ONCE AGAIN the siren song of protectionism is heard in the land, and this president has sounded its opening notes by announcing that his administration is imposing a 25-percent tariff on imported steel plus a 10-percent duty on foreign-made aluminum.
“You will have protection for the first time in a long while,” this president said to the consuming American public, “and you’re going to regrow your industries.” Where have we heard that long-discredited song before? Not since the Roaring Twenties, whose mighty roar soon enough turned into a squeal thanks to successive Republican administrations that adopted the wrong trade policies at the wrong time in order to appease the wrong interests.
American investors must know better than to swallow this president’s line of guff—because the Dow Jones Industrial Average responded to the president’s heady promises by falling some 586 points or a drop of some 2 percent first thing the next morning, then closing 420 points lower for the whole day. What a ride this has become.
The administration appeared confused and divided against itself as White House staffers ducked in and out of their offices in the West Wing trying to find out what the heck was going on. America’s erstwhile trading partners, now denounced as her enemies, rushed to open a second front in this a-borning trade war that President Trump has begun.
Even a member of the Republican leadership in Congress—Roy Blunt, the GOP senator from Missouri—sounded worried about how this wholly avoidable trade war would turn out. “I continue to be concerned,” he said, “about what other countries do in response” to this president’s ill-conceived initiative. “In our state,” Senator Blunt noted, “we make steel and aluminum, but we continue to buy a lot more than we make. Things like sheet aluminum that you use to make boats with—we make a lot of boats—it’s not available in the United States.”
Even the congressman from this state’s First Congressional District—Rick Crawford, who’s co-chair of the Congressional Steel Caucus—sounded reluctant to echo this president’s call to arms. And with good reason: His congressional district includes not one but two huge steel mills, Nucor-Yamato Steel near Blytheville and Big River Steel in Osceola. The mills might stand to benefit, however unfairly, from a tariff, but the First Congressional District is also home to hundreds of thousands of rural citizens who stand to suffer when other countries inevitably retaliate with tariffs on our agricultural exports. This president seems to have set off not only an international trade war but a civil war in terms of economic competition. His policy seems bereft of either rhyme or reason. More and more it comes to resemble just a jumble of tweets—a simple hissy fit masquerading as a serious policy initiative.
Sarah Huckabee Sanders, the White House press secretary, is doing her usual best to put a good face on all these confusing developments, claiming the president’s twists and
come as a surprise to anybody.” Because, she claims, the president has been talking about doing something like this “for decades,” and now was acting only because he was concerned about “Americans who have been forgotten about.” But he’s now remembered them in the worst way. It would have been better for them if they had stayed forgotten.
Is there any American ally and trading partner who isn’t joining the chorus of criticism directed at the president’s trade war? For example, Canada’s foreign affairs minister Chrystia Freeland pointed out that any “restrictions [on trade with her country] would harm workers, the industry and manufacturers on both sides of the border. The steel and aluminum industry is highly integrated and supports critical North American manufacturing supply chains . . . The United States has a $2-billion surplus in steel trade with Canada. Canada buys more American steel than any other country in the world, accounting for 50 percent of U.S. exports.”
EVEN SOME of those steel-makers that sought these new tariffs were doing very well indeed without them. Nucor alone reported earnings of $1.1 billion last year. These spoiled business types seem to be complaining even while carrying bags of money under both arms. These people don’t seem to have learned how to leave much more than well enough alone.
“Import taxes on steel and aluminum,” writes Christine McDaniel of George Mason University, “will raise the prices of those products, which in turn will raise the price of doing business for U.S. manufacturers. There are more people in U.S. manufacturing sectors that rely on steel than there are in the U.S. steel industry. In terms of the economics, the trade-off ” being pushed by this administration ” does not make sense.”
Economics used to be known as the dismal science, but this administration seems determined to make a tragicomedy of it. Readers of Arkansas’ Newspaper will need to keep watching, warily, in large part because it hurts too much to laugh.