Free Trade

Will 'Winning' the Trade War Be Worth the Loss of More Than 300,000 Jobs?

A new analysis from Moody's says 300,000 jobs have been lost already, with another 600,000 hanging in the balance. Meanwhile, Trump is trying to reopen channels with China.

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More than 300,000 American jobs have been lost as a result of President Donald Trump's trade war with China, and another 600,000 could be destroyed if the conflict drags on for another year.

That's the assessment of Moody's Analytics, a financial forecasting firm, and it fits with other recent analyses showing that the trade war is costing jobs and dragging down economic growth. The Moody's report, released Wednesday, compares current employment levels to estimated levels if the tariffs did not exist—capturing not just jobs lost as a direct result of the tit-for-tat tariffs imposed by the U.S. and China since July 2018, but also jobs that were never created in the first place. Moody's also says the trade war has decreased the size of the U.S. economy by about 0.3 percent.

Trump and Chinese President Xi Jinping "have embarked on a dangerous game of economic chicken," write Moody's economists Mark Zandi, Jesse Rogers, and Maria Cosma in the report.

The latest escalations are particularly worrisome. Washington applied tariffs—which are taxes paid by U.S. businesses and consumers—to about $125 billion of Chinese imports on September 1. Another round of tariffs on about $175 billion worth of imports are set to take effect on December 15, after the holiday shipping season.

On Tuesday, both sides may have flinched a little. Trump announced that he was postponing plans to hike existing tariffs on about $250 billion worth of Chinese goods. That increase, from 25 percent to 30 percent, was supposed to happen on October 1 but will be delayed until October 15.

China, meanwhile, said it would exempt a handful of American-made goods from newtrade barriers set to take effect on September 17, including tariffs on shrimp and industrial lubricants. Both maneuvers are positive signs ahead of planned trade talks between U.S. and Chinese officials next month.

But it seems like we've seen this movie before. Trump ramps up tariffs in order to bring China to the table. The Chinese say they want to negotiate. Trump postpones planned tariff increases to create a little oxygen for negotiations. That's exactly what happened last summer, and again during the first half of 2019. On both occasions, the negotiations ended with Trump abruptly walking away from the table and escalating the trade war.

Yes, a successful negotiator knows you have to be willing to walk away. But fruitful negotiations also require both sides to have a modicum of trust in one another. Reports indicate that the year-and-a-half-long trade war has eroded that trust—in no small part because of Trump's erratic behavior.

If Wednesday's announcement was the beginning of a thaw and a step towards ending this destructive conflict, that's good. But the track record shows that Trump does not deserve the benefit of the doubt any longer. And the longer it takes the Trump administration to achieve a concrete deal with China (or to admit the tariffs aren't working and repeal them), the higher the price that Americans will pay.

"A game of chicken typically ends one of two ways: Either one party gives way, or both get hurt. At some point it becomes too late for anyone to duck out, and both sides are doomed to mutual destruction," the Moody's economists write. "At some point, a trade deal will not be enough to avert a global recession."

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  1. Is it worth it to combat China’s persistent IP theft and constant interference in our elections?

    Yeah, I think it is.

    1. +10000

    2. Eh, you shouldn’t be able to own ideas in the first place. And their interference in our elections hasn’t been terribly successful.

      1. What a fucking stupid idea. You own this idea. It is yours.

    3. How big of you to be making that decision for everyone.

    4. and constant interference in our elections

      China is the new Russia I see.

      1. China was ALWAYS what the Dems claimed Russia was. They are just dramatically more successful at it.

        Notice how Russia is nearly an epithet here while the far worse Chinese are not?

    5. Is this you volunteering to be one of the 300,000?

      1. Wait… you actually believe this model? The same model that predicted 100s of thousands of jobs from aca. You did read it was Moodys right?

        1. No. I was pointing out that damikesc, who is normally very offended by people dismissing the loss of “American jobs” (in immigration debates), is suddenly not so offended. The truth-value of the data on which he was relying was not really what I was commenting on.

  2. I’m not sure a trade war is worth it to gain 300,000 jobs if it meant I was paying more for my purchases. But then maybe I’m not much of a “take one for the team” type.

    1. Boehm has a habit of citing job losses that may or many not be caused by increased tariffs because they are fairly easy to count.

      Boehm and many other people refuse to count the millions of jobs that never are because of all trade restrictions in place pre-Trump.

      Sales tax, Social Security taxes, Medicare taxes, ObamaCare taxes, gas taxes, property taxes, utility taxes, liquor taxes, business license fees and liquor license fees, food taxes, federal and state income taxes, tariffs, and BUSINESS RULES AND REGULATIONS.

      I would pay someone to drive me around if I could pay them what that is worth. I refuse to pay someone $20+/hour (with pay and benefits) to drive me around.

      1. Boehm is an o sessile idiot. He squandered any credibility he ever had.

        1. ‘Obsessive’

  3. From 1816 until after World War II the USA was the most tariff protected nation on earth. It is a NeverTrumper myth that tariffs cost jobs. Real historical data say tariffs create jobs.

    Looking at the unemployment numbers I see net job gains. From whence do you get a job loss?

    1. If trade wars are good, every on of the 50 states in the USA should declare trade wars on every other state… And then county on county, city on city, and finally, SQRLSY One’s household should trade with NO ONE… Good jobs ONLY for residents of SQRLSY One’s household!!! No one else DESERVES to trade with me!!! I will do my own iron ore mining, smelting, tool manufacture, food growing, cloth weaving, home dentistry, you name it… It’s actually a straight-line ticket to utter poverty!!!

      1. The Commerce Clause doesn’t allow states to do that.

        1. +10

        2. And that’s a good thing! Now simply scale it up and enforce world-wide free (or at least free-er) trade, and that would also be a good thing! But the Trumptatorship is taking us in the exact opposite direction. And Congress doesn’t have the balls to do a darned thing about it, even through Congress has that power.

          1. Squirrely, you say the dumbest things. It’s best I don’t you, as it is likely I would strangle you in a fit of irritation over your vexatious behavior.

            1. That’s just because he thinks that because U.S. states are all part of America, that must mean that China is really just an extension of America, governed by the same laws, working towards the same goals as America, interested only in finding the most equitable deal in trade for everyone.

              For someone who doesn’t believe in the legitimacy of national borders, I could see how he would come to that conclusion. He’d be an idiot for doing so, but I can see how that idiotic idea occurred to him.

              1. If we treat everyone else as enemies, Trump style, proclaiming “America Number One” all the time, shall we be surprised that other nations treat us with less and less respect? Making enemies of everyone… Makes enemies of everyone! Trump wants to turn us into the Evil Empire, and you toadies are falling in line with it!

                1. We don’t treat everyone as enemies. We just aren’t going to The the world’s doormat anymore.

        3. That isn’t the point. The point is tariffs at any level do more harm than good.

          1. Broad generalized statements in economics make you look retarded. Estimate IP and corporate theft from china is estimated at 200 billion a year.

            1. Generalizing epiphenomena from localized generic unsubstantiated hypotheses is inversely proportional to the epistemological action potentials arising from the amygdala, as has been dictated by one’s Medusa Oblongata. Duh! Do not pass “go”; do not collect $100!

              AKA, everything is too sophisticated for anyone to understand it, except for sneering MEEE!!!

              1. No Squirrely, you are too stupid to understand anything. But then, you’re too stupid to understand that too.

          2. Really? If protectionism is *always* harmful, then why has China engaged in it ever since they got most favored nation status?

            Are you assuming that the Chinese just too stupid to understand economics? Or are you maybe missing the point of what China is attempting to accomplish with their tariffs and currency manipulation and IP theft?

            1. Politicians of other nations perform XYZ, so XYZ must be a long-term wise thing to do, so we should do the same.

              Lots of people smoke cigarettes; smoking cigarettes is GOOD, let’s smoke cigarettes!

              Lots of people commit suicide; suicide MUST be good for our long-term health!

              Do you see anything wrong with this logic?

            2. In case what I’m saying isn’t clear, let me add this:

              China does some heavy-handed state-sponsored meddling in its economy, which isn’t beneficial (not even to China) in the long run… Fiat-setting currency values for example, I believe, from time to time. And protectionism. So Trump responds with… Heavy-handed state-sponsored meddling in OUR economy, which isn’t beneficial for us in the long run!

              This is a classic case of cut-off-your-nose-to-spite-your-face! Don’t let the other guy out-do your nose-cutting? The way to win this game is to not play it!

        4. The Commerce Clause doesn’t allow states to do that.

          But now what if they were to declare a #StateEmergency?

    2. Fuck off, economically ignorant slaver. Tariffs are always bad and always immoral.

      1. Fuck off, Tulpa.

      2. I wish I was fucking stupid enough to speak in childish absolutes.

      3. Fuck off, economically ignorant slaver.

        Translation: “I read a book on basic economics once and that means that the issue is as simple as what I read in the book, and no other considerations come into play…ever. Because there couldn’t possibly be more to the issue than basic economics.”

  4. Hey Boehm, the DOW Jones is back up: 27,246.91 as of today at 1200.

    July 15, 2019 high of: 27,359.16

    MARKETS IMPLODING!

  5. Now do jobs lost to “free” trade with that most favored nation, China

  6. Don’t worry, all those job losses will be compensated for with higher prices on consumer goods and taxpayer bailouts of suffering industries.

    1. Please point to the inflationary signal. Theory is all well except when it contradicts reality.

  7. Now do jobs lost to “free” trade with that most favored nation, India please check the latest update all India recruitment update

    1. Huh. Nardz popped in with the exact same phrasing above. Funny that.

      1. I got picked by the bot!
        I’m so flattered

        1. Fuck off, tara!

  8. More than 300,000 American jobs have been lost as a result of President Donald Trump’s trade war with China,

    Let’s phrase this correctly, shall we?

    Moody’s hypothesizes that, were it not for Trump’s trade war, the economy may have added an additional 300,000 jobs to the million+ already added

    There.

    1. Ah, they’re using Washington DC math, where reducing a 3% spending increase to 2% is a “33% BUDGET CUT THAT WILL STARVE CHILDREN AND FORCE GRANDMA INTO THE STREETS!!!”

      1. Except they’re using in to claim that despite the economy doing well under Trump IT WOULD BE SO MUCH BETTER IF HE JUST FOLLOWED THE SAME STRATEGY WITH CHINA THAT OBAMA DID!!!

        Because if there’s one thing that was a hallmark of the Obama administration, it was great economic growth at less than 3% every single quarter.

  9. the holiday shipping season

    First I thought that was a typo. Then I realized that no, it is not.

  10. Will ‘Winning’ the Trade War Be Worth the Loss of More Than 300,000 Jobs?

    Short answer: Yes. We currently have 1.7MM job openings for those 900K people who will be out of jobs.

    1. Do they have to learn to code first?

      1. Nah….just pass the drug test and show up on time. They be taught whatever code they need. 🙂

  11. And Mr. Boehm….Readership still breathlessly awaits your alternative to tariffs that will change Red Chinese behavior: Serial lying, serial cheating and serial theft of American IP.

    If you don’t have the brains or stones to state your alternative to tariffs, then just come out and say so.

    1. Maybe there shouldn’t BE a coerced, collective response to Chinese misbehavior. Maybe individuals should decide for themselves what, if anything, they wish to do in order to implement their own moral principles, and not have that decision imposed upon them by the state.

      1. Sorry jeff….but there are times where enumerated powers of the government ‘Trump’ [pun intended] the individual. Guess what? The decision to use tariffs as a tool of foreign policy is one of them.

        If you are Ok with Red China’s serial lying, serial cheating and serial theft of American IP…just come out and state that.

        1. “..serial theft of American IP…”

          Did you see Chinese Corporations putting guns to American heads here, to perform this theft?

          If Being and-or Ford Motors releases their IP to China (or a Chinese corporation) as part of a swap to get Chinese labor and materials, then it is Ford’s IP and Boeing’s IP. Not yours, not Trump’s, and it shouldn’t belong to the USA collective hive either! If YOU want to provide a better deal than the Chinese Corporations, and provide 10,000 laborers for Ford, WITHOUT demanding IP rights, AND you can give Ford a better “value proposition”, by all means, please do! That’s the free market at work!

          1. Did you see Chinese Corporations putting guns to American heads here, to perform this theft?

            No, we saw the Chinese government bribing the American Vice President to let it happen. Are you really that fucking uninformed that you don’t know that China’s been paying off Democrats for years in order to get more favorable trade deals for themselves (at our expense)? It’s only been going on since Bill Clinton. Clinton even worked as an advocate for them (basically an unregistered foreign agent) when his wife was Secretary of State.

            China doesn’t hold a gun to U.S. companies’ heads…they pay American politicians bribes to do it for them.

            https://www.breitbart.com/politics/2016/06/23/trump-media-spar-clintons-china-cash/

            1. So they don’t play by the exact rules that we’d like them to play by. When you are 15 and your little brother is 5, when you play chess with him, you give up your rook or queen (handicap yourself a wee tad) to let him catch up with your chess skills… If you treasure long-term peace in the family, that is… If you want little brother to get along with you when you are 30 and he is 20, and so on. Or, when you play golf with a business partner, and he sucks at golf, you cut him a few breaks. It’s called “getting along with others”. Do YOU want a shooting war with China? It’s where we’re headed, if The Donald doesn’t stop, and Congress doesn’t take back the powers that belong to Congress!

              Sometimes we need to have the humility to acknowledge that we cannot control others… We can only control ourselves!
              https://en.wikipedia.org/wiki/Economy_of_China
              GDP per capita
              Increase $10,153 (nominal; 2019 est.)
              USA GDP per capita : 59,531.66 USD (2017)
              We are about 6 times as wealthy as they are!!! HOW MUCH MORE per-capita wealth do YOU want to have, compared to the Chinese, before you are willing to be a wee tad less greedy, nationalistic, and selfish? Maybe we should FIGHT a little less, and COOPERATE a wee tad more? And NOT try always to tell others what to do and not do? Be a little less Trump-ish, in other words? I think more cooperation and less competition would be in order here! Trump is flushing the world economy down the crapper, if there’s no stop to the trade wars!

              Really now… HOW MUCH more wealthy, per capita, are we going to have to be, before you’d consent to being more graceful, and not insisting that they play precisely by our rules?

  12. Team Blue: I’m totally on board with rearranging the domestic economy in order to combat the great moral evil of climate change, and if that means a few people are thrown out of work as a result, well, it’s just a few broken eggs

    Team Red: I’m totally on board with rearranging the domestic economy in order to combat the great moral evil of Chinese communism, and if that means a few people are thrown out of work as a result, well, it’s just a few broken eggs

    Team Liberty: The state shouldn’t be substituting its moral judgment for that of its citizens. If individuals wish to alter their choices in order to pursue some higher moral good, then that should be their choice and their choice alone, and not one that is forced upon them by the state.

  13. While I understand what Boehm is trying to do here, sometimes I just wish he would stick to the principles behind free trade instead of citing numbers which can be easily refuted by simply saying that economies are complex and many factors may be at work here.

    Valid arguments, for instance:
    Central planning doesn’t work any better for international markets than it does for national markets. Individuals trade, not countries. Taxation is theft, and tariffs are taxes.

    1. I just wish he would stick to the principles behind free trade instead of citing numbers which can be easily refuted by simply saying that economies are complex and many factors may be at work here.

      ^ This. He just winds up getting the Trumpalos all worked up to no purpose.

      1. Actually he just proved hes just fucking retarded with economics. And for some reason you are backing him.

        1. Who am I backing?

  14. The chinese are hurting way worse. They want this done so they can concentrate on HK. It would be hella funny if Trump’s “erratic” negotiating leads to democratic revolution in china.

    1. It will be most entertaining to read Boehm’s first post after the Hong Kong Human rights and Democracy Act passes Congress and is signed by Trump.

      If it does pass, that is. I submit that Trump is using that bill as a Damoclean Sword to keep the ChiComs from sending the tanks in to Hong Kong. If Xi acts up, it will give Orange Man the political cover he needs to nuke the Chinese economy.

      Boehm’s columns remind me of libertarians during the 1980s: they were less disturbed by Soviet repression and more concerned with reducing the US defense budget.

    2. Nothing to see here.

      “The Chinese are hurting way worse”

      Which makes my hurt so much better.

      “ Leads to democratic revolution in China”

      Any signs of that?

      1. Any signs of that?

        You mean besides what’s going on in Hong Kong right now?

        1. Other than the people protesting in Hong Kong and begging for support from the Trump admin?

          Getting nothing.

          Nah.

  15. Is Eric Boehm working for Team China? Whiny Democrats and their main stream communist media are undermining negotiations by not supporting Trump, giving the enemy aid and comfort. This is war, with every president before Trump giving in to China, Russia, Iran, and North Korea.

    1. Boehm is working for Reason Magazine, which is owned by a foundation controlled by Charles Koch, who very much wanted the status quo of one-sided protectionist trade with China preserved to support his own interests.

      Kind of funny how both Reason and Cato, both controlled by the same organizations, both suddenly veered away from libertarianism to start spouting “Orange Man Bad” screeds right at the same time. Almost as if their idea of libertarianism is “Whatever angle Charles Koch wants us to cover”.

  16. Boehm might be a useful idiot for the Chinese Communist Party, helping them defeat capitalism with, uh, capitalism.

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