No one wins a trade war. Comparative Advantage is a basic truth of economics. There is much about economics that is not predictable, because variables change. But there are tenants that run true regardless of the variables. Comparative Advantage is one of those.
Comparative advantage says if every country produces what it does so at a lower cost than other countries, then all countries will benefit from a higher standard of living. And the market is what determines the clearing price, the profit that can be gained from the clearing price by each potential producer who has their own cost profile, and the result is a global production pattern that maximizes profit and consumption.
If you disrupt that process with tariffs, you will lower consumption by increasing profits in your own country and if everyone responds with various tariffs, every country will have higher inflation and a lower standard of living.
It is hard to believe our President studied economics, since he believes economics is a zero sum game.
Meanwhile, this is just one element of the chaos in public policy and we can only hope that 2018 elections bring us to a better place in 12 months.
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