Trump Administration Slams Close Allies With Surprise Tarrif

International Trade
Globalism is fed by international trade, but so is our economy... what do we do?

The tariffs are coming, the tariffs are coming!

The US has long had a peaceful and mutually beneficial trade relationship with its close geopolitical allies. The EU, Canada, and Mexico have been major export markets, sources of crucial strategic resources (the majority of our foreign oil comes from Canada, for example) and even coalition partners in our endless wars of empire.

All that changes today.

Today marked the start of our new tariff regime, which imposes 25% trade penalties on imported steel and 10% on imported aluminum. Mexico, Canada, and the EU have all announced plans to retaliate against these taxes with their own tariffs targeting American-made goods.

Trump had announced worldwide steel and aluminum tariffs in March, but he granted a stay to several major trading partners. Canada, Mexico, and the EU were among those countries granted relief from the tariffs, and most people thought that meant that the trade war was off.

The US was pursuing negotiations with those allied nations, to help alleviate this administration’s fears about the state of domestic production for steel and aluminum. There was a deadline on those negotiations, however, a day by which the administration needed to have an alternative deal arranged.

That day was today.

Now, with no alternative agreements minted between the US and our closest allies, the high tariffs are being imposed across the board.

And in response, the effected nations are hitting back at us.

Jean-Claude Juncker, president of the European Commission, said that the EU would move ahead with tariffs that are projected to impact nearly $7.5 billion of US exports. The European Commission is also going to lodge a complaint with the World Trade Organization.

The EU has said that its retaliatory tariffs, which could be enforced as early as June 20th, are going to include 25% tariffs on such traditionally American products as: motorcycles, denim, cigarettes, cranberry juice, and peanut butter.

Apparently they think our main economic exports resemble the contents of James Dean’s shopping cart.

Chrystia Freeland, who is Canada’s Minister of Foreign Affairs, announced on Thursday that Canada will place tariffs on American goods, including steel and aluminum. Some products will be taxed at 10%. Some will be taxed at 25%. About $12.8 billion in American exports will be subject to the tariffs.

Justin Trudeau, the Canadian Prime Minister (and a notoriously empty-headed pretty boy) said that the US’ tariffs “are totally unacceptable.” He also called them an “affront” to the longstanding US-Canada security partnership, and said that it was “inconceivable” that trade with Canada could pose a threat to the United States.

The Mexican government has also announced that it will retaliate against the steel tariffs by imposing penalties on US goods like lamps, pork, fruit, cheese, and flat steel.

The United States in the top importer of steel in the world. We bring in about $29 billion worth of foreign steel every year. The vast majority of that comes from Canada at $5.5 billion, South Korea at $3.1 billion, and Mexico at $2.9 billion. Some experts believe that 88% of the steel exported from Canada is destined for America, and the same is true of about 75% of Mexican exported steel.

In other words, our two neighbors are selling us nearly all of their steel already. We haven’t been at war with either of these countries in hundreds of years, and have (or had, until recently) close trade and security relationships with both nations.

The argument that we need steel tariffs on these nations, who would be fighting alongside us if we ever got into a war anyway, is patently ridiculous. It holds a little bit more water when applied to nations like China, or Russia, who are our biggest geopolitical rivals at the moment. And we do get a fair bit of steel from the Chinese. They’re the fifth largest steel exporter to the US after Canada, South Korea, Mexico, and Brazil. The sold us about $1.96 billion worth in 2017.

But that’s mostly cheap steel used for consumer products, like knives, or brake rotors. We’re not building tanks and battleships out of Chinese steel, and we probably never would.

The Trump administration should be honest and admit that these tariffs are designed to bolster domestic production and reduce our reliance on imports. That’s a legitimate national security goal in and of itself. But suggesting that imported steel from Canada (most of which is used in construction anyway) is a national security risk is dishonest. And it’s pissing off the Canadians.

And Donald Trump, as a seasoned businessman, ought to know that pissing off your main supplier and your main customer in one go is about as stupid as it gets.

And now the American economy is going to pay for that stupidity.

Connor A. Houston is a 2015 graduate of Liberty University Helms School of Government, rower, cellist, and a Research Fellow at Frontiers of Freedom. The opinions expressed are his own.