The Times reported on a trade war game conducted by trade experts and economists. It starts with:
Last month, two dozen trade experts from the United States and other countries gathered at a Washington think tank to try to simulate what could happen if Mr. Trump moves ahead with his plan to impose punishing tariffs on America’s biggest trading partners.
OK. How did it go?
Just before lunch, the picture did not look good. The board held a sea of red cubes, indicating that the tariffs were escalating international tensions, destroying jobs and pushing up inflation.
But what happened next was surprising and, according to the participants, a hopeful sign.
Guess what. The people at the simulation reached trade deals that reduced barriers again.
Emily Kilcrease, a senior fellow at the think tank who played the part of Mr. Trump, said the game suggested that “there is a path to victory for a U.S. tariff-first policy.” She cautioned this would be true only if the United States focused on reaching bilateral trade agreements, a strategy she called “viable” but “high risk.”
Here's the thing. As Paul Krugman notes, there is no method to his madness. Trump is enraptured with this trade war, he thinks the experts are all wrong and he is right. We might very well climb down from the coming trade war, but it will come at a huge economic price.
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