Trump can't even do a trade war right.

Trade wars are bad, mkay? But if you happen to find yourself in one (or were stupid enough to start one yourself), you at least need to get a couple of things right.

And Trump has messed up both, as beautifully explored by Catherine Rampell in her recent article (Trump is waging a trade war in the dumbest way possible), reproduced below.

While it is estimated that Trump’s tariffs on steel and aluminium may save 26,280 steel and aluminium-producing jobs in the US, these commodities are also key inputs in other sectors, including the car industry. Consequently, 432,747 jobs are estimated to be lost because of these higher import prices. That’s a job loss-to-gain ratio of worse than 16:1! As Rampell previously noted, “even 19^th century Mercantilists knew to put tariffs on finished goods, not inputs.”

And overlooking the fact (though you absolutely shouldn’t) that Trump isn’t launching a trade war against the US’s adversaries – he’s launching it against the very Western alliances that created the post-WWII world order – the rest of the world (including key strategic allies the EU and Canada) has proven itself far better at this game than Trump.

The key in a trade war is to attack the areas that are especially important to your adversary, but less important to you – an adversary’s key strategic industry that you can easily replace with imports from another country, or your own production.

But Trump’s tariffs are essentially global, and US-made steel and aluminium is not a perfect substitute for that which is imported. This leaves US producers with little alternative but to pay higher prices for steel and aluminium. And because the US imports steel and aluminium from many countries, the cost to those countries is spread relatively thinly.

So Trump neglected this point. But the rest of the world didn’t. They are retaliating with their own tariffs on Kentucky bourbon, Iowa pork, Wisconsin motorcycles, and Ohio washing machines, among others. These are all key exports for these states – all of whom voted for Trump in the 2016 election. The rest of the world is expertly attacking Trump’s own base, while leaving itself plenty of other potential suppliers of these (or similar) products. Trump’s strategy on the other hand, is essentially “give me all your money or I’ll shoot myself in the foot” (Rampell).

I suppose we shouldn’t be surprised that someone who doesn’t even know not to start a trade war, also doesn’t know how to properly fight one.

“Trump is waging a trade war in the dumbest way possible

By Catherine Rampell

President Trump says we need to be “smarter” in how we deal with other countries. And yet his approach to extracting concessions from our trading partners has proved very, very dumb.

Notwithstanding Trump’s Twitter declarations, trade wars are neither good nor easy to win. In a trade war, every side loses, experiencing lost jobs, crippled businesses and higher prices for consumers. We learned that the last time we had a full-blown global trade war — in the 1930s after Congress passed sweeping tariffs that exacerbated the Great Depression.

Even so, it’s possible for some countries in a trade war to lose more than others. And that’s the position Trump is leaving the United States in, by taking perhaps the worst possible approach to economically bullying other countries.

Most of the time when a U.S. president takes an aggressive new trade action, it’s a tariff that targets a specific country or narrow set of countries. There’s good reason for this: Again, most of the time, these actions are in response to an act of alleged foul play.

Yet another reason to slap tariffs only on imports from selected countries is to limit the pain to U.S. businesses and consumers that purchase those products. We want to make sure we have alternative suppliers available when the imports from one misbehaving country suddenly get pricier.

Again, that’s how we usually think about trade measures. It’s not what happened this time around with steel and aluminium tariffs, however.

Using a rarely invoked authority designed to protect “national security,” Trump has imposed a global tariff on steel and aluminium.

Because it’s a global tariff on a commodity supplied by dozens of countries, each of those other countries is taking a hit. But the hit is relatively small compared to the one we’re experiencing — the one we’ve inflicted on ourselves.

After all, we can’t easily shift supply around to limit U.S. business and consumer pain if we’re slapping tariffs on steel and aluminium produced by almost everyone. And while we do produce these metals here, the exact mix of products that, say, U.S. steel mills make is not identical to the mix of steel products we import. Which means factories here can’t easily convert and scale up their production to meet market demand even if they do have idle capacity.

Unsurprisingly, this has major consequences for the many American firms that purchase steel and aluminium, and that are now less competitive because their costs have skyrocketed.

U.S. steel prices have risen nearly 40 percent since the start of the year, and are now more than 50 percent higher than in both Europe and China, according to the S&P Global Platts benchmark price assessment for hot-rolled coil, the bellwether product.

But that’s not the only reason these tariffs are going to hurt us a lot more than they hurt everyone else. The bigger problem is how other countries, including our friends and military allies, are responding to our protectionist measures.

Collectively Canada, the European Union, Mexico, Russia, India, Japan and Turkey have already announced $40 billion worth of retaliatory tariffs on U.S.-made products. The scale of these retaliatory tariffs isn’t what’s most concerning; it’s the composition. These other countries have been far more strategic about which U.S. products they choose to target than we apparently were in launching this trade war.

That is, their counterpunches are likely to draw more blood than our sloppy opening gambit.

Why? First, these other countries have tried to pick and choose products that their businesses and consumers can easily obtain elsewhere. In fact, when the E.U. recently revised its list of U.S. products subject to retaliation, it decided to remove some items for which non-American close substitutes apparently weren’t available, as the Economist’s Soumaya Keynes pointed out. 

Even worse for Trump, these angry countries are choosing products with political sensitivities in mind. Hence the appearance of Kentucky-made bourbon, Iowa-farmed pork, Wisconsin-manufactured motorcycles and Ohio-made washing machines on these lists.

In short: Our trading partners have fine-tuned the art of minimizing their own pain — and maximizing ours.

Trump clearly believes he’s being “tough” with these other countries, and protecting American jobs, with his ineptly-designed tariffs. In fact, he’s putting many more jobs in other industries at risk. A report released this week by the Trade Partnership, a consulting and research firm, estimated that the ratio of jobs lost to jobs gained from Trump’s trade actions will be about 16 to 1: 26,280 steel and aluminium jobs gained, compared with 432,747 jobs eliminated throughout the rest of the economy.

And that’s presumably not even counting any of the hundreds of jobs now held by Trump’s fellow Republicans on Capitol Hill.”