High Stakes Poker

            Tariffs on imports are taxes. We, the American people, have to pay them. When prices go up on air-conditioners and washing machines because of tariffs, Americans have to pay more for them. When tariffs are imposed on steel and aluminum imports, products made with them cost more. And we have to pay those higher prices as well. Now, if President Trump goes through with his promises to place tariffs on all Chinese imports, we will have to pay more for the higher prices on them.

            Not everybody needs a new air-conditioner or washing machine, or a new car made with imported steel parts. But how about shoes? Some 97 percent of them sold in our stores are imports, two-thirds rom China. Who doesn’t need shoes? The bare fact is that all America is starting to see prices rise as a direct result of tariffs. And they will continue to rise if the president continues his unwise protectionist policies.

            Maybe it’s all a poker game with him. He went all in by calling for a 25% tariff on European cars. Maybe it was a bluff, but it succeeded: Europe blinked, because Germany depends heavily on selling BMWs in America. Maybe tariffs between Europe and America will all be eliminated as they have been between Europe and Japan. If they are, the president will have won that game.

            China will not be so easily bluffed. The Europeans are allies, but the Chinese are not, and they hold a lot of high cards. One is that President Xi does not have to fear being ousted from power. Another is that China owns more than a trillion dollars of our debt. Yet another is that we need China to cooperate on the denuclearization of North Korea. For China, this is not a game: it’s a war over its control of the South China Sea and over its growing influence in South America, Africa, and the Asian sub-continent. It’s a war about who is to be the world’s dominant power.

            President Trump holds a lot of high cards, too. But China will not be bluffed. To paraphrase a familiar song, “There’s a time to hold ‘em, and a time to fold ‘em.” The stakes are high. And the biggest losers may be us.