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Illustration: Lazaro Gamio/Axios

We are now, officially, in a full-fledged trade war. Effective Monday morning, President Trump will be taxing half of China’s imports into the US, with aggressions set to intensify further in January when the tariff rises from 10% to 25%.

Trump's bigger-picture view is well-known: "TRADE IS BAD." That's all trade, not just trade with China. So be wary of rushing to the conclusion that Vietnam and other southeast Asian countries could end up being the winners in this trade war, as companies move their operations out of China. More realistically, as in most trade wars, there will be no winners at all.

  • The trade war could become a currency war if the Chinese government continues to keep weakening the yuan as tariffs hit domestic exporters. That's not a likelihood, yet, but it's something to worry about.
  • Trump doesn't begin to understand Ricardo's principle of comparative advantage, and he also doesn't understand tariffs. (He thinks they're paid by China, when in fact they're paid by American importers.) When the guiding principle at the top of the US government is "trade is bad," it's hard to see what would cause this war to end.

This trade war could last for decades, if not forever. American voters share Trump's ignorance of Ricardo, which means that there's not much political incentive for a president of either party to rapidly normalize trade relations.

  • Canada is in the crosshairs, too: Trump has threatened its "ruination" in the event that a new NAFTA deal isn't reached.
  • So far, market reaction to the trade war has been muted. That's bad news. If the tariffs had been greeted by a 900-point plunge in the Dow, Trump might take the wails of pain more seriously.
  • Alibaba's pledge to create 1 million US jobs has already been vaporized. It won't take long for real jobs to go the way of hypothetical ones.

Go deeper

Biden: DOJ should prosecute those who defy Jan. 6 subpoenas

President Biden speaks with reporters at Bradley International Airport in Windsor Locks, Connecticut. Photo: Brendan Smialowski/AFP via Getty Images

President Biden said Friday that the Justice Department should prosecute those who defy subpoenas from the Jan. 6 select committee.

Why it matters: The president's remarks come one day after Donald Trump ally Steve Bannon failed to show up for a deposition before the committee.

Updated 1 hour ago - Politics & Policy

Bill Clinton hospitalized for non-COVID-related infection

Former President Bill Clinton. Photo: Win McNamee/Pool/AFP via Getty Images

Former President Bill Clinton was admitted to the University of California, Irvine Medical Center on Tuesday for a non-COVID-related infection, his spokesperson Angel Ureña said Thursday.

The latest: In an update on Friday, Ureña said Clinton's health indicators are "trending in the right direction, including his white blood count which has decreased significantly."

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FDA panel endorses shot of J&J booster for adults

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Members of the Food and Drug Administration's vaccine expert panel on Friday unanimously endorsed a booster shot for adult recipients of Johnson & Johnson's COVID-19 vaccine at least two months after the initial dose.

Why it matters: The advisory committee raised concerns about a dearth of data to support their decision but ultimately decided to support an additional shot for those over 18.