Economist Says Washington's Trade War Risks Creating U.S. Recession
Washington's trade policy risks creating the very recession Trump most fears in his 2020 reelection campaign year, said a renowned U.S. economist.
DENVER, the United States, Aug. 25 (Xinhua) -- Washington's trade policy has no direction and risks triggering the exact recession the U.S. administration fears most, said a renowned U.S. economist.
"Pure economic folly," said Vincent Smith, a visiting scholar at the esteemed conservative think tank of American Enterprise Institute, of the protracted trade war between the world's two largest economies.
"It is a trade policy with no direction, and a trade war that has no winners," the nationally renowned conservative economist told Xinhua.
The latest episode of confusion in the trade frictions the United States has provoked against China came during the ongoing Group of Seven (G7) summit in France.
When asked whether he regrets escalating the trade war with China, U.S. President Donald Trump said he has "second thoughts about everything," stoking speculations that he might begin to de-escalate tensions.
Yet just hours later, the White House issued a statement saying the president's "second thoughts" remarks meant he regrets not raising the tariffs higher.
U.S. President Donald Trump speaks to reporters before leaving the White House in Washington D.C., the United States, on Aug. 21, 2019. (Photo by Ting Shen/Xinhua)
Also during the summit, Trump said other G7 leaders "respect the trade war." However, British Prime Minister Boris Johnson, who is widely believed to be Trump's closest ally in the exclusive club of developed countries, said publicly that "we don't like tariffs on the whole" and his country is "in favor of trade peace on the whole."
Among other leaders, French President Emmanuel Macron stressed that tensions are bad for everyone, and European Council President Donald Tusk appealed for an end to trade wars.
Against such a backdrop, Smith urged the U.S. government to abandon the unilateral tariff adventures and arbitrary chaotic actions and shift to conventional processes for resolving trade disputes with its trade partners.
Should it do that, he added, it would calm markets by providing more certainty about future market behavior, benefiting both the United Stats and the global economy.
"Agriculture is one sector of the U.S. economy that would benefit substantially from a shift to more normal trade negotiation strategies," he said.
"But other sectors and almost all U.S. consumers also stand to gain from a movement towards a more rational trade strategy," added the economist.
If such a shift is absent, "the Trump administration risks creating the very recession President Trump most fears in his 2020 reelection campaign year," he said.