Trump stands firm on metal tariffs
President Trump this week insisted on pushing ahead with his plan to impose tariffs on steel and aluminum imports, despite fierce pushback from congressional Republicans, Wall Street, and the business community, and the resignation of his chief economic adviser, Gary Cohn. Taking even senior White House officials by surprise, the president last week announced across-the-board tariffs of 25 percent on steel and 10 percent on aluminum. He said the U.S. had been “mistreated” by other countries for decades, railed against America’s $375 billion trade deficit with China, and batted away concerns about retaliatory tariffs, tweeting: “Trade wars are good, and easy to win.” Wall Street registered its concern as stock prices dropped. Trump later signaled that major U.S. trade partners Canada and Mexico could be exempted if they accepted “fair” new terms for the North American Free Trade Agreement (NAFTA), which is currently being renegotiated.
GOP lawmakers reacted with a chorus of condemnation. House Speaker Paul Ryan warned that the tariffs would have damaging “unintended consequences,” while Senate Majority Leader Mitch McConnell said they risked provoking “a larger trade war.” Cohn, a former Goldman Sachs banker whose resignation was the latest in a string of White House departures (see Talking Points), had fiercely opposed new tariffs. European Commission President Jean-Claude Juncker threatened to impose retaliatory tariffs on U.S. products, including Harley-Davidson motorcycles, Kentucky bourbon, and Levi’s blue jeans. “We can also do stupid,” he said.
What the editorials said
Trump is making “the biggest policy blunder of his presidency,” said The Wall Street Journal. The tariffs will temporarily benefit a “handful” of steel and aluminum companies, and their 170,000 or so employees, by raising prices. But those price increases will heavily impact the companies that rely on the metals—which employ some 6.5 million Americans. Car manufacturers and other steel-intensive industries will shift their production lines abroad; prices for everyday goods such as beer and canned foods will rise; and other countries will inevitably respond with retaliatory tariffs on our biggest exports. As for the Trump administration’s “preposterous” claim that these tariffs are necessary because of “national security,” that’s an argument other countries will now “surely emulate.”
Another of the supposed “adults in the room” is gone, said The New York Times. Cohn’s chief accomplishment was helping engineer a tax cut that “will benefit wealthy people like himself,” but at least he fought against the president’s worst protectionist instincts. His exit proves that the “cranks and nationalists” in the White House—led by trade adviser Peter Navarro and Commerce Secretary Wilbur Ross—have won the battle for Trump’s ear.
What the columnists said
Employment at U.S. iron and steel mills has plummeted from 188,000 workers three decades ago to about 86,000 today, said Catherine Rampell in The Washington Post. But because of automation, we produce as much steel today as we did 30 years ago. Tariffs won’t bring many steel jobs back—so the president should stop offering false hope to the Rust Belt.
Despite all the hysteria, the proposed tariffs “will not end the world,” said Josh Bivens in The New York Times. Global steel and aluminum prices are artificially low because government-subsidized producers in China and other countries are creating “excess capacity.” Trump wants to “protect American metal producers” until this problem is addressed. The tariffs may also serve as big leverage in renegotiating NAFTA, said Liz Peek in TheHill.com. By dangling an exemption for Canada and Mexico, Trump could well “extract the kind of concessions that his predecessors failed to demand.”
Trade is the one issue on which Trump has always been consistent, said Paul Waldman in WashingtonPost.com. He sees it as a “zero-sum contest in which the only goal is exporting goods”—if the U.S. imports something from another country, that nation has “won,” and we’ve “lost.” This explains why Trump won’t be swayed by arguments about job losses and rising consumer prices: For him, that’s a small “price to pay” for restoring America’s “pride and dignity.” The president wants to show “that we’re big and strong, that nobody’s going to laugh at us”—whatever the cost.