Larry Summers, the onetime U.S. Treasury secretary, called Trump's brawl with China a “sadomasochistic and foolish trade conflict.”
Share to twitterLawrence Summers addresses the Council on Foreign Relations’ Symposium on Global Economics on November 17, 2010 in New York City.Larry Summers is as blunt as economists come. The onetime U.S. Treasury secretary also has a knack for apt analogies that bring the dismal science to life.
Summers, though, has seen more than his fair share of financial madness. I was among the handful of journalists who traveled with him around Asia in 1997 when the region’s economies were ablaze with contagion. That was when he was deputy Treasury secretary under Robert Rubin. That’s the first time I heard Summers compare an economic policy to sadomasochism.
Even so, Aesop’s fable about the tortoise and the hare may be the best lens to view Trump-versus-Xi. Trump is the hare, of course. He’s racing full speed ahead with his tariffs and threats, all confidence and hubris. Xi is plodding along, policy-wise, keeping his eyes on the 2025 prize and beyond. The risk is that, like the hare, Trump’s America burns out only to see the steadily progressing turtle–China–reach the finish line first.
In the 80s, tariffs might’ve worked to some extent. That was long before China, India, Indonesia and other manufacturing powers came online. Today’s wage disparities mean tariffs aren’t going to pull millions of jobs back to America. It's more likely to just drive them to relocate from China toNothing about Trump’s assault on China makes the U.S. more innovative or productive.
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