Very Stable Genius and school shooting action hero Donald "Rump" Trump surprised his own economic advisors, Rethuglican party leaders, and Wall Street yesterday when, in what was supposed to be a photo-op "listening session," he told steel and aluminum company executives that he'd levy a 25% tariff on imported steel and 10% tariff on imported aluminum. The market responded with a loss of 420 points on Thursday (and opened 250 points down this morning). Allies like Canada, Germany and South Korea are assessing what countermeasures to take in the event Rump follows through on his threat. It's Canada, not China, that's the greatest exporter of steel and aluminum to the U.S.
As we've seen recently, Rump often sides with the last person to bend his ear (see NRA below, for example), but despite the backlash, he was doubling down this morning in a nonsensical tweet that "trade wars are good, and easy to win." We suppose that excludes consumers of steel and aluminum products like the auto and construction industries, and ultimately the American consumer themselves, who will see prices jacked up as a result of the tariffs. Ultimately, while some steel and aluminum industry jobs would be saved initially, the long-term effects would produce many times more job losses in other sectors.
Republican Senator Ben Sasse of Nebraska had a good rejoinder to Rump's move:
While action needs to be taken over violations of trade agreements, tariffs are not the answer. Better trade agreements, with credible international enforcement, are.
As we've seen recently, Rump often sides with the last person to bend his ear (see NRA below, for example), but despite the backlash, he was doubling down this morning in a nonsensical tweet that "trade wars are good, and easy to win." We suppose that excludes consumers of steel and aluminum products like the auto and construction industries, and ultimately the American consumer themselves, who will see prices jacked up as a result of the tariffs. Ultimately, while some steel and aluminum industry jobs would be saved initially, the long-term effects would produce many times more job losses in other sectors.
Republican Senator Ben Sasse of Nebraska had a good rejoinder to Rump's move:
“Kooky 18th century protectionism will jack up prices on American families -- and will prompt retaliation from other countries,” he wrote in a statement. “Make no mistake: If the President goes through with this, it will kill American jobs -- that’s what every trade war ultimately does. So much losing.”
While action needs to be taken over violations of trade agreements, tariffs are not the answer. Better trade agreements, with credible international enforcement, are.
