President Trump shocked markets and challenged the Republican consensus last week by announcing new tariffs on imported steel and aluminum. Now the world is wondering how much further he will go. Should corporate executives and investors expect a few high-profile but largely symbolic measures, or should they brace for more trade shocks?
The stakes are immense, but the signals from the White House are, as usual, mixed. Mr. Trump tweeted Friday that, “trade wars are good, and easy to win.” But on the other hand, he said in a press conference last month with Australian Prime Minister Malcolm Turnbull that he was open to joining the Trans-Pacific Partnership if the U.S. could get a better deal.
Mr. Trump’s record suggests that more trade shocks are coming, and that they may be more severe. His attacks on free trade emerge from one of the most deeply rooted beliefs of his presidency—that American foreign policy has lost sight of the national interest and reaches instead for a vague and unrealistic “globalist” agenda. By “America First,” Mr. Trump means restoring the primacy of the national interest. The president may spend a lot of time on the golf course, but he pursues his nationalist agenda with great persistence. He is willing to take risks and pay a high price to achieve it.