Stung by the U.S. action, the allies quickly hit back. The E.U. said it would impose import taxes on politically sensitive items like bourbon from Senate Majority Leader Mitch McConnell’s home state of Kentucky. Mexico said it would levy tariffs on American farm products, while Canada zeroed in on the same metals that Trump had targeted.Capping the extraordinary day, Canadian Prime Minister Justin Trudeau revealed that he had rejected an ultimatum from Vice President Pence that any new North American trade deal be renewed at five-year intervals. …“It’s more than highly unusual. It’s unprecedented to have gone after so many U.S. allies and trading partners, alienating them and forcing them to retaliate,” said economist Douglas Irwin, author of a history of U.S. trade policy since 1763. “It’s hard to see how the U.S. is going to come out well from this whole exercise.”
Big-business groups were furious. The Business Roundtable issued a blistering statement, condemning the move: “The Administration’s decision to drop steel and aluminum tariff exemptions for America’s allies only worsens a self-inflicted wound on our economy and unnecessarily exposes U.S. exporters to foreign retaliation. While addressing global overcapacity of steel and aluminum is a worthy objective, using ‘national security’ arguments under Section 232 of the Trade Expansion Act of 1962 weakens the international trading system and encourages other nations to use ‘national security’ to place barriers against U.S. goods and services from entering their markets.” It predicted, “These tariffs and increased costs have already caused harm to U.S. businesses and workers.”
The Chamber of Commerce weighed in as well, predicting a total of 2.6 million lost jobs from Trump’s trade policies, which will stop the economic recovery in its tracks. CNN Money reported: “Tom Donohue, president and CEO of the business organization, issued the forecast in a memo to the board of directors Thursday that was obtained by CNNMoney. The memo, citing outside studies, adds the possible job losses from tariffs both threatened and enacted by the administration, plus a possible US withdrawal from NAFTA, the trade agreement with Canada and Mexico.” The chamber argued that leaving NAFTA would “kill as many as 1.8 million American jobs in the first year,” while “tariffs against China could cost 134,000 US jobs, steel and aluminum tariffs could cost 470,000 jobs, and tariffs on autos and auto parts could cost 157,000 jobs.” If these figures are in the ballpark, Trump’s tariffs may go down as the worst economic decision since Smoot-Hawley, of which the president apparently is ignorant. In total, the Wall Street Journal reported, “The Trump administration’s trade policies will hamstring the U.S.’s robust economic growth and threaten as many as 2.6 million jobs, according to a memo from the U.S. Chamber of Commerce’s top official on Thursday.”
The geographic and ideological breadth of opposition to imposing tariffs on our strongest allies was impressive. Moderate-conservative Republican senators from Tennessee, Bob Corker, chairman of the Senate Foreign Relations Committee, and Lamar Alexander, chairman of the Health, Education, Labor and Pensions Committee, both decried the decision. The Times Free Press reported:
Alexander called the move a “big mistake” while Foreign Relations Committee Chairman Corker charged it “represents an abuse of authority intended only for national security.” …Alexander warned the tariffs will raise prices “and destroy manufacturing jobs, especially auto jobs, which are one third of all Tennessee manufacturing jobs. I have urged President Trump to focus on reciprocity — do for our country what our country does for you — instead of imposing tariffs, which are basically higher taxes on American consumers.”Corker weighed in, saying, “imposing steel and aluminum tariffs on our most important trading partners is the wrong approach and represents an abuse of authority intended only for national security purposes.”He added that “if we truly want to level the playing field for American companies, we should be working with our friends and allies to target those actually responsible for tipping markets in their favor.”
Rep. Marsha Blackburn (R-Tenn.), who is running to succeed Corker, has been a major booster for Trump. She will now need to explain why tariffs are good for her state — or risk confronting Trump.
The Tennessee senators had an unusual ally, the fiery progressive Sen. Patrick Leahy (D-Vt.). In a written statement, he called out the president. “Slapping tariffs on three of our four largest trade partners would be bad enough, since retaliatory tariffs will erode demand for American exports. But the President incredibly is also acting without any plan to invest in American steel and aluminum workers here at home to take any advantage of this action,” he declared. “Canada is Vermont’s largest trading partner, and Vermonters stand to lose big under this ham-handed policy.”
A moderate Democrat, Sen. Ben Cardin (Md.), seemed fit to be tied. (“Alienating and strong-arming our friends and neighbors, ignoring consequences, disrupting markets and costing Americans money seems to be the norm for President Trump when it comes to trade and just about everything else,” he said in a statement. “What’s lacking in all this bluster is rational strategy of any kind. If there is one, I urge the president to share it with the American people. “)
Meanwhile, staunch conservative Sen. Ben Sasse (R-Neb.) was likewise apoplectic. “This is dumb. Europe, Canada, and Mexico are not China, and you don’t treat allies the same way you treat opponents,” he said. “We’ve been down this road before — blanket protectionism is a big part of why America had a Great Depression. ‘Make America Great Again’ shouldn’t mean ‘Make America 1929 Again.'” Sasse is not on the ballot in November, but his fellow Republican senator from Nebraska, Trump cheerleader Deb Fischer, is. She will have to explain to farmers why Republicans are potentially killing farmers’ access to foreign markets.
Trump’s decision is so awful on so many levels, from the perspective of so many people, that one has to wonder whether his aides are all mute sycophants. Did they not warn the president what the international and domestic reaction would be — or is he completely irrational at this point? If they had some spine and conservative principles, they’d quit in protest of this destructive directive. Don’t hold your breath.