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Do Steel Tariffs Put Americans First?

by David Teitelbaum (Principles: It all begins with Respect. ) - 8 month ago

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President Donald Trump’s core belief that the U.S. can make better trade deals is about to be put to the test. If he’s right, Americans will win. If he is wrong, a harmful trade war looms.

Generally, whenever you hear a Trump administration official start a sentence with the words “The President has been clear,” you know that the official is about to stretch the truth. Aside from clearly being against anything that President Obama was for, President Trump has taken conflicting positions on nearly every important issue. That includes health care, immigration, gun control, and nearly every aspect of foreign policy. In fact, the President claims that his unpredictability is a strength. No, our President has almost never been “clear.”

There is one issue, however, on which Donald Trump both as a private citizen and as President has truly been clear. That issue is trade. Throughout his life, Trump has argued that the United States has shown no backbone in making trade deals with other countries. As a result, our companies must struggle heroically to overcome trade barriers erected overseas while foreign companies are easily able to access and exploit the huge and lucrative American market.

Trump, however, faces a stark reality if he wishes to change these policies. The obstacle is nothing less than our Constitution which places the power to impose tariffs squarely in the hands of Congress. The President can negotiate, or abrogate, trade deals but when it comes to actually standing up to our trading partners by levying tariffs, the President’s power is severely limited.

True, he can try to bully Congress into imposing tariffs but it is unlikely to work. To understand why,  let’s look, for example at steel tariffs.  Members of Congress from Districts where steel production is important, will certainly favor those tariffs. However, Members whose districts’ manufacturing base relies on steel products, are going to oppose the tariffs for fear that their costs will rise. Add in the fact that Democrats are always going to be inclined to oppose President Trump, and you can see how unlikely it is that Congress will impose tariffs.

So the President is left with few tools. One of those tools is the “National Security” exception which allows him to impose tariffs on industries that are vital to America’s security and which are being undermined by cheap imports. Steel and aluminum fit that description.

By imposing tariffs on steel and aluminum the President is hoping to accomplish a couple of key goals. First, since steel is a key Canadian export, he is telling Canada and Mexico that he is indeed serious about renegotiating NAFTA. He’ll give Canada an exception on the steel tariffs but only if it leads to a better NAFTA for America. Implicit in that argument is that threat to our North American allies that if they do not make concessions, NAFTA will cease to exist.

Second, he is hoping to put the rest of the world in a lose-lose position.  If other countries elect to retaliate against American industries, Congress will be forced to impose additional tariffs to protect those industries. On the other hand, if other countries don’t retaliate then Congress may be emboldened, with a push from the White House, to impose additional tariffs on other imports which harm American businesses.

If all goes according to plan, the U.S. economy, by far the strongest in the world, will emerge from these trade “adjustments” in a far better competitive position than we are today. The steel and aluminum tariffs will indeed have been a key step toward putting Americans first.

On the other hand, if other countries work together to direct their retaliation solely against America, then America will face rising prices, more difficulty in exporting products, and Americans will clearly be the losers. This, of course, is the nightmare scenario predicted by those who oppose the President’s decision on tariffs.

I am generally inclined to side with experts and most economists have concluded that the tariffs will harm America. However, as we have all learned, betting against President Trump is generally not a good idea.

How do you think this will end?

Comments and Responses (2)

Reasoning used for ARGUMENTS presented
By  Cool Calvin - 8 month ago
You bet. "Betting against President Trump is generally not a good idea." Even the crazy guy in North Korea is coming to that conclusion. Other countries think they can frighten us by threatening to retaliate. That worked with our other Presidents, like the son of George Bush, because they actually believed that the Europeans would attack us. However, Trump knows that Europe and Canada, and South Korea and China aren't going to do anything because they still have a great deal with us. Unlike Bush Jr. and the others, Trump will stand strong and America will win.
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By  Facebook Commenter - 8 month ago
After reading the article, I realize (confirming my own beliefs) that the outsourcing is done BECAUSE THE COMPANIES DON'T CARE ABOUT PATRIOTISM. This B.S. that they were lured by better deals from other nations, as if somehow they were facing " the Sirens" that " sang" to them, seducing them to flee USA or face economic end of the world demise. None is INVOLUNTARY! They left because MONEY, PROFITS and SHAREHOLDERS, all wrapped in one big burrito a la "Wilson" have more value than all of USA and its workers.
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