A bad idea gets worse
President Trump isn’t backing off on his irrational proposal to impose tariffs on all imported steel and aluminum, potentially launching a global trade war.
On Monday, he threatened Canada and Mexico, two of our closest trading partners, that he wouldn’t budge on tariffs for them unless a “new and fair NAFTA agreement is signed.” The United States, Mexico and Canada are currently in the seventh round of talks over modernizing the 1994 North American Free Trade Agreement.
One of the reasons negotiations aren’t wrapping up is the fact that the U.S. has insisted on major changes, like a sunset clause and advantages for the struggling U.S. auto industry, that our trading partners find unacceptable.
Trump’s early-morning tweets won’t help.
The president’s determination to carry on with his ill-conceived tariff plan also won’t help stock indexes (which have been rattled), U.S. consumers (who can expect higher prices in the event of a trade war), or the Republican-dominated Congress, whose members have taken the rare step of pushing back against the president’s agenda.
“We are extremely worried about the consequences of a trade war and are urging the White House to not advance with this plan,” said AshLee Strong, spokesperson for House Speaker Paul Ryan, R-Wis.
Ryan, as well as other Republicans in both the House and Senate have expressed concerns that Trump’s tariff war will slow growth and blunt the possible economic stimulus from their $1.5 trillion tax cuts.
It will certainly do that, although that’s not the only reason to be concerned.
It’s not unusual for U.S. presidents to impose tariffs on certain imported products that are causing damage to American workers, and the U.S. Department of Commerce concluded as recently as January that low-cost imported steel was threatening the domestic steel industry. However, usually those duties are narrowly targeted to particular products from a country.
Trump is using the broadest of brushes, which puts the U.S. at odds with our international allies and possibly the World Trade Organization. Retaliatory tariffs from other nations could pull in a wide range of U.S. products and industries. That’s another reason why so many different groups and interests are urging the president to rethink his plans.
California has a lot to lose. While the state had about 5,500 steel workers in 2016, according to the Bureau of Labor Statistics, economists estimate we have about 100,000 workers who turn steel into other products, like auto parts. This latter group of workers is expected to lose out from Trump’s tariffs.
There’s a way to support U.S. workers, but this isn’t it. Congress needs to block the president’s bad trade policy.