...the fresh-wave of protectionism...

The US has again imposed tariff on the Chinese exports which has unleashed a fresh wave of protectionism, also in the form of retaliatory tariffs, and uncertainty in the global trade scene and economic growth which might increase the cost of living in countries by reducing real wages and incomes and increasing real cost to the economy in the case of raw material and intermediate goods and services.

In short, protectionism and tariffs are self defeating when it comes to the cost of the economy and that reduces competitiveness and demand.

Moreover, trade is viewed as an engine to reduce unemployment in the economy which is justifiable to an extent as an excuse for the protectionism, but after full employment tariffs would increase the cost for the economy increasing prices and inflation which reduce real wages and demand and growth and when it is countered by retaliatory tariffs the same happens in the trading partners’ economy, ie higher prices and lower real wages and demand.

By levying tariff we tax domestic demand for imports which increases domestic prices of the same goods too if we are near full employment.

The timing for such a move is not opportune and the trading partners, those are retaliating, are repeating the same mistake if they are around full employment, tariffs would lower domestic real wages and demand and growth.

The question is why Trump wants the economy to lose competitiveness by imposing tariff on the domestic demand.... it would reduce real wages... but, would also increase interest rates...?

He might otherwise try to incentivize exports... the corporate tax cuts if passed on to prices would increase real wages and real exchange rate too and demand, imports, too... it would also add to the trading partners economy... higher real interest rates would also increase savings and investment and stable interest rates....

Trump is losing edge because of lower real wages and incomes, but might gain from tax cuts if passed on to the goods and services the economy produces... it could boost real incomes...

Trump might try to increase (domestic) competitiveness... instead of protection from foreign (competitiveness)…