How the twists and turns of the trade war are hurting growth

AFTER WELCOMING the St Louis Blues, a championship-winning ice-hockey team, to the White House on October 15th, President Donald Trump fondly recalled a recent triumph of his own: last week’s tentative trade deal with China. Simply put, America will impose no further punitive tariffs on Chinese imports if China promises to buy American farm goods worth billions of dollars. How many billions? “It’s very big numbers,” Mr Trump emphasised. “I said, ‘Ask for 70.’…My people said, ‘All right, make it 20.’ I said, ‘No, make it 50.’”

Will this carefully calibrated amount ever materialise? China does not want to pay over the odds or deprive other, friendlier suppliers of its custom. It also wants America to go beyond promising no new tariffs and to start removing existing ones. The deal may unravel before it is written down, let alone signed by the two countries’ leaders next month at the Asia-Pacific Economic Co-operation forum in Santiago.

That unpredictability is a problem. Not just higher tariffs but “prolonged trade-policy uncertainty” are damaging the world economy, said Gita Gopinath, the IMF’s chief economist, this week as the fund again cut its forecast for global growth. “Manufacturing firms have become more cautious about long-range spending and have held back on equipment and machinery purchases,” the fund notes. The...