As we understood President Donald Trump’s decision last Thursday to proceed with higher tariffs on steel and aluminum imported from American allies — Mexico, Canada and the European Union — the idea is to put pressure on Chinese manufacturers, who are exporting too many steel and aluminum products to the United States.
It didn’t work: China made it clear to U.S. negotiators over the weekend that it won’t be threatened into buying more U.S. goods.
Also over the weekend: Leaders of the six other G-7 nations meeting in Canada rebuked the U.S. for using bogus “national security” concerns to levy tariffs on its allies, saying such tariffs “undermine open trade and confidence in the global economy.”
That’s stern language by international norms. It means a global trade war that will devastate large parts of the U.S. economy is edging closer.
Trump’s approach appears to be driven by whim. He announced the steel and aluminum tariffs in March, then backed off. Now they’re on again. He threatened trade war with China all spring, then two weeks ago Treasury Secretary Steve Mnuchin said things were “on hold.” Now they’re on again, though U.S. markets appear to be betting Trump will back off. Ginning up uncertainty is no way to run an economy.
Trump’s decision to hit allies with 25 percent tariffs on steel and 10 percent on aluminum was met with cheers in the industrial Midwest. But those same states are full of farmers, who already are having trouble making ends meet. Any retaliatory tariffs on U.S. agricultural products will be disastrous, as farm state Republicans quickly pointed out.
“This is dumb,” said Sen. Ben Sasse, R-Neb. “Europe, Canada and Mexico are not China, and you don’t treat allies the same way you treat opponents.”
Even Missouri Republican Sen. Roy Blunt, who is usually loath to criticize the president, chimed in.
“We have a lot more people dependent on getting steel for the jobs they have than people that make steel,” Blunt said Thursday in Kansas City. “Automobiles and agriculture are almost always the first things where we get retribution. Those happen to be two of the things we’re really good at.”
Trump doesn’t seem to care that far more U.S. workers benefit from free trade than benefit from higher tariffs. He has said American farmers are “patriots” who won’t mind getting hammered by high tariffs. By one estimate, a trade war would cost the average U.S. family $210 a year, wiping out most benefits of the tax bill passed last December.
China may be a trade outlaw, but it holds $1.2 trillion in U.S. debt, and its support is critical for any deal the U.S. hopes to strike with North Korea. A calm and rational approach would work better than threats and belligerence.