March 8, 2018 at 7:30 PM
PRESIDENT TRUMP went forward with planned tariffs of 25 percent for steel imports and 10 percent for aluminum Thursday, salting his announcement with extravagant rhetoric about the glories of the McKinley Tariff and trotting out selected steel and aluminum workers to express their gratitude for saving their jobs. Not present: autoworkers who might be having a hard time of things soon, when higher prices for their products’ biggest inputs start to kick in.
Mr. Trump said he would delay implementation of the tariff for metals from Canada and Mexico, pending their willingness to “make a deal ” to his liking on a revised North American Free Trade Agreement. Other countries with which we have “a security relationship,” an allusion to South Korea, Japan, Germany and others, will face immediate tariffs but will get a chance to “discuss alternative ways to address our concerns,” in return, potentially, for some tariff relief. Metal-consuming companies in the United States may also petition the Trump administration for carve-outs.
This mitigates the immediate harm. Still, the president has launched an experiment in zero-sum economics, both for domestic industries, whose lobbyists will compete with one another for favor, and other nations, which also will be expected to plead and wheedle for bureaucrats to grant them market access. How will decisions be made? The president seems to want help fighting global production overcapacity and contributing to the collective defense; what that means in practice will be up to him and his trade negotiator, Robert Lighthizer. What this impending lobby-o-rama has to do with draining the Washington swamp we do not know. We are certain that it has nothing to do with sound economic policy, which would facilitate the buying and selling of goods and services according to objective criteria, not political machinations.
What’s ugliest here is Mr. Trump’s relentless and indiscriminate assault on long-standing allies, many of which, he said, “treat us the worst.” To lump nations such as China together with, say, Canada or Germany, whose troops have shed blood together with the United States in Afghanistan (among other places), is unworthy of an American president. Yes, Canada is the largest supplier of both steel and aluminum imports (by volume) to the United States, but it bears repeating that the United States has an overall trade surplus with Canada. Canada’s economy and security apparatus have been thoroughly interconnected with those of the United States for generations — to this country’s immeasurable benefit.
Now this tried and true ally, which has actually dealt fairly with the United States, will be asked to beg for a permanent exemption to penalties for which there is no honest national security justification in the first place. Canada’s dependence on the U.S. market is such that it’s possible Mr. Trump’s squeeze will have its purported intended effect of forcing Canada to give ground in the NAFTA talks. He may see that as a victory. For the nation, it will be just the reverse. Insofar as they demonstrates to the world the risks of befriending America, and of dealing openly and honestly with us, Mr. Trump’s pressure tactics could have unintended negative consequences for years to come.