Serving the High Plains
Serving the High Plains
Has the United States — which has generally been a champion of free trade since World War II — been the victim of unfair trading practices by other nations? Certainly. It’s neither new or particularly unusual for nations to subsidize industries to try to get footholds in world markets.
By example, over the past 20 years, China has gone from being a marginal maker of steel and aluminum to producing roughly half the world’s output of both metals — undercutting companies in other nations that can’t subsidize sales. This practice led the Obama administration to impose a series of penalties on China for so-called steel “dumping,” which led to China providing only about 2 percent of U.S. steel imports.
But instead of responding to unfair practices in a targeted way, President Donald Trump says he’ll impose a 25 percent tariff on imported steel and a 10 percent tariff on imported aluminum — across the board.
The sins of China are thus visited upon many of our closest allies, starting with Canada.
In a reflection of our two countries’ interconnected economies, especially in automaking, the nation to our north is both the top exporter to U.S. markets of steel and aluminum and the biggest importer of U.S. steel and aluminum. No wonder Canada called the tariffs “completely unacceptable.”
Already, European leaders have vowed that the European Union would respond to U.S. tariffs by imposing tariffs on such iconic American products as Levi’s jeans, Harley-Davidson motorcycles and Kentucky bourbon.
The Washington Post reported that the EU was quietly preparing to go even further, imposing tariffs that broadly target food and industrial imports, and more. This spurred Trump to warn that the U.S. would respond by imposing a retaliatory tax on auto imports from Europe and to tweet that “trade wars are good, and easy to win.”
It’s possible that this is just the sort of trade brinkmanship that Trump promised as a candidate and said would lead to a renegotiation of the North American Free Trade Agreement with Canada and Mexico as well as to other nations dropping obstacles to U.S. imports.
It’s also possible that in a year’s time, this will be barely remembered as a flap that blew over after face-saving political maneuvers.
But there is a reason so many U.S. leaders are horrified by Trump’s plan — and why his chief economic adviser, Gary Cohn, quit last week: There’s already bad blood between America and the rest of the world over the president’s rejection of the Paris climate accord and his abandonment of the Trans-Pacific Partnership trade deal. The U.S. imposing tariffs that punish our allies could trigger a global recession and a tectonic geopolitical shift favoring China, the world’s other economic superpower.
That the president’s stand against unfair trading practices appears likely to benefit the nation most responsible for trade transgressions is beyond perverse. But it is also deeply ominous.
A commander-in-chief who harms his nation while declaring he is protecting it is capable of even bigger mistakes. Everyone should hope that Republican lawmakers and Trump’s confidants and family members can talk the president off the tariff ledge.
— The San Diego Union-Tribune