Acting impulsively and jumping in without all the facts while ignoring the opposition from his own political party, President Trump is pushing ahead with a plan to impose huge tariffs on imported steel and aluminum that may very well trigger a global trade war.
Trump rushed to announce a 25 percent tariff on steel imports and a 10 percent tariff on aluminum on Thursday morning, even though some of his own key economic and political advisors are against it. The details have not been properly worked out and it will take weeks more to finalize the appropriate proclamation to implement.
The stock market has not waited to react, with the Dow Jones average plunging 500 points today on fears that foreign countries, especially China, will retaliate, and that American companies that make autos and other products will see costs rise.
“This is the first shot across the bow over a trade war,” Art Hogan, chief market strategist for B. Riley FBR told CNBC. “And nobody wins a trade war.“
Trump’s unilateral imposition of these stiff penalties will certainly raise costs for Americans at least in the short term, may punish some American allies and will almost certainly lead to retaliatory measures by other countries, all of which could send the world economy spinning toward the next global recession.
Trump announces global tariffs on steel and aluminum in major escalation of administration’s campaign to overhaul U.S. trade policy https://t.co/0TKIw1lSue
— Washington Post (@washingtonpost) March 1, 2018
A few in corporate America that make steel or aluminum may benefit but overall what Trump is doing, and the shockingly sloppy way he is doing it, is not a good idea according to top industry and finance experts.
“Last month,” notes CNBC, “the Business Roundtable warned of the risk of ‘foreign retaliation’ that would ‘harm the U.S. economy.'”
Many Republicans are strongly against these tariffs because of the negative impact they will have on financial markets and on most American businesses that need global customers to thrive.
Trump’s tariffs announcement today is peak Trump. It’s what he promised his people on campaign. And a giant “F you” to:
– World Trade Organization
– Foreign countries including key allies
– Republicans on Capitol Hill
– Cohn, Mattis, Mnuchin, Tillerson
— Jonathan Swan (@jonathanvswan) March 1, 2018
The debate over trade has been going on for weeks, but Trump surprised his aides on Wednesday by telling them that he wanted to announce the new tariffs the very next day
That sent everyone “scrambling to determine what specific policy he could announce and others racing to contact executives and union representatives from the industry to attend the announcement at the White House.”
It was unclear if it could be announced today but that didn’t stop Trump from taking to Twitter to make his intentions known:
Our Steel and Aluminum industries (and many others) have been decimated by decades of unfair trade and bad policy with countries from around the world. We must not let our country, companies and workers be taken advantage of any longer. We want free, fair and SMART TRADE!
— Donald J. Trump (@realDonaldTrump) March 1, 2018
The debate over trade has been boiling inside the White House for weeks not just over these tariffs but also concerns about Trump’s threat to undo the NAFTA trade treaty with Mexico and Canada.
The debate over steel and aluminum tariffs has pitted National Economic Council director Gary Cohn, Treasury Secretary Steven Mnuchin, Defense Secretary James Mattis and national security adviser H.R. McMaster, who oppose the action, against Commerce Secretary Wilbur Ross, who says it is a national security issue, U.S. Trade Representative Robert Lighthizer and trade adviser Peter Navarro.
One wild card is that Rob Porter, the White House staff secretary forced out amid revelations that he abused his two ex-wives, was playing a leading role in the trade debate, apparently on the side of imposing new protectionist measures.
Lighthizer has now apparently taken over the lead role.
Trade experts are concerned not only by what Trump is doing with the steel tariff but how he's doing it: invoking a little-used "national security" provision that could also be used by other countries to get around the usual free trade rules. https://t.co/EFel665kip
— Daniel Dale (@ddale8) March 1, 2018
The scramble to give Trump something to announce is the latest sign of the chaos, disorganization, and lack of proper vetting for polities in the Trump White House.
As staff, advisors, and policies come and go at a mad pace, the Trump circus looks more like the clowns are in charge than the ringmaster himself.
It is easy to hate, or even laugh at a lot of what Trump does, but this time the stakes are huge because putting the brakes on the era of free trade will also mean creating walls between America and many of its allies, or even its nominal friends like China.
If Trump is doing this just to have a headline to take attention away from what is happening with the Russia probe, his fraying relations with his Attorney General, the growing mess around his son-in-law and his inability to get his infrastructure plan taken seriously, this is another disaster in the making for him and for the American people.
Once again the least experienced, most unqualified president proves he does not have the intellect, drive, patience or sense to lead America in the 21st century, and that leaves everyone in the country, and all of America’s most important allies, potentially as his collateral damage.