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Peter Schiff Compares Trade War to “Battle at Little Bighorn”

Peter Schiff Compares Trade War to “Battle at Little Bighorn”

Peter Schiff Compares Trade War to Battle at Little Bighorn
Photo by Gage Skidmore  | CC BY | Photoshopped

Political commentators are increasingly critical of U.S. trade policy, particularly tariffs and the trade war with China. Radio host Peter Schiff went so far as to compare U.S. trade policies to General Custer and the Battle of Little Bighorn. Meanwhile, some economic red flags seem to support their worries.

In today’s polarized political climate, there is one topic both the Left and the Right seem to agree on: the trade war with China is eventually going to hurt the average American.

Radio host Peter Schiff has been hammering on the economic dangers posed by tariffs for months. He even compared the resulting trade war with China to General Custer’s Last Stand.

“General George Custer met his doom charging into a battle he thought he could win against an opponent he did not understand. Based on [certain] views about the fast-emerging trade war with China, it looks to me that [the U.S.]…is charging into an economic version of Little Bighorn.

“By mistaking the real nature of international trade, the costs of tariffs, the effects of currency movements, and the supposed ease with which the United States could quickly re-establish itself as a low-cost manufacturer, [the U.S.] risks shredding the safety nets that have undergirded the U.S. economy for decades and plunging us into a war we are ill-equipped to fight.”

Those are strong words. But is Schiff’s Little Bighorn analogy accurate? Are these tariffs pushing the U.S. toward a disastrous economic “ambush” that could devastate America’s economy? Let’s look at some economic indicators to see what they point to.

Currency Manipulation

Marc Chandler, chief market strategist at Bannockburn, agrees that China’s recent currency devaluation is part of an escalating trade war: “This is another step in the currency war. This also makes trade more difficult.”

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US Trade Policy: Not Only are We Stupid, We are Hypocrites

The news agencies reported Trump would extend tariffs on Wednesday. Instead, we have an outline of possible actions.

The Wall Street Journal reports U.S. Turns Up the Heat on China.

The U.S. turned up the heat Wednesday on China, with the Trump administration threatening to more than double proposed tariffs on imports while Congress passed a defense bill designed to restrict Beijing’s economic and military activity.

The moves come as Beijing and Washington have failed to ease an escalating trade dispute, prompting the administration to seek additional leverage. The administration, which has already affixed tariffs on billions of dollars in Chinese imports, said it would consider more than doubling proposed tariffs on a further $200 billion worth of Chinese goods to 25%, up from an original 10%.

Meantime, the Senate approved a defense-policy bill that both tightens U.S. national-security reviews of Chinese corporate deals and revamps export controls over which U.S. technologies can be sent abroad. The bill, which also restricts Beijing in areas ranging from cultural activity to military exercises, passed the House a week earlier and President Trump is expected to sign it into law.

Administration officials are confident they have the upper hand in the trade fight because the U.S. economy is strengthening while the Chinese economy shows signs of growing slack. Moreover, China is more dependent on trade than the U.S.

But that confidence so far hasn’t translated into action.

President Trump has threatened to apply tariffs to all $505 billion in Chinese goods entering the U.S. if the two are unable to reach a settlement. Washington has already applied tariffs to $34 billion worth of Chinese imports, with another set of duties on $16 billion in goods scheduled in the days ahead.

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