President Donald Trump started this trade war. He’ll determine how it ends. As the clock passed midnight today, tariffs on $34 billion of Chinese goods took effect in customs houses around the U.S. In Beijing, officials immediately slapped levies on an equal amount of U.S. imports, setting the stage for an economic battle of attrition.
The actions follow six months of threats, probes and failed negotiations as Trump reshuffled his advisers and reverted to the pugilistic trade approach he promised during the campaign. The push has helped buoy his poll numbers, easing Republican fears of a Democratic rout in the November Congressional midterms.
But the strategy will grow increasingly risky for Trump, who last night suggested his tariffs list could eventually reach $550 billion — exceeding all U.S. goods imports from China. The fight is already influencing retailers’ buying decisions, and Americans could feel price hikes just as they’re heading to the polls.
With China and the rest of the world urging caution, the decision to escalate lies with Trump. As Robert Holleyman, former deputy U.S. trade representative under President Barack Obama, put it, “If we don’t find an exit ramp, this will accelerate like a snowball going down a hill.”