President Donald Trump, self-declared "Tariff Man," lived up to his billing and wielded his favorite weapon yet again ahead of crucial trade talks with China this week. Enough is enough. The U.S. needs to bring these negotiations to a close before more damage is done.
U.S. officials say Trump's threat to raise tariffs on $200 billion worth of Chinese goods came in response to Chinese attempts to roll back commitments made earlier in this months-long process. That wouldn't be out of keeping with China's past negotiating tactics. Deploying the threat of new tariffs one more time could conceivably be justified as a way to stop the backsliding and eke out a few more concessions. The problem is that carrying out the threat would be crazy.
The U.S. economy is booming in spite of the duties already imposed on China and not, as Trump claims, because of them. Raising levies further would represent an additional tax on U.S. companies and consumers. Manufacturers that rely on inputs from China and farmers targeted by China's retaliatory tariffs are suffering already. Expanded duties would hit American consumers more directly and more visibly. And that's to say nothing of the possible impact on global financial markets.
The risk of instability is serious because any new measures would also encourage escalation. At some point, this spat over tariffs could become an actual trade war. China has already vowed to respond in kind, which would put pressure on Trump to make good on his threat to impose duties on all Chinese imports to the U.S. The International Monetary Fund has estimated that in a full-blown trade war, annual U.S. GDP could shrink by 0.6%. The fact that the Chinese economy would contract even more wouldn't make the pain any easier to bear for ordinary Americans, and it wouldn't buoy a stock market that is already generously valued.
Throughout this struggle, U.S. expectations have been misaligned. It was never likely that China would fundamentally alter its state-driven industrial model. Holding out for grand-sounding reform pledges that will essentially be unenforceable short of an all-out trade war is pointless. U.S. negotiators should concentrate on nailing down the details of China's commitments on market access and protecting intellectual property - which Beijing can spin as being in China's interests. A willing commitment of that kind would be more readily enforceable, using China's own extensive disciplinary system.
At the same time the U.S. should focus on developing a sustained international campaign to pressure China into meeting its trade obligations. That means working more closely with Europe and Japan, to hold China to account at the World Trade Organization and close loopholes in WTO rules. It also means strengthening alternative trade blocs, including the revived Trans-Pacific Partnership, that China can't join without implementing deeper reforms.
This isn't just about trade. For national-security purposes, the U.S. needs to regulate China's access to critical technologies. Washington must continue to lead allies in limiting Chinese expansionism in the South China Sea and along the Belt and Road, and should upgrade its military resources to address China's fast-growing capabilities. The U.S. should be leading efforts to call out Chinese human-rights violations in Xinjiang and elsewhere, and to sanction those directly responsible.
America will be in a much better position to do all this if its economy and its companies are strong. Removing tariffs, not raising them, is the right way to build economic resilience. For the same reason, reforming immigration, funding basic research, and improving education should be Washington's abiding concerns. Workers displaced by trade or other economic disruptions should be helped, but not by fencing the economy off from foreign competition.
Trump's previous trade negotiations have followed a pattern: bluster and threats, including last-minute interventions that nearly blew up the process, followed by minor concessions and declarations of victory. So be it. Another hollow Trumpian win would be vastly better than extending this dangerous quarrel.
This editorial is the opinion of Bloomberg Opinion's Editorial Board.