Trump’s Virus Trade War Lasted About Three Days

Written by SK Ashby

Trump caused an uproar and may have even cost lives last week when he banned exports of medical equipment including to our close neighbor and ally Canada, but the White House has now abruptly changed course.

As recently as Saturday, Trump said they were going to be "very tough" on the flow of goods and yesterday morning Trump's top trade adviser, Peter Navarro, appeared on Fox News and said they were merely using their power to address shortages.

With all of that said, Trump's export ban was canceled yesterday evening.

From Bloomberg:

President Donald Trump eased restrictions on exports of masks and other protective equipment needed to fight the Covid-19 pandemic just days after their introduction as he confronted a backlash from allies around the world.

Faced with domestic criticism of his administration’s handling of the Covid-19 crisis and cries of shortages from hospitals on the front lines, Trump late Friday had imposed a ban on exports of N95 masks, surgical gloves and other protective equipment.

But late Monday the president reversed course, saying the 3M Co., with which he had a public fight last week, had agreed to produce 55 million masks a month for U.S. health care workers and to import 167 million masks made by its facilities in China.

“So the 3M saga ends very happily,” Trump said at a White House news conference.

We're importing 167 million masks made in -- gasp! -- China? And that's a 'very happy' ending, Trump says.

See, no one should be under the impression that Trump reversed course out of compassion for allies and trading partners.

The truth is that while Trump's adviser Navarro said the ban was necessary to address shortages, the export ban actually would have exacerbated shortages once other countries retaliated.

Like most other goods in the world, the United States typically imports far more medical supplies than it exports.

Chad Bown, a trade expert at the Peterson Institute for International Economics, said Trump’s move risked backfiring as the U.S. was still dependent on imports of protective equipment, which other countries could decide not to send its way as well.

In 2019, U.S. exports of N95 masks and other products covered by the ban amounted to about $1 billion, Bown said. Imports were worth about $6 billion.

“This is just an incredibly short-sighted policy,” he said. “Of course, we need to acknowledge that there are shortages and other problems out there. But this policy is only going to exacerbate the shortages.”

Given everything we've seen over the past two years, I think we can infer or assume that Trump and his team -- a team overseen by Jared Kushner when the decision was made -- did not fully understand or appreciate the implications of their actions and only reversed course after blunt talks with Canadian officials.

If that was the case, it would make this no different than every other trade spat we've seen since early 2018 when Trump first imposed tariffs on foreign solar panels.

Arbitrarily disrupting the free flow of goods is generally just not a good idea. I think that should be clear by now.