Trump shredding credibility with allies as China benefits: John Bolton

U.S. President Donald Trump‘s moves to take China to task on trade are likely to backfire as his sweeping global tariffs hit allies as well as rivals, according to former national security advisor John Bolton.

“This is certainly not the way you treat your friends. You don’t slap them in the face publicly and say, I’m going to tariff you unless you do better on trade negotiations,” Bolton told CNBC’s Dan Murphy on Monday.

“And in fact, the one country that really deserves a trade war — China — we’ve put them in a much better position strategically by going to war on tariffs with our best friends, whereas if we had all joined together, maybe we would have had an impact on China’s behavior. So, this is a not just an economic blunder, which I think it clearly is. It’s a strategic blunder that’s going to cost the United States dearly if this tariff policy isn’t reversed.”

A White House spokesperson was not immediately available to respond when contacted by CNBC.

Trump sent global markets into chaos on April 2, which he termed “liberation day,” unveiling tariffs on nearly every country and territory based on a calculation that economists roundly criticized as nonsensical. A blanket 10% tarrif on imported goods was imposed globally, while many countries faced much larger levies based on the U.S.’s trade deficit with them — a move Trump described as “reciprocal” despite the metric being unrelated to tariffs.

Within a few days that saw market mayhem, trillions of dollars of wealth erased, and a spike in U.S. treasury yields, Trump announced a 90-day pause on the larger tariffs but maintained the blanket 10% measure on all countries, including Washington’s closest allies, as well as prior 25% tariffs imposed on Mexico and Canada. He then increased levies on China, which had already responded with its own tariffs on U.S. goods.

The world’s two largest economies escalated the levies tit-for-tat, with the current U.S. tariff on Chinese imports at 145% and China’s tariff on U.S. imports at 125%. China has vowed to “fight to the end”; the Trump administration recently announced an exemption for Chinese-imported electronics, including smartphones.

Bolton agreed with Trump’s conviction that China should be held to account for what he described as unfair trade practices and violations, including intellectual property theft, protecting and subsidizing certain industries to create unfair competition, and “manipulating the World Trade Organization.”

“If you want to deal with that problem, certainly it would make sense to get together with Japan, Korea, Singapore, other Asian countries, the European countries, others around the world who have been victimized by China in the same way the U.S. has,” Bolton said.

“Instead, we’re having a war with our friends and really crippling our ability to deal effectively with China.”