The president’s farm bailout
U.S. automakers breathed a bit easier Wednesday after President Trump and European Commission President Jean-Claude Juncker announced an agreement to shelve threatened U.S. tariffs on imported autos and retaliatory European tariffs while the two sides negotiate lower trade barriers. And if the episode eventually produces a true free-trade agreement between Europe and the United States, it will be a win for businesses, workers and consumers on both sides of the Atlantic.
But it wouldn’t validate the methods Trump has used to try to change our trading partners’ practices. It’s not just the bullying of U.S. allies and the blatant violations of existing trade deals that are troubling. It’s his unilateral moves to launch, intensify and sustain these trade fights, picking winners and losers in the United States along the way, which betray a dangerously expansive and abusive view of executive power.
Consider the steps the administration has taken, free of congressional review or intervention, to try to reduce China’s enormous trade surplus with the United States.
First, it imposed 25% tariffs on $34 billion worth of Chinese industrial goods on July 6 as punishment for that country’s “unreasonable or discriminatory” policies on technology and intellectual property. It has also teed up tariffs on an additional $16 billion in Chinese goods to dampen China’s ambition to dominate important new technologies. But those are just the appetizers: Trump has threatened to impose tariffs on every Chinese item that Americans import.
China responded by slapping tariffs on an equal amount of U.S. goods. Canada, Mexico, the European Union and other trading partners hit with Trump tariffs have done the same, targeting with especial vehemence U.S. producers in states that supported Trump, such as Midwestern farmers and manufacturers.
With blowback rising in this country, the administration sought to ease the pain by dipping into taxpayers’ pockets, again with no review by Congress. On Tuesday the U.S. Department of Agriculture announced it was borrowing $12 billion from the Treasury to support some (but not all) of the farmers whose exports have stalled and prices have dropped in the face of Chinese tariffs. And just farmers — not, say, Mid-Continent Nail, the U.S. fastener manufacturer whose business has been racked by Trump’s tariffs on imported steel. Even lawmakers who share Trump’s “America First” view of trade should be outraged at the president using tax dollars to pick winners and losers.
As for Europe, it’s worth remembering that the U.S. and the EU were negotiating a free-trade pact before Trump declared his distaste for multilateralism. Now the negotiations seem back on track, albeit with far more drama. But trade relations with China and the rest of the world are still in turmoil. At some point soon, Congress needs to wake up and reclaim the authority it gave the White House over tariffs.