PostEverything | Perspective
March 5, 2018 at 8:15 AM
Last week, President Trump had a lot of televised meetings during which he said a lot of reckless things. As a result, many people are saying that the president’s announcement of 25 percent tariffs on imported steel and 10 percent on aluminum will not necessarily come to pass.
A note of caution to the celebrating nationalists: If this rollercoaster process is how we got here, is this how it stays? Since there was no paper for the president to sign, when the lawyers go through it and Trump sees the reaction, does he still stick to 25 percent and 10 percent tariffs on everybody? We’re betting Trump sticks to his tariff numbers but don’t rule out carve outs for certain allies (even though Trump doesn’t want to). This fight is far from over.
Writing here at PostEverything, Zachary Karabell makes a similar point about Trump’s difficulties in, you know, following through on anything policy-related:
In the 13-plus months since Trump took office, there has been a wide gulf between the actions of the administration and his words, between the power the president believes he has and the power he has actually been able to wield.
He has been most successful to date in deregulating, which means not expanding the power of government. When he has attempted to act unilaterally, to define the powers of the presidency more expansively, he has met strong pushback from entrenched groups and institutions….
The naked assertion of executive power again shows Trump’s gift at putting himself in the center of any story. But there is a long road from trade-war tweets to actual trade-wars, and a long road to go before the stroke of a pen and the announcement of an action leads to the breakdown of a global system. Here as elsewhere, the casual upending of norms and the hell-with-it approach create uncertainty and cast the United States as an unreliable partner. As yet, however, much of what Trump has done has been halted, reversed, or watered down, and there is little reason to believe that these tariffs will fare any better. The sound and fury presidency remains alive and well, but whether it will signify much remains a very open question.
Even Trump’s most ardent protectionist allies in the administration sound a little dubious.
The hard-working staff here at Spoiler Alerts should be very sympathetic to these arguments. After all, Trump has been lying about how the global economy works for years now. Based on the last go-around on steel tariffs, not following through on his initial announcement would be way better than following through.
Furthermore, Karabell is correct to point out Trump’s weak presidency. Last week alone, we saw Trump run a meeting on gun regulation in which he advocated ignoring “due process” to seize guns and accused GOP senators of being in the pocket of the NRA. That was walked back quickly. Also this week, Attorney General Jeff Sessions pushed back hard against Trump’s rage-tweeting at him, which infuriated Trump even further.
Here’s the thing: As I feared a week ago, these tariffs are gonna happen. I seriously doubt there will be any scaling back. And contrary to the airy dismissals of advocates such as Wilbur Ross and Peter Navarro, they’re a big friggin’ deal.
The first thing to remember is that, unlike the transgender ban or the Muslim travel ban, Trump’s authority in this area is pretty clear-cut. One senior GOP congressional aide told Politico over the weekend, “When it comes to trade, that’s an executive power. There’s very little we can do.” [This didn’t used to be the case, but that’s a debate for another day.] I have no doubt that aggrieved actors may try to block this move in the courts, but I doubt they will experience even temporary relief. So once executive branch lawyers write up the tariffs, Trump can impose them.
The second thing to remember is that this is not an issue on which Trump’s beliefs are protean. Trump is not and never has been a fan of free trade, particularly multilateral free trade agreements like the World Trade Organization. Trump may be poorly informed on trade but his beliefs on this issue are very deep. As Swan reports, the president accused his anti-tariff advisers of being “globalists” as they were making their case.
Then there are Trump’s tweets:
It is tempting to analogize Trump’s move to the George W. Bush administration’s 2002 decision to raise steel tariffs by 30 percent. That policy folly ended after 18 months when the WTO ruled against the United States. The world trading system held 15 years ago. So maybe this move will also not be that big a deal.
The difference is that the retaliation against Bush was contained by the belief that steel was the exception and not the rule on his trade policy. Indeed, Bush’s chief trade negotiator Robert Zoellick linked the steel tariffs to Bush securing trade promotion authority to negotiate deals.
Furthermore, Trump is using a different component of U.S. trade law to justify the tariffs. The WTO was well within its purview to knock down Bush’s tariffs because they employed known safeguard provisions. Trump, by invoking a little-used national security provision, puts the WTO in a lose-lose situation on any case brought before it. If it rules against the administration, Trump may chose not to comply. If it supports the administration, then expect to see a lot more tariffs like this one exercised. “This is the golden loophole,” trade economist Gary Hufbauer told Time magazine: “Each country is entitled to define national security as it sees fit.”
Trump’s rhetoric matters here. His steel move seems like the opening shot, not the exception. It is certainly possible that major U.S. trading partners will abstain from escalation for self-interested reasons. But European Commission chief Jean-Claude Juncker already has announced some planned retaliatory measures: Harley-Davidson motorcycles, Kentucky bourbon and Levi’s blue jeans.
Indeed, Juncker’s explanation perfectly captures the spirit of trade policy in the age of Trump:
So now we will also impose import tariffs. This is basically a stupid process, the fact that we have to do this. But we have to do it. We will now impose tariffs on motorcycles, Harley Davidson, on blue jeans, Levis, on Bourbon. We can also do stupid. We also have to be this stupid.
These tariffs are going to happen. I seriously doubt there will be any exemptions for allies and partners. It’s basically a tax on consumers and corporate welfare for aluminum and steel producers. And the whole thing is very, very stupid.