It’s interesting how President Trump’s tariff proposal has opponents screaming it’s the end of the world.
Granted, I’m no proponent for a trade war. China can win by oppressing their citizens into mud hovels, forcing them into slave labor with little recourse. That won’t happen in America, where citizens protest peacefully without fear of being mowed down by tanks.
No surprise there.
What is astounding is the level of protest on the left and the right.
Keep in mind that President Trump is proposing a 25-percent tariff on imported steel and 10-percent tariff on imported aluminum.
Predictably, Paul Krugman, who won a Nobel Prize for having the same liberal ideology as fellow peace prize winner Barack Obama, forecasts a level of inflation that will crush farmers, destroy real estate investors and impoverish the United States.
On the right, David and Charles Koch’s “Americans for Prosperity” moans, “These tariffs perpetuate a harmful practice in which the government is able to hand-pick winners and losers in specific industries. And when it comes to tariffs, the government often creates many more losers than winners. Tariffs drive up costs for everyone—including manufacturers that rely on imported materials to run their business.”
In the Midwest, blue-collar Trump voters know this is something they wanted: more factory careers like those in Gary, Indiana. Indeed, U.S. Steel almost immediately announced they’re hiring 500 more workers, specifically crediting Trump’s tariff proposal.
Meanwhile, economists and pundits are cheerfully reporting the unhappy Canadian and U.K. governments are preparing to fight back. Foreign Minister Chrystia Freeland said that Canada buys more than half of American steel, giving the U.S. a $2 billion surplus in this trade.
Canada is already reeling from the Commerce Department’s decision to add tariffs of up to 24 percent on Canadian softwood lumber imports.
That’s 24 percent on about $2 billion worth of imported wood every year, which is Trump’s retaliation for Canadian policies that have effectively blocked certain U.S. dairy exports.
News reports declare the European Union is threatening to slap big import taxes on American icon, Harley-Davidson, Levi’s blue jeans and bourbon, which all kinda go together, don’t they?
Steadfastly walking through this verbal firefight is internationally renowned economist Peter Morici.
Morici makes a couple of interesting points about the effects of the tariffs as well as the targets. First of all, he points out that Trump’s targets are poorly considered.
China is, first and foremost, the culprit most guilty of trade manipulation.
“After all,” Morico tells me, “trade agreements presume all parties will behave honestly. China doesn’t.”
“So, the focus needs to be on China, not these other countries.”
It is possible Trump is simply putting the E.U and Canada on notice that they are our partners and need to act that way.
He is leaving open the possibility of renegotiating NAFTA with those two governments.
As for the cries that beer and cars will be unaffordable in a trade battle involving steel and aluminum, Morici makes a couple of excellent points: “These tariffs could raise the price of a $36,000 car by about $125... If you have to lay off workers because of an extra $125 per car, the automobile industry has a much bigger problem than the tariff.”
Morici also claimed the cost of a can of beer would only go up three-tenths of a cent on each aluminum can. As a craft beer enthusiast, I would gladly pay an extra couple of pennies per six-pack to see smiling faces carrying lunch boxes to thriving midwestern mills.