Donald Trump believes that “trade wars are good and easy to win.” Mr. Smoot and Mr. Hawley were unavailable for comment.
Meanwhile, our trading partners are lining up, itching to retaliate.
“When a country (USA) is losing many billions of dollars on trade with virtually every country it does business with, trade wars are good, and easy to win,” Trump said on Twitter on Friday.
In a later social media post, Trump said his aim was to protect U.S. jobs in the face of cheaper foreign products.
“We must protect our country and our workers. Our steel industry is in bad shape. IF YOU DON’T HAVE STEEL, YOU DON’T HAVE A COUNTRY!” he wrote.
Many economists say that instead of increasing employment, price increases for consumers of steel and aluminum such as the auto and oil industries will destroy more U.S. jobs than they create.
Trump’s beliefs are not only simple-minded, they are delusional. We are the third-largest producer of steel in the world already. The huge steel mills of the 1960s have been shuttered for decades — barely a memory. Instead, the U.S. specialty steel industry is the marvel of the industrialized world. Plants that might have employed 2000 workers 50 years ago employ 200 today. Everything is automated. It’s the only way to produce steel cheaply enough to compete in the global marketplace.
Tariffs are not going to raise those U.S. steel plants from the dead. They are gone forever and the jobs with them. The few thousand jobs that might be saved or created by the tariff will be offset by tens of thousands of jobs lost in the export sector of our economy when other nations retaliate.
And you can bet on that:
Major U.S. trade partners are likely to hit back.
Europe has drawn up a list of U.S. products on which to apply tariffs if Trump follows through on his plan.
“We will put tariffs on Harley-Davidson, on bourbon and on blue jeans – Levi’s,” European Commission President Jean-Claude Juncker told German television.
Trump’s threats to unleash a trade war over steel crushed any hopes of substantial progress in current talks with Canada and Mexico to rework the North American Free Trade Agreement
Canadian Prime Minister Justin Trudeau said any U.S. tariffs on steel and aluminum imports would be“absolutely unacceptable” and vowed to continue to engage with U.S. officials on the issue.
The International Monetary Fund also expressed concern about the proposed tariffs and said they likely would damage the U.S. economy as well as the economies of other nations.
Trump’s announcement came after what one person with direct knowledge of the discussions described as a night of“chaos” in the White House due to frequent switching of positions in the administration.
Earth to Trump: No one wins a trade war. Ever. Trump’s tariffs will be a net drag on the U.S. economy, perhaps even negating the effects of the tax cut.
And Republican politicians, who have spent their careers promoting free trade, are mostly silent about this violation of conservative principles.