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Will Trump Start a Trade War?

July 11, 2017 | post a comment | Philip Johnson

On Monday, The New York Times uncovered the first clear evidence that top Trump campaign officials knowingly colluded with an agent of the Russian government to defeat Hillary Clinton. The Times reported that Donald Trump Jr., aware of the Russian effort to aid his father’s campaign, arranged a meeting in which Kremlin-connected Russian lawyer Natalia Veselnitskaya promised to dish dirt on Clinton. Donald Trump’s presidency has never been so imperiled. How will he react?

Watch his decision on steel.

Any day now, the Trump administration is due to announce the result of a Commerce Department investigation into whether steel imports threaten national security. If the answer is yes, the White House may impose a tariff of as much as 20 percent on foreign steel. European Union officials say they will respond by taking the U.S. to the World Trade Organization, which would likely authorize the EU to retaliate. Thus, The New York Times predicts, the tariff  “could very well provoke a global trade war.” The Times even speculates that if the WTO rules against it, the Trump administration might pull the U.S. out of the organization, thus destabilizing the economic architecture of the post-war world.

In other words, a major distraction.

Trump’s fondness for dangling shiny objects in front of the press to distract them from unpleasant storylines is well-known. And there are other reasons the intensifying Russia scandal increases the chances of a trade war. Trump Jr.’s reported arrangement of the meeting with Veselnitskaya has received most of the early attention. But Jared Kushner was reportedly present too. As Joshua Green has noted in New York magazine, Kushner had already lost influence with Trump as the result of prior revelations that he met with Russians during the campaign, and because Trump was annoyed by the Kushner family’s efforts to use their White House ties to drum up business in China. Now Kushner’s influence may suffer even more.

The beneficiary is his chief rival, Steve Bannon, who remains untouched by the Russia scandal. Bannon, writes Green, is “the man” Trump “turns to when everything’s going to hell.” The more besieged Trump becomes, the more he appreciates Bannon’s willingness to attack no matter what. After the Access Hollywood tape in which Trump admits to groping women came out last fall, while Reince Priebus was urging Trump to drop out, Bannon advised him to call Hillary Clinton an accessory to rape. In May, Trump put Bannon in charge of combatting the Russia investigation.

Bannon also speaks for Trump’s anti-globalist base, the constituency he cannot lose if he wants to stave off impeachment. Just as Bill Clinton grew more dependent on African-American political support during the impeachment fight, Trump will grow more dependent on the Breitbart crowd as his presidency grows more imperiled.

Trump’s base would cheer a steel tariff. Bannon is reportedly pushing for it. Kushner is reportedly opposed. The tariff would likely hit China, thus undermining the chances of Beijing helping the United States on North Korea. But in a tweet last week, Trump signaled that he had already given up on Chinese help.

The Times’ revelation has caught even Trump’s most slavish defenders off guard. The White House needs to start a new conversation, preferably one that pits Trump against the global elite. A global trade war might just do the trick.

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