Sleepwalking Toward a World Trade War

All the signs are pointing to the Trump administration sleepwalking toward a global trade war.

It is not simply that the United States is now regarding China, the world's second largest economy, more as a strategic geopolitical threat rather than as a potentially cooperative trade partner. Nor is it simply that the president has reacted to General Motors' recent announced plant closures by threatening to impose punitive import tariffs on European and Japanese cars.

Rather, and more important, it is that the Trump administration's macroeconomic policies are almost certain to result in a continued widening of the U.S. trade deficit. That is bound to lead to a further hollowing out of the U.S. manufacturing base, which risks drawing the administration's preferred response of yet higher U.S. import tariffs.