This is the Cato Daily Podcast for Friday, April 6, 2018. I'm Caleb Brown. The trade war between China and the United States

will have a few winners, many losers, and leave the two countries with worse relations.

Heto Institute Trade Policy Analysts Simon Lester and visiting scholar Enumonock

discuss where trade policy goes from here.

Larry Cudlow says the markets should not be overreacting to the announcements from both the United States and China with respect to tariffs.

These are in the proposal stages.

They are not imposed yet. He says this is arguably not. We're not in a trade war and that everybody should just chill out.

Yeah, the Trump administration has continuously given us some mixed messages about what they're doing on trade and it's

reassuring to hear Larry Cudlow say that hey maybe we won't actually see these tariffs.

But then if you listen to other members of the Trump administration, it sounds like they're

coming any day.

And it sounds like they're trying to both reassure Wall Street so that the investors don't panic, but also make China worried enough

that they actually cave in.

This strategy is a bit of a mess.

It's hard to see how it will actually be effective, and it makes it really difficult

to figure out where this is all going.

It's easy to look at these tariff numbers and panic a bit and say this is going to be

really bad for the economy, but maybe we'll all go away.

You know, we've seen this in the past already with the Korea U.S. Trade Agreement.

The U.S. made some big demands and then kind of gave in and negotiated a new

Korea U.S. trade agreement that wasn't much different than the old one so it's

really hard to figure out where this is going. If you follow markets for various goods, soybeans were one of the ones that was hit most severely by the announcement that China would be placing tariffs or is in the planning stages of placing tariffs on U.S.

...