Today’s trade war, featuring a he-said-Xi-said one-upmanship, has already affected crores of people around the world. It has wiped trillions of dollars off the market value of personal investments and pension funds that ordinary citizens around the world depend on. Trump has brushed it off with a wave of his hand, whose size he boasted of during his first term, calling it “medicine” that had to be taken.Trump’s reason for administering the ‘medicine’ is based on a simplistic worldview: he wants to wipe out America’s trade deficit. It’s part of his playbook that’s heavily annotated with victimhood. The man behind the Resolute Desk in the world’s most powerful office has claimed he has been wronged by US presidents, the Congress, judges, TV producers, portrait painters, all those who have sued him—and America’s trade partners.The trouble is in offering a counterstroke to the “masterstroke”. His commerce and treasury secretaries’ claim that their phones “have been burning up” with calls from more than 70 nations to negotiate new trade deals focuses attention on the “proven economic formula” on which the tariffs have been slapped. Trump, not known as one to look at two sides of a formula, has called the rates, “Reciprocal. That means they do it to us and we do it to them.”But reciprocal to what? The chart he held up on the breezy ‘Liberation Day’ afternoon claims to list tariffs and non-tariff barriers others levy on the US. It’s been proven since—including in a faux formula later released by the White House—that the rates are trade deficits with other countries as a share of America’s imports from them.To levy a real duty based on a fictitious formula—“half-reciprocal, because we are kind people”—is like putting a golf ball with a hammer. So, if other countries try to match the rates with retaliatory tariffs, it would be like playing along to Charlie Chaplin’s Adenoid Hynkel, who went on raising his chair to rise above others at the table. Like in The Great Dictator, after the Great Tariff War might come the Great Fall. But as the book Trump held up the wrong way in front of cameras at the height of the George Floyd protests in Washington says, pride goes before the fall.
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