fuagf: Thanks, I don't think JimLur and the other Trump lovers know what kind of fire that Trump is playing with. It would raise prices here which would mean less sales which would mean the other county would layoff more workers. Not good for anyone. But that is the Trump way. Fuck everyone else and he makes $$$$.
Manufacturing CEOs Push Border Tax During Meeting With Trump
"For Americans, Trump’s tariffs on imports could be costly"
by Shannon Pettypiece, Justin Sink, and Matthew Townsend
24 February,2017, 11:18 am AEDT
[...]
Taking part in a session on the workforce of the future, Liveris said there must be a “systemic fix” to address the shortage of workers prepared for jobs requiring skills in science, technology, engineering and mathematics.
“We have supply-side issues today,” he said, “half a million open STEM jobs that we can’t fill. We need to fill them with Americans.”
He also said community colleges need to provide more vocational training for “the noble trades,” which had been a priority of the Obama administration.
Trump has used previous meetings with companies to encourage corporate leaders to build their products in the U.S., offering tax breaks and lower regulation to bring down costs -- and warning that he wants to raise tariffs on products produced overseas.
BHP Holds Talks With Trump Amid Concerns on Tariffs, Climate by David Stringer
11 January,2017, 10:17 am AEDT 11 January,2017, 6:36 pm AEDT
* BHP CEO, chairman meet with president-elect in New York * Trump’s infrastructure pledges seen as positive for demand
Executives from BHP Billiton Geoff Healy, from left, Andrew Mackenzie, and Jack Nasser stand in the lobby of Trump Tower in New York, on Jan. 10, 2017, before meeting with President-elect Donald Trump. Photographer: Evan Vucci/AP Photo
Executives from BHP Billiton Ltd. .. https://www.bloomberg.com/quote/BHP:AU , the world’s biggest miner, met with President-elect Donald Trump for talks on the industry, as the incoming administration’s pledges to boost infrastructure spending lift metals and producers.
Chief Executive Officer Andrew Mackenzie and Chairman Jacques Nasser met Tuesday in New York with Trump and Vice President-elect Mike Pence to discuss subjects including the resources sector and BHP’s investments in the U.S., according to a statement Wednesday from the Melbourne-based company.
Mackenzie told investors at a November meeting that BHP hoped Trump’s administration would honor commitments by the U.S. to global climate change accords, while Nasser warned at the meeting over risks of any move by the president-elect to impose large tariffs on Chinese imports. The company declined to immediately provide details of specific issues discussed in Tuesday’s talks.
BHP is the largest overseas investor in U.S. shale, has offshore oil and gas assets in the Gulf of Mexico and is a partner with Rio Tinto Group in a copper project in Arizona. London-based Rio is seeking talks with Trump’s administration, CEO Jean-Sebastien Jacques said last month .. https://www.bloomberg.com/news/terminal/OH6MEF6TTDS9 .. in Melbourne.
Miners’ Boost
Trump’s signals that he could spend billions of dollars to rebuild U.S. infrastructure lifted metals and producers in the wake of his election, promising to bolster global demand and add to a commodities price revival driven in 2016 by stimulus in China. The Bloomberg World Mining Index has advanced about 4.6 percent since Trump’s victory in November, while the London Metal Exchange Index of six key metals jumped about 6 percent.
BHP stock rose 2.6 percent in Sydney on Wednesday to the highest close since Dec. 13.
While Trump has promised to build roads, bridges and airports, the U.S. remains a smaller metals consumer and less reliant on imports than China. A 10 percent surge in U.S. copper demand would be equivalent to just a 1.5 percent gain in consumption in China, the world’s No. 1 user of commodities, UBS Group AG estimates.
How the new ‘electronics ban’ serves the Trump agenda
"For Americans, Trump’s tariffs on imports could be costly"
By Ishaan Tharoor March 22 at 1:00 AM
Travelers around the world woke up on Tuesday to an alarming new development: a new edict from the Transportation Security Administration, the American agency that administers security at airports, clamping down on the electronic devices many jet-setters take for granted.
[...]
The answer, critics suggest, is that the electronics ban is not about security.
“Three of the airlines that have been targeted for these measures — Emirates, Etihad Airways and Qatar Airways — have long been accused by their U.S. competitors of receiving massive effective subsidies from their governments,” wrote political scientists Henry Farrell and Abraham Newman. “These airlines have been quietly worried for months that President Trump was going to retaliate. This may be the retaliation.”
Farrell and Newman suggested Tuesday’s order is an example of the Trump administration “weaponizing interdependence” — using its leverage in a world where American airports are key “nodes” in global air travel to weaken competitors. My colleague Max Bearak detailed how this could be a part of Trump’s wider protectionist agenda. In February, President Trump met with executives of U.S. airlines and pledged that he would help them compete against foreign carriers that receive subsidies from their home governments.
“A lot of that competition is subsidized by governments, big league,” said Trump at that meeting. “I’ve heard that complaint from different people in this room. Probably about one hour after I got elected, I was inundated with calls from your industry and many other industries, because it’s a very unfair situation.”
"For Americans, Trump’s tariffs on imports could be costly"
Trump didn't start the fight over Canadian softwood lumber
Updated by Alexia Fernández Campbell@AlexiaCampbellalexia@vox.com Apr 25, 2017, 5:10pm EDT
NurPhoto/Getty Images
For 35 years, the US and Canada have been locked in an endless fight about imported lumber — a cycle of tariffs and truces that has repeated itself under every president since Ronald Reagan.
President Donald Trump, though, has found a way to use this otherwise mundane issue for political gain.
But this is hardly a trade war. It’s more like the latest chapter in a long-simmering squabble between siblings — a squabble Trump has seized on because it fits his political narrative.
Here’s how the cycle goes. The American lumber industry periodically gets upset that it can’t compete with cheap Canadian softwood imports. It files an unfair trade case with the Commerce Department. Commerce prepares to levy tariffs on Canadian softwood lumber imports. Then both countries negotiate a truce, which usually involves Canada limiting timber exports to the United States. The truce expires, and everything starts over again.
Since the 1980s, the complaint-tariff-truce cycle has repeated itself six full times. We’re now somewhere in the seventh cycle.
“It never ends; it’s like Groundhog Day,” says Ben Cashore, director of the Program on Forest Policy and Governance at Yale University. Cashore had been researching this dispute for years, he says, until he realized that it would go on forever. “I thought there had to be a better use of my time.”
The big difference this time around is the politicization of the spat. Presidents and Cabinet members don’t normally publicize their response to such a mundane trade dispute.
But Trump’s campaign was defined by blaming free trade for American job losses and economic woes, so his administration’s decision to publicize the move is a political calculation: It makes his team appear to crack down on trade abuses, even though it’s just more of the same.
The administration will likely use the lumber issue, as well as a dispute over dairy, as leverage in upcoming NAFTA negotiations. And acting to protect the American lumber industry gives Trump an easy victory to claim before his 100th day in office this week. If history holds, though, the most likely outcome is a truce during NAFTA negotiations.
The United States imports billions of dollars in products from Canada
Compared to US trade with other countries, the trade deficit between the United States and Canada is relatively small .. https://ustr.gov/countries-regions/americas/canada : The US imports about $15 billion more worth of Canadian goods than it exports. That’s because Canadian businesses and consumers are a major market for US goods, and in 2015 they bought about $289 billion worth of American products.
Most of the trade between both countries involves vehicles and machinery, but agriculture is big too. Canadian softwood lumber mills rely heavily on exports to the United States, where real estate developers in turn rely on Canadian lumber to build homes. In 2016, Canada’s softwood lumber exports to the United States were worth $5 billion. About a third of the softwood timber available in the United States comes from Canadian forests.
But backlash from the US lumber industry has been fierce, particularly because US companies have a hard time competing with a country that has such an abundant amount of timber on public lands.
American lumber producers believe Canada is unfairly subsidizing its lumber industry by selling timber from its vast public forests to Canadian producers at a very low price. If the government auctioned its timber at market rates, it would cost sawmills more money, and therefore even out the playing field. In the United States, the right to harvest timber on public lands is sold to the highest bidder.
Canadian trade officials have always disputed this claim, saying that the companies get a low price because they also build roads, prevent forest fires, and provide other free maintenance on public lands, so the cost of the United States needs to include the cost of those services.
The difference between this trade fight and those with other countries, like China, is that quite a lot of money is involved, says Chad Bown a senior fellow at the Peterson Institute for International Economics in Washington, DC. The United States imports about $5 billion a year in Canadian softwood lumber. A 20 percent tariff would bring in a lot of money, Bown says, assuming it doesn’t slow down trade too much.
“A billion dollars is a lot of tariff revenue,” he says. Of course, Canada will probably put up a fight, as history shows.
The lumber fight dates back to 1982
The lumber dispute has easily become the thorniest trade issue between the United States and Canada, and many economists believe it goes back to the colonial era.
It really started to heat up, though, in 1982, when the American lumber industry first asked the Department of Commerce to take action against Canadian sawmills. They said the Canadian government was unfairly subsidizing Canadian lumber companies, and that, in turn, was hurting American sawmills. The Commerce Department rejected those claims.
But the second time around, in 1986, the lumber industry succeeded. Commerce prepared to levy a 15 percent tariff on imports. It never happened because both countries came to an agreement: Canada would impose a 15 percent tariff on softwood lumber exports. That lasted a few years, until Canada decided to back out of the agreement in 1991, arguing that it had raised logging prices for Canadian companies.
The US timber industry, which employs about 90,000 people, fought back once again and filed a claim with the Commerce. After back-and-forth negotiations, both countries came to an agreement in 1996, which set a quota on Canadian lumber imports to $14.7 billion a year, tariff-free.
That led to a third case before the Commerce Department, which eventually led to a five-year trade deal in 1996 that merely limited Canadian lumber imports to $14.7 billion per year. That deal expired in 2001.
But in 2002, the Commerce Department levied a 27 percent tariff on Canadian lumber, and Canada took the case all the way to the World Trade Organization. After years of arguing, the two countries finally reached a deal in 2006. The United States returned $4 billion (out of the $5 billion) in tariffs it had collected from Canada since imposing the tariff in 2002. In return, Canada began restricting its lumber exports again. As part of the deal, US timber producers couldn’t file any more cases until one year after the deal expired, which was in October 2016.
They waited two months before filing another unfair subsidy case with the Department of Commerce. The cycle begins again — this time with Trump as the incoming president.
Canadian leaders and US homebuilders are not happy
It couldn’t have surprised Canada that the Department of Commerce would side with the US timber industry — it almost always does. But that doesn’t mean Canada is okay with the decision.
In a statement .. https://www.ft.com/content/525756a0-2943-11e7-9ec8-168383da43b7 .. to the Financial Times, the country’s ministers of natural resources and foreign affairs highlighted the harm it would do to Americans. “This decision will negatively affect workers on both sides of the border, and will ultimately increase costs for American families who want to build or renovate homes,” they said in a joint statement.
And it’s true, a 20 percent tariff on Canadian lumber will raise construction costs for US homebuilders.
The National Association of Home Builders says American mills do not produce enough lumber to meet demand. “Home builders need a consistent, reasonably priced supply of lumber to keep housing affordable for hard-working American families,” said NAHB chair Granger MacDonald in a statement released Monday.
So far, the whole dispute is unfolding just as it has before. The big difference, though, is that the president wants all the credit for it.
EU Promises Trade War If Trump Imposes Steel Restrictions
"For Americans, Trump’s tariffs on imports could be costly"
By David Francis July 7, 2017 - 11:42 am david.francis @davidcfrancis
The results of the Trump administration’s investigation into whether steel imports represent a national security threat are expected any day now, and could open the door to restrictions on U.S. imports — and spark conflict with the world’s biggest economic bloc.
Ostensibly, the object of the administration’s review of steel and aluminum trading practices is China, notorious for dumping cheap steel on global markets. But trade experts have repeatedly explained that any new restrictions on steel imports into the United States would actually hurt countries like South Korea, Germany, and Canada — not Beijing, which is already hamstrung by a spate .. http://foreignpolicy.com/2017/06/12/trumps-trade-restrictions-could-miss-china-and-slam-everybody-else/ .. of trade restrictions.
According to media reports, nearly all of Trump’s advisers have warned against against any additional steel import tariffs or quotas. That disharmony within the administration has delayed the conclusion of the security review.
In addition to aiming at the wrong target, and angering big trade partners, such tariffs would raise costs for millions of U.S. consumers and thousands of U.S. manufacturers. But a small cadre of economic nationalists close to Trump are urging him to take advantage of the Cold War-era trade rules to protect a relatively small U.S. industry.
Commerce Secretary Wilbur Ross is almost done with his multi-month inquiry into whether steel imports put national security at risk. He has argued that large steel imports from foreign sources makes the United States vulnerable because it undermines the domestic steel industry. (The Pentagon has never expressed much concern about foreign steel undercutting U.S. defense needs, but foreign aluminum is a different matter.)
The potential spat over steel added yet another contentious issue to the G20 meeting which was already tense because of Trump’s decision to leave the Paris climate agreement, making the United States one of only three countries outside that pact. But creeping trade protectionism, and what seems to be a deliberate abdication by the Trump administration of a commitment to global free trade, is concentrating minds in Hamburg — especially for European leaders who can recall the disastrous consequences of protectionism and autarky.
“It’s up to us to avoid such things as protectionism, this very simple thing. That would be wrong,” Juncker said.
Trump Plans Tariffs on Steel and Aluminum and Markets Slump
"For Americans, Trump’s tariffs on imports could be costly"
By ANA SWANSONMARCH 1, 2018
A steel furnace in Germany. At a White House meeting on Thursday, President Trump said that he did not want any nation to be exempted from the order.
Credit Alexander Koerner/Getty Images
WASHINGTON — President Trump said on Thursday that he will impose stiff tariffs on imports of steel and aluminum, thwarting some of his top pro-trade advisers and rattling stock markets as the prospect of a global trade fight loomed.
Mr. Trump said he would formally sign the trade measures next week and promised they would be in effect “for a long period of time.” The measures would impose tariffs of 25 percent on steel and 10 percent on aluminum.
The tariffs are expected to apply to all countries, according to an industry executive briefed on the president’s plans. At a White House meeting on Thursday, Mr. Trump told a group of executives that he did not want any nation to be exempted from the order, arguing that if one country was exempt, all other countries would be in line to ask for similar treatment, the executive who attended the meeting said. The president also argued that metals could end up being shipped to the United States through exempted countries.
The trade action stems from a Commerce Department investigation that concluded imported metal threatens national security by degrading the American industrial base.
“People have no idea how badly our country has been treated by other countries,” Mr. Trump said as he made the announcement. “They’ve destroyed the steel industry, they’ve destroyed the aluminum industry, and other industries, frankly.”
“We’re bringing it all back,” he added.
Stocks fell as Mr. Trump made his comments about tariffs, with declines in the industrial sector outpacing the overall market. The Standard & Poor’s 500 industrial sector was down more than 2 percent, compared with the overall benchmark index, which was down a bit less than 1 percent as of around 1:30 p.m. Shares of Boeing and of American automakers, all large consumers of steel and aluminum, declined. Sales for Boeing, the country’s largest exporter, could be hurt as other nations retaliate against tariffs from the United States.
The announcement capped a frenetic and chaotic morning inside the White House as Mr. Trump summoned more than a dozen executives from the steel and aluminum industry to the White House, raising expectations that he would announce his long-promised tariffs.
- Donald J. Trump @realDonaldTrump
Our Steel and Aluminum industries (and many others) have been decimated by decades of unfair trade and bad policy with countries from around the world. We must not let our country, companies and workers be taken advantage of any longer. We want free, fair and SMART TRADE! 11:12 PM - Mar 1, 2018 -
However, the legal review of the trade measure was not yet complete and, as of Thursday morning, White House advisers were still discussing various scenarios for tariff levels and which countries could be included, according to people familiar with the deliberations. Just an hour before Mr. Trump made his remarks, a White House spokeswoman said that no announcement was expected that morning.
Advisers have been bitterly divided over how to proceed on the tariffs, including whether to impose them broadly on all steel and aluminum imports, which would ensnare allies like the European Union and Canada, or whether to tailor them more narrowly to target specific countries.
Gary D. Cohn, the director of the National Economic Council, had been lobbying for months alongside others, including Defense Secretary Jim Mattis and Rob Porter, the staff secretary who recently resigned under pressure from the White House, to kill, postpone or at least narrow the scope of the measures, people familiar with the discussions said.
The departure of Mr. Porter, who organized weekly trade policy meetings and coordinated the trade advisers, has helped fuel a chaotic situation in which opposing trade factions are no longer kept in check. The situation had descended into an all-out war between various trade advisers, people close to the White House said.
The White House has come to the brink of announcing steel and aluminum tariffs several times in the past eight months, including last June. In recent days, the president appears to have grown impatient for action.
In the past few days, supporters of the tariffs have also begun airing televised ads during programs that Mr. Trump has been known to watch. One such ad ran on Fox News just minutes before the president’s tweet on Thursday morning.
The tariffs have also divided industries, workers and policymakers. American manufacturers of steel and aluminum are among those pushing the White House to take action against cheap imports, which they say have hurt their ability to compete. But American companies that use steel and aluminum in their products, including automakers and food packagers, say that tariffs would raise their costs, eating into their profits or forcing them to raise prices for consumers or lay off workers.
Scott Paul, the president of the Alliance for American Manufacturing, which represents steel companies and workers, said the president made “an encouraging show of support” on Thursday morning but that now was the time for him to act.
“The president’s enforcement action must be broad, robust and comprehensive,” Mr. Paul said. “We urge the president to stand by our nation’s steel communities.”
Roy Hardy, the president of the Precision Metalforming Association, which represents metalworking companies, said the tariffs would imperil “the U.S. manufacturing sector, and particularly downstream U.S. steel and aluminum consuming companies.” He argued that companies that use steel to make their products employ many times more Americans than the domestic steel industry.
Mr. Trump’s announcement seemed likely to tip off a period of fierce lobbying by foreign governments and multinational companies who will argue that their products should be exempted from any sanctions.
The tariff could have very different economic and political consequences, depending on which countries are ultimately affected. Though the president has often criticized China for dumping cheap metals, American restrictions on Chinese steel and aluminum mean the country actually exports little of the products to the United States currently.
Instead, the bulk of American metal imports are supplied by allies. Canada, Brazil, South Korea and Mexico were the largest suppliers of steel to the United States in 2016, while Canada, Russia and the United Arab Emirates shipped the largest share of aluminum imports.
Tadaaki Yamaguchi, a Japanese steel executive and the chairman of the Japan Steel Information Center, called a 25 percent across-the-board tariff “ill-advised and naïve.”
“It will inevitably invite retaliation from America’s most reliable allies, ultimately hurting American non-manufacturing industries as well,” he said.
The Commerce Department investigation, which was started under an obscure measure of the trade law called Section 232, has focused on whether imports were compromising American national security by degrading the industrial base. In a report released to the public in February, the department concluded that imports were a national security threat.
Trade lawyers have been particularly concerned about the tariffs because they revolve around national security concerns, which legal experts describe as the “nuclear option” of trade. The United States has not used Section 232 to carry out a trade investigation since 2001, and those investigations have only resulted in trade barriers twice in the law’s nearly 40-year history .. https://piie.com/commentary/op-eds/trump-new-kind-protectionist-he-operates-stealth-mode .
The World Trade Organization provides substantial leeway for countries to pursue trade measures in their national security interest, but few countries have tested the extent of those permissions.
Trade experts worry that other countries could follow the United States’ lead and begin using national security concerns to justify a variety of protectionist measures aimed at shutting their industries off from foreign competition. China also uses national security as a justification for trade measures that American industry opposes, like requiring technology companies to store consumer data within Chinese borders.
Alternately, the World Trade Organization could end up ruling against the measures. That might feed an opinion already popular in the Trump administration that the organization seeks to compromise American sovereignty, and lead to its ultimate demise.
Eswar Prasad, a professor of international trade at Cornell University, said the action portended “a period of open and aggressive trade hostilities with some of America’s major trading partners” and threatened to undercut the rules of the World Trade Organization, which the United States itself was instrumental in forming.
Donald Trump's tariffs not great for Australia, but terrible for the US
"For Americans, Trump’s tariffs on imports could be costly"
By business reporter Stephen Letts
Updated about an hour ago
Key points:
* Donald Trump proposes a 25pc tax on imported steel and 10pc tax on imported aluminium
* Canada and the EU are the biggest exporters of steel and aluminium to the US. Australia and China are much smaller players
* Manufacturers, farmers and the military oppose the tariffs, Mr Trump says they will boost "national security & jobs"
[...]
The US Commerce Department plugged the plans for a 25 per cent tariff on steel imports and 10 per cent on aluminium into its modelling and found, just for starters, the idea was bad for national security because it weakens domestic manufacturers who supply among other things, the US military.
"In plain language, these tariffs are a terrible idea," said Tom Porcelli, US chief economist with the investment bank RBC.
"In fact it is such a terrible idea that there was talk amongst the GOP [Republican Party] today about pulling some of the President's unilateral trade authority."
As Kansas-based Republican chairman of the House Agriculture Committee Pat Roberts said: "Every time you do this you get retaliation [and] agriculture is the number one target."
"I think this is terribly counterproductive for the agriculture economy."
Watch out soybean and other croppers who rely on exports to China and the EU for a large part of their livelihoods. Revenge can be served with pulses and grain too.
What kind of victory can he claim? In the 20 months since the tariffs were imposed, the steel industry has consolidated. Some ailing steel firms, such as National Steel and Bethlehem Steel, have been gobbled up by larger competitors. The industry's largest union, the United Steel Workers of America, has agreed to more flexible work practices, profit-sharing and even some redundancies in order to give its remaining members a fighting chance of saving their jobs. Just as important, demand for steel is picking up: the world may face a supply shortage and a price spike next year, predicts World Steel Dynamics, a research firm.
All of this has happened since the tariffs were introduced, but did any of it happen because they were introduced? Gary Clyde Hufbauer of the Institute for International Economics (IIE), a Washington think-tank, warns against the post hoc ergo propter hoc fallacy. That won't bother Mr Bush, who is not known for his command of Latin. He is claiming full credit for the changes wrought in the steel industry since his tariffs were imposed. But if anything, the tariffs simply delayed the inevitable. By artificially raising the price of steel, they added to the profits of ailing firms, making them more expensive to acquire. Europe went through a similar round of mergers a decade or more ago without the help of tariffs.
Trump hits Canada, Mexico, EU with steel and aluminum tariffs
"For Americans, Trump’s tariffs on imports could be costly"
by Jeremy Diamond and Julia Horowitz @CNNMoney May 31, 2018: 10:21 AM ET
Trump hits Canada, Mexico, EU with steep tariffs President Trump is imposing steep tariffs on steel and aluminum from three of America's biggest trading partners — Canada, Mexico and the European Union.
The trade penalties, 25% on imported steel and 10% on imported aluminum, take effect at midnight, Commerce Secretary Wilbur Ross told reporters Thursday.
The announcement immediately raised the risk of retaliatory tariffs against American products.
Trump announced worldwide steel and aluminum tariffs in March but granted exemptions to some major trading partners.
Canada, Mexico and the EU were among the countries granted relief while the United States pursued negotiations to address the administration's concerns about the state of domestic steel and aluminum production. Those negotiations had a Friday deadline.
Trump's decision could raise prices for Americans on a range of everyday products. It could also place the United States in a trade dispute on more than one front. The administration is separately moving ahead with tariffs on Chinese goods.
Trump imposed the steel and aluminum penalties under a 1962 law that gives the president broad power to increase or reduce tariffs on goods deemed critical to national security.
"We take the view that without a strong economy, you cannot have strong national security," Ross told reporters.
Trump's announcement lifted American steel and aluminum stocks because those companies stand to benefit from penalties against their foreign competitors. U.S. Steel climbed 3%. But the broader market sank because of trade war fears. The Dow fell about 200 points.
"Should restrictions be imposed on Canadian steel and aluminum products, Canada will take responsive measures to defend its trade interests and workers," Canadian Foreign Minister Chrystia Freeland said in March.
The NAFTA talks were one factor in the administration's decision to grant exemptions to Canada and Mexico from the steel and aluminum tariffs. But Ross said Thursday that those talks "are taking longer than we hoped."
The Chinese government said the announcement was "obviously in violation of the consensus reached in Washington recently by both China and the United States." Both parties had previously said that tariffs would be put on hold as talks continued.
Ross is scheduled to go to China this weekend for a third round of negotiations.
The United States is also exploring the possibility of putting new tariffs on cars ,, http://money.cnn.com/2018/05/23/news/economy/trump-car-truck-tariffs/index.html?iid=EL . Last week, The Trump administration announced an investigation into whether automobile imports are hurting US national security, laying the groundwork for another trade fight.
"For Americans, Trump’s tariffs on imports could be costly"
Trump has perverted the process and undermined U.S. credibility. Paul Krugman
By Paul Krugman Opinion Columnist Sept. 20, 2018
President Trump has imposed tariffs, seemingly on whim, on about $300 billion worth of imports.CreditCreditDoug Mills/The New York Times
In normal times, Donald Trump’s announcement of tariffs on $200 billion worth of Chinese goods, bringing us closer to an all-out trade war, would have dominated headlines for days. Things being as they are, it was a below-the-fold story, drowned out by all the other scandals underway.
Yet Trump’s tariffs really are a big, bad deal. Their direct economic impact will be modest, although hardly trivial. But the numbers aren’t the whole story. Trumpian trade policy has, almost casually, torn up rules America itself created more than 80 years ago — rules intended to ensure that tariffs reflected national priorities, not the power of special interests.
You could say that Trump is making tariffs corrupt again. And the damage will be lasting.
Until the 1930s, U.S. trade policy was both dirty and dysfunctional. It wasn’t just that overall tariffs were high; who got how much tariff protection was determined through a free-for-all of horse-trading among special interests .. http://www.nber.org/papers/w5510 .
The costs of this free-for-all went beyond economics: They undermined U.S. influence and damaged the world as a whole. Most notably, in the years after World War I, America demanded that European nations repay their war debts, which meant that they had to earn dollars through exports — and at the same time America imposed high tariffs to block those necessary exports.
This U.S. innovation became the template for a global trading system, culminating in the creation of the World Trade Organization. And tariff policy went from being famously dirty to remarkably clean.
Now, the creators of this trading system knew that it needed some flexibility to remain politically viable. So governments were given the right to impose tariffs under a limited set of circumstances: to give industries time to cope with import surges, to respond to unfair foreign practices, to protect national security. And in the U.S. the power to impose these special-case tariffs was vested in the executive branch, on the understanding that this power would be used sparingly and judiciously.
But the pure economic impact is only part of the story. The other part is the perversion of the process. There are rules about when a president may impose tariffs; Trump has obeyed the letter of these rules, barely, but made a mockery of their spirit. Blocking imports from Canada in the name of national security .. https://www.nytimes.com/2018/08/12/us/politics/trumps-tariffs-foster-crisis-at-the-wto.html ? Really?
Even the big China announcement, supposedly a response to unfair Chinese trade practices, was basically a put-up job. China is often a bad actor in the international economy. But this kind of retaliatory tariff is supposed to be a response to specific policies, and offer the targeted government a clear way to satisfy U.S. demands. What Trump did was instead to lash out based mainly on a vague sense of grievance, with no end game in sight.
In other words, when it comes to tariffs, as with so many other things, Trump has basically abrogated the rule of law and replaced it with his personal whims. And this will have a couple of nasty consequences.
First, it opens the door for old-fashioned corruption. As I said, most of the tariffs are on inputs into business — and some businesses are getting special treatment. Thus, there are now substantial tariffs on imported steel, but some steel users — including the U.S. subsidiary of a sanctioned Russian company — were granted the right to import steel tariff-free .. https://www.vox.com/2018/8/29/17796376/trump-commerce-steel-tariff-waiver-exemptions . (The Russian subsidiary’s exemption was reversed after it became public knowledge, with officials claiming that it was a “clerical error.”)
[Hmm, in light of the Mueller investigation? getting the sanctions lifted was a prime Russian wish.]
So what are the criteria for these exemptions? Nobody knows, but there is every reason to believe that political favoritism is running wild.
Beyond that, America has thrown away its negotiating credibility. In the past, countries signing trade agreements with the United States believed that a deal was a deal. Now they know that whatever documents the U.S. may sign supposedly guaranteeing access to its market, the president will still feel free to block their exports, on specious grounds, whenever he feels like it.
In short, while the Trump tariffs may not be that big (yet), they have already turned us into an unreliable partner, a nation whose trade policy is driven by political cronyism, and which is all too likely to default on its promises whenever it’s convenient. Somehow, I don’t think that’s making America great again.
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