Juliette Kayyem writes:

The economy, and the supply chains that allow it to function, can adjust fairly quickly to certain shocks, including weather disasters and even a pandemic. Early in the COVID shutdowns, toilet paper was in short supply as Americans spent more time at home and less at workplaces and schools. The problem eased as manufacturers ramped up production, transportation systems adapted, and consumer anxiety decreased.

But Trump’s trade war is different because it is unpredictable and indefinite. Even if he were to renounce tariffs tomorrow, Trump has already shaken global confidence in American economic-policy making. No one can comfortably make business decisions based on what he does. Unless the Republican-controlled Congress steps in to quickly take away the president’s ability to impose import duties at will, a failed effort so far, even foreign trading partners who believe they have a deal with the United States could be at risk of capricious new taxes on their products.

Tariffs don’t just reduce the flow of goods coming into the country; they also cause an atrophying of the logistics system that moves products into, out of, and around the United States. “Less cargo volume, less jobs. That’s the rule here,” Mario Cordero, CEO of the Port of Long Beach, said recently, describing how one in nine jobs in the greater Los Angeles region arises directly or indirectly from its ports. “Port complexes are like your baby toe on your foot,” Peter Neffenger, the former commander of the Coast Guard sector that includes Los Angeles and Long Beach, told me. “You don’t think about it until you break it one day and realize, ‘I can’t walk.’”

Like the shipping business into and out of Los Angeles, the nationwide trucking industry is slowing down, because drivers have a lot less cargo to move. Without inventory arriving or en route, small businesses will falter; bigger industries will shrink; shelves will be empty. [Continue reading…]