May 14, 2019 - Economy

America is suffering for its trade war

Illustration of a World War II soldier playing taps to an American flag shipping container

Illustration: Sarah Grillo/Axios

Reports show China's intellectual property theft costs U.S. companies hundreds of billions of dollars a year, and Chinese businesses have clearly benefited from a government-manipulated currency, goods dumping and non-tariff barriers at the expense of American firms.

Why it matters: A lack of money is not America's problem, given its $21 trillion economy. But President Trump has yet to explain how a trade war victory benefits working people in places like Louisiana, Michigan and South Carolina who will suffer higher prices on account of his conflict.

  • Instead, the White House looks to be taking a different track: praising the virtue of sacrifice.

The big picture: Wars are unpleasant things, and trade wars are no exception to the rule. When a country goes to war, its citizens have to make sacrifices, as Sen. Tom Cotton (R-Ark.) acknowledged on "CBS This Morning" Monday.

"There will be some sacrifices on the part of Americans, I grant you that, but I also would say that sacrifice is pretty minimal compared to the sacrifices that our soldiers make overseas, that our fallen heroes that are laid to rest in Arlington make."

The catch: Cotton's remarks come in the wake of White House economic adviser Larry Kudlow telling Fox News' Chris Wallace on Sunday that "both sides will pay... Both sides will suffer on this."

The bottom line: With a trillion dollars of global stock-market losses on Monday alone, and the continued implosion of agricultural prices, Republicans aren't even trying any more to make the case that trade wars are easy to win. Now that they're asking Americans to make sacrifices, they're going to have to start being more explicit about what cause the sacrifices are being made for.

Go deeper: Trade war intensifies as China retaliates with $60 billion in tariffs

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