White House Prepares Tough Import Restrictions Against China

I understand that Trump the developer liked to make special deals, but when presidents do that, it’s crony capitalism – crapitalism. Further, the president is pushing for a formal announcement in weeks. “A lot of steel mills are now opening up because what I did”, Trump crowed, without offering evidence.

This was the principal argument Trudeau and his government officials made in lobbying Washington for an exemption for Canadian steel and aluminum.

Trump told Cabinet secretaries and top advisers during a meeting at the White House last week that he wanted to soon hit China with steep tariffs and investment restrictions in response to allegations of intellectual property theft, according to three people familiar with the internal discussions.

Trade wars will really create lose-lose situation. He got the brouhaha he wanted.

The European Union has called the new tariffs “deeply unjust”, and has said it is considering new tariffs on American products ranging from cranberries to peanut butter. Ron Johnson of Wisconsin) that would “cost our country jobs” (Sen. “Canadian steel is in your tanks”, he said, in remarks delivered just kilometers from the Canadian Armed Forces Bagotville air base, which was established in World War II to protect Canada’s strategically significant aluminum industry. Some Democrats joined in the clamor.

But I fear the opposite: a trade war and stagnation – because much of what Trump and his followers say is economically absurd.

We still discount an all-out trade war as a low-probability event, but the chance of more targeted disputes is clearly on the rise.

Critics claim tariffs will raise steel prices. Equally, the overall trade playing field has not been even for the USA.

The President may be willing to provide exemptions from harsh new tariffs on steel and aluminium imports if Brussels allies with him in his battle to combat what he views as unfair trade practices by the Asian superpower.

Trump is right that we’ve tolerated these abuses under a belief that to challenge them would violate principles of free trade. From neighbours Canada and Mexico to trans-Atlantic partner, the European Union (EU), and from close Pacific allies such as Japan and Korea to the emerging hegemon of the Middle Kingdom, there are subtle as well as open threats of tit-for-tat retaliatory measures. Thus triggering tariffs creates a feel good solution, a political sugar rush, but often later a bitter backlash to those ordering them. Do you worry because you bought more from them than they buy from you? No.

The tariff gambit is a classic Trump con.

Since being elected, he has been all show, but very little substance. Half the average weighted tariffs imposed by China, one third those imposed by Mexico, and one quarter what India imposes.

Boeing, the United States’ largest exporter, lost 2.5%, shaving about 60 points off the Dow. Last year, investors calmly brushed aside every surprise that came out of Capitol Hill or the White House. Just 3 percent come from China.

Last Wednesday, Trump tweeted that China had been asked to develop a plan to reduce its trade imbalance with the United States by $1 billion, but the spokeswoman said Trump had meant to say $100 billion.

While the posturing gets the headlines, Trump has quietly rigged the rules against workers even more.

Former President Barack Obama also granted steel mills tariffs while in office, but implemented them slowly. First, they gave companies that had parked profits and pushed jobs offshore to avoid taxes a $500 billion tax break. But he gave more than 700 exemptions on steel products and countries because the US didn’t – and still doesn’t – produce enough steel to meet its needs.

In 2016, Trump promised America that he, alone, could fix it.