Hudson Institute Fellow Michael Pillsbury joined Shannon Bream on Fox News last night to discuss warnings from experts who say if the President keeps up the pressure in his trade war with China, that the country could be in a recession in three quarters. These warnings are unlikely, a “worst case scenario,” according to Pillsbury.
But Americans can expect to see price hikes on many of their products as the negotiations continue through increased tariffs and a devalued Chinese yuan. How significant the increases will be will depend on what waivers the White House issues for certain Chinese companies as well as any subsidies offered to industries that will suffer as a result of the trade war.
Nevertheless, this is a necessary economic battle, and even those who are opposed to the use of tariffs should be supporting them wholeheartedly; the sooner a trade agreement can be reached, the sooner we can go back to free trade as a conservative mantra and capitalist tenet. We may not like being in this trade war, but now that we’re in we must push it all the way through. No half-measures.
As Pillsbury noted, the best strategy going into September’s talks is to try to get the easier things out of the way and agreed to so we can strengthen both economies through the presidential election. Once the President has secured his second term, he can then go back to the negotiating table with China knowing they will not be able to sustain themselves through four years of a trade war. They currently feel they can last until the 2020 election, and that false sense of security that Joe Biden is going to be the next President is the biggest roadblock to securing a favorable deal.
Economic pundits are paid to worry. It’s good to see some sensibility coming from one particular pundit, Michael Pillsbury, as the trade war with China ramps up to unprecedented levels. It’s important for the President to stay the course through 2024.