With the stunning news that North Korea might agree to freezing its nuclear weapons program (we'll keep our fingers crossed), it seems as though America might have managed to actually avoid going to war. However, large-scale conflict can take different forms and right now the world is gearing up for a trade war in retaliation to the steel and aluminum tariffs proposed by the Trump administration. Before you choose sides in support or opposition to this policy, let's answer a few basic questions:
Why are we embarking on this course?
America's steel production capabilities are essential to our national security. We need this vital material to build our naval vessels, humvees, MRAPs, and other warfighting systems. China has deliberately subsidized their steel producers so that they can dump steel in the global market at prices far below what any private company can compete with. Make no mistake, this is part of a larger strategy to diminish America's ability to produce its own steel and thereby reduce America's military readiness.
America has a legitimate grievance in this case. It is also true that many countries tax our products excessively, use "non-tariff barriers" like quotas to reduce market access for American products, steal intellectual property, and utilize various other means of denying America the same free markets as we provide to other nations. We cannot battle the entire global trading system (nor should we), but we are justified in addressing specific trade practices that harm American global competitiveness.
Can we withstand a trade war?
The short answer: yes. Our actions must be targeted and part of a long-term strategy for victory. There is little room for mistakes. But America has tremendous leverage in a trade war as we are the most lucrative market in the world and everyone wants access. Trade wars are not "easy to win", but America can withstand the blowback more than most of our trading partners. Do you think that China wants 100 million unemployed factory workers marching through the streets? Even with our clear and undeniable need for global markets, we can take a calculated step back with far greater ease than an export-dependent nation like China.
What do we expect to achieve?
If America can diminish the practice of intellectual property theft, increase access to foreign markets, and protect our markets from illegal dumping, our businesses and our nation could increase economic output by hundreds of billions of dollars (just look at our trade imbalances as evidence of this assertion). It must be emphasized that we are not advocating protectionism or isolationism. If America wants to correct the improper trade practices utilized by other nations, then we need stronger enforcement of existing trade laws in a targeted and strategic manner. This is creating change within the system.
What is needed to win a trade war?
We need allies, so we should consider which violators are most egregious and consider providing exemptions for others. We need a clear strategy for victory, meaning we must identify the specific trade practices that we want to curb and target them with the proper penalties. Last, we need unity. America has the leverage to win a trade war but only if we can stand the heat long enough to win. If America and its allies can apply pressure on the most harmful trading practices, we can succeed in altering the behaviors of our trading partners. The problem is that America lacks this unity. China can take a position and hold it. In America, the slightest retaliation from our trading partners sends a dozen Congressman and Senators screaming to the news cameras. If we can stand together long enough, we can win. That, plus a targeted strategy with our allies, is all that is needed for victory.
In conclusion, if America really wants to win a trade war we can. Unfortunately, it is doubtful that we can stand together long enough to achieve victory. In the end, the only nation that can defeat America in a trade war is America itself.