Trump tariffs
Donald Trump might be about to discover that being a bully can backfire. There’s a strong sense the U.S. president’s reckless imposition of steel and aluminum tariffs at week’s end, on close allies Canada, Mexico and the European Union, seemed driven primarily by frustration. Trump’s pending threat of sanctions hadn’t forced the unilateral trade concessions that his administration was seeking from those trading partners.
Trump’s piqued tweets Friday, slamming Canada’s alleged highly-restrictive trade practices, reinforced the sense the U.S. president was unhappy he hadn’t gotten what he wanted in ongoing NAFTA negotiations or trade discussions with the EU.
Of course, Canada — for a country with highly-restrictive trade practices — has done well in forging trade deals with other partners in recent years, signing the Comprehensive and Progressive Agreement for Trans-Pacific Partnership with 10 other countries and Comprehensive Economic and Trade Agreement with more than 30 European nations.
Meanwhile, experts both outside and within the United States condemned Trump’s decision to impose tariffs — 25 per cent on steel and 10 per cent on aluminum — on Canada, Mexico and the EU, calling them foolish and ultimately counterproductive.
Republican Congressional leaders blasted their own party leader’s move as a huge mistake that would hurt Americans.
The reason seems obvious to everyone but the president. Since American steel and aluminum manufacturers currently can’t satisfy domestic demand, those higher-priced imports are inevitably going to mean higher prices for U.S. consumers. And retaliatory tariffs from Canada, Mexico and Europe will make affected U.S. exporters less competitive, threatening American jobs.
Of course, if Canada and others targeted by Trump have anything to say about it, the president’s tariffs will boomerang to hurt members of his own party.
Canada’s list of American products subjected to tit-for-tat tariffs as of July 1 were clearly selected to punish Republican Congressional leaders’ home states. With U.S. midterm elections this fall, Ottawa hopes those measures will have extra bite.
Prime Minister Justin Trudeau dropped his sunny ways rhetoric to lament, accurately, the White House doesn’t appear capable of common sense at the moment.
U.S. Commerce Secretary Wilbur Ross certainly sounded the part in arguing countermeasures being threatened by Canada and other nations were no big deal because the amounts involved were minor compared to the size of the entire U.S. economy.
By that reasoning, only a much bigger, more widely destructive trade war would give the U.S. administration pause. That’s a ludicrous position for a senior member of the administration.
A wider trade war will have no winners, despite Trump’s rhetoric. And Canada’s actions — putting the U.S. on notice of punishing counter-tariffs, but delaying their imposition — seems designed to give cooler heads inside the U.S. a chance to talk some sense to Trump, if that’s possible.
The irony is Trump has attacked allies when the real threat to fair international trade remains China and its government subsidization of many industries.