Late last week, President Trump ramped up his trade war with China by raising the tariff rate on $200 billion of Chinese imports (that’s 40 percent of our Chinese imports) from 10 to 25 percent. The Chinese quickly retaliated by raising their tariffs on U.S. imports.

Why is this happening and where is it going?

One reason for the trade war is that Trump views the trade deficit as a scorecard, and he believes tariffs will reduce our $500 billion deficit with China (that’s over 2 percent of gross domestic product; our China goods deficit was $540 billion last year, offset by a $40 billion surplus in services). That might be right, but he’s just playing trade-balance-whack-a-mole, as importers shift to other suppliers. For various reasons (stronger U.S. growth boosting the dollar, both of which increase net imports), the U.S. trade deficit is likely to grow over the next year. And in terms of its economic impacts, it’s the total trade deficit that matters, not the balance with individual countries.

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Then there’s the fact that Trump — and here, his view is the dominant one among economists and business leaders — objects to China’s disregard for the rules of international trade. They subsidize state industry, insist that multinationals sign joint venture agreements that transfer technology and raise other barriers to keep out businesses that threaten their control over their financial system (such as strict limits on foreign investments).

Finally, the most immediate reason for raising the tariff rate is the claim by our negotiators that their Chinese counterparts backed away from legislating enforceable, transparent rules to block these practices.

The consensus among the punditry is that team Trump is correct to go after China’s trade practices, but they’re doing it the wrong way. First, sweeping tariffs like this won’t work and will just hurt U.S. consumers and businesses. Second, instead of alienating our trading partners by also hitting them with tariffs, we should form a united front against China.

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But is the consensus correct? Yes and no.

Despite the president’s repeated falsehoods that China pays the tariffs, the fact is they are borne by us, not them (they’re paid first by importing firms who then try to pass the costs to consumers). Evidence shows that the tariffs are bumping up the prices of targeted goods and hurting both those who use imported parts to make things here and exporters facing retaliatory Chinese tariffs (i.e., U.S. farmers). That said, current conditions show that these disruptions are not yet of a magnitude to throw our economy off course.

But the “tariffs won’t work” critique is weaker and lacks a compelling case about what would work better. For those of us who’ve long watched U.S./China negotiations, it looks like Robert E. Lighthizer (Trump’s lead negotiator) has pushed the Chinese further and harder than any of his predecessors. Our negotiators’ theory, which may well be correct, is that they can’t force China to play fair without at least temporarily hurting U.S. consumers and producers.

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The argument that we should join with our traditional allies and form a united front against China is wishful thinking that ignores one of Trump’s guiding lights: America First! In his mind, tariffs are a tool — one a compliant Congress allows him to freely impose — against any and all who sell to us. The simple fact is he doesn’t like imports and believes import substitution, or the domestic production of goods we now buy from abroad, is an easy, win-win solution. In this regard, the fight with China is a war between two protectionist mercantilists.

Also (and I fear this aspect of the problem is underappreciated), he knows he can use trade negotiations (and Twitter) as a tool to drive the near-term stock market up and down. Never has a president played the markets like this, and I strongly suspect that Trump will continue to use this tool to his political advantage.

For these reasons, there’s a good chance that, as long as Trump is president and the U.S. economy remains strong, trade wars will persist. Trump’s negotiators believe that no one before them has played this level of hardball with China, and that’s what it will take to move Beijing. And he’ll continue playing yo-yo with the stock market, while fruitlessly waiting for the import-substitution fairy to do her thing.

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For the rest of us, that will mean a bit more inflation, but price growth has been so low that most consumers will barely notice the extra 0.2 percent increase in inflation some are predicting. Certain producers and exporters will be hurt, as will their work forces. But compared to every other advanced economy, the United States is insulated from trade. We import 15 percent of our GDP and export 12 percent. For most of our trading partners, those shares are doubled or tripled.

To understand the real damage, you have to turn to historians of trade wars (here’s a good summary), especially those who link the geopolitical risks engendered by the intersection of nationalism, populism and protectionism. History suggests that these forces can lead to problems from underdeveloped industries to dangerous political alliances (“Many historians contend [that Smoot-Hawley] … contributed to the rise of the Nazis and other fascist parties.”). Historian Marc-William Palen argues that the winners of trade wars are the countries that sit out the battle.

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