How they see us: Preparing for a misguided trade war
The U.S. president doesn’t understand basic economics, said Peru’s AltaVoz.pe in an editorial. Two centuries after Scottish economist Adam Smith demonstrated in The Wealth of Nations that mercantilism hurts economies, while free trade lifts everyone, Donald Trump has gone full protectionist. He promised a tariff of 25 percent on imported steel and 10 percent on aluminum last week, and when economists warned such measures would trigger a trade war, Trump tweeted, “Trade wars are good, and easy to win.” The president apparently believes that having a trade deficit with a country like China is a bad thing for the U.S.—even though the U.S. has imported more than it has exported for four decades, during which its economy has tripled in size. At a time “when even the Communist parties of Asia have accepted the advantages of global trade,” it’s baffling to see a Western leader so clueless.
Trump’s pledged tariff hikes are an “American assault on the rules-based global trading system,” said Lawrence Herman in The Globe and Mail (Canada). The president is trying to skirt World Trade Organization rules by claiming that lower-cost steel and aluminum imports are a threat to national security, because they undermine the American factories that might produce metals for tanks and ships in a time of war. But the WTO’s national security exemption is supposed to be invoked only in wartime or during national emergencies, and by abusing the system Trump is inviting other countries to play dirty. Global trade rules were crafted over decades “to prevent a repeat of the beggar-thy-neighbor tariff policies of the 1930s.” Shredding them would do “incalculable damage” to global commerce.
The European Union is already threatening to strike back, said Hendrik Kafsack in the Frankfurter Allgemeine Zeitung (Germany). European Commission President Jean-Claude Juncker said the bloc could slap tariffs on goods produced in the home states of key Republicans, such as Harley-Davidson motorcycles, made in House Speaker Paul Ryan’s state of Wisconsin, and bourbon, from Senate Majority Leader Mitch McConnell’s state of Kentucky. But such a response would concede that we are playing Trump’s destructive game. The EU should keep its focus on upholding the WTO by bringing a formal trade complaint against the U.S. Only “a prudent response” can fend off a ruinous cycle of escalation.
If the U.S. thinks it will hurt China with a steel tariff, it is mistaken, said the Global Times (China). While it’s true that we’re the world’s largest steel producer, most U.S. steel imports come from American allies like Canada and South Korea; only 2 percent come from China. Those allies will suffer, and so will Americans, who will foot the bill for higher-cost steel. The last time the U.S. tried a steel tariff, in 2002, it saved some 20,000 American steel jobs while killing 200,000 jobs in other sectors. That’s why China is not concerned. Trump’s plan “will meet with huge opposition in the U.S., and the world will not allow it.”