced.

"U.S. exports will suffer directly from retaliatory tariffs. And they will suffer indirectly as other countries strike trade deals that give preferential treatment to non-U.S. firms. Think of Brazil’s soybean bonanza after Mr. Trump’s China tariffs in his first term."

Meanwhile, U.S. economic leadership on the world stage will collapse, the board warned.

"In the worst case, the world trading system could devolve into beggar-thy-neighbor policies as in the 1930s."

And China, targeted hardest by tariffs, could actually gain influence, the board said.

"in his first term Mr. Trump abandoned the Asia-Pacific trade deal that excluded China. Beijing has since struck its own deal with many of those countries."

China has already made inroads with normally adversarial Japan and South Korea, and could make deals with Europe too.

A less obvious effect, the board wrote, could be greater corruption in Washington.

"Mr. Trump is saying there will be no tariff exemptions. But watch that promise vanish as politicians, including Mr. Trump, see exemptions as a way to leverage campaign contributions from business. Liberation Day is Buy Another Yacht Day for the swamp."

"This is far from a comprehensive list, but we offer them as food for thought as Mr. Trump builds his new protectionist world," the board concluded. "Remaking the world economy has large consequences, and they may not all add up to what Mr. Trump advertises as a new 'golden age.'"