This morning, seemingly before his “Executive Time,” Trump Tweeted the following:
When a country (USA) is losing many billions of dollars on trade with virtually every country it does business with, trade wars are good, and easy to win. Example, when we are down $100 billion with a certain country and they get cute, don’t trade anymore-we win big. It’s easy!— Donald J. Trump (@realDonaldTrump) March 2, 2018
A few hours later, he followed it up with this bit of nonsense:
When a country Taxes our products coming in at, say, 50%, and we Tax the same product coming into our country at ZERO, not fair or smart. We will soon be starting RECIPROCAL TAXES so that we will charge the same thing as they charge us. $800 Billion Trade Deficit-have no choice!— Donald J. Trump (@realDonaldTrump) March 2, 2018
Anyone who thinks a trade war is a good thing is not competent to lead a national economy. And the fact that he thinks they are “easy to win” certainly has no idea what he’s talking about. This action, which Donny plans to take in the next couple weeks, if not sooner, is aimed at China, which is beyond a major trading partner with the United States, as if the fact that you can’t go into most stores and buy something not made in China or elsewhere in Asia isn’t a major indication of that.
The fact is, our economy is largely dependent on imports, so his “promise” to place a heavy tariff on steel and aluminum is not exactly a great idea for anyone who is concerned about the economy of the United States. The fact that he thinks he is demonstrates a shocking cluelessness. Okay, not so shocking, since it is Trump. But really, a businessman should understand this better than, say, a redneck caller to Limbaugh or Hannity’s radio shitshows.
And once again, we are clued in to where Lord Donny gets his ideas. His people are still monitoring right wing talk radio and getting their ideas from the callers. You know, “the Chinese took our jobs, so we need to make them pay.” This is the kind of nonsense you hear from blowhard acquaintances who think they know everything.
Former Ambassador to China Max Baucus told CNBC this morning that China will surely take retaliatory action in response to the tariffs on steel and aluminum imports. And not only is he right, but it should be obvious to everyone. That means, since you can’t buy many hard or soft goods that aren’t made in Asia any longer, you can expect to pay a lot more for most things. Expect everything in the dollar store, or even Walmart or Target, to increase substantially. You see, China doesn’t pay the tariffs, we do. The worst part is, the United States doesn’t get most of its steel from China. Most of the imported steel we use here comes from Brazil, South Korea and Canada; three other countries we are essentially dragging into a trade war with us.
And for what? We essentially lost our steel industry decades ago. My father was a steelworker from 1957-1977 and left Bethlehem Steel then because he could see what was coming. Now, there are a total of 140,000 steel jobs in this country, while roughly seven million jobs are dependent on steel, including imported steel. Even if the tariffs would have the effect Donny imagines, we no longer have the capacity to manufacture all the steel we need. In fact, many of those seven million jobs are in vehicle plants built in Trump/GOP country; how does Donny think those companies will react when the price of steel and aluminum skyrockets, as we slap a 25 percent tariff on imports and countries we import from retaliate in kind?
That’s assuming they limit their retaliation to steel and aluminum. They could just retaliate by slapping a tariff on everything we export to their countries. They could also use their trade agreements with other countries, including several,like TPP and NAFTA, to increase the scope of the retaliation. Trump and the GOP have isolated us to the point that we can no longer respond in kind. This move could pit the United States against the world. That is a position we may have been able to withstand back in 1962, but no longer. In 2018, Europe and Asia are back and kicking our asses and Africa is even making strong moves to compete with us.
While our trade deficit is high, it’s not necessarily the worst thing in the world. It means we don’t manufacture as much as we used to, that’s all. However, we do still export a lot, especially food. How will farmers do when countries who love to import US food suddenly decide it’s not worth it? What about the small businesses in this country who sell imported goods here? For that matter, what about the small businesses who sell good internationally, online? If other countries slap a large tariff on their goods and their businesses dry up, what are we prepared to do about that.
It’s a little odd that a “president” who has spent the last year bragging about the stock market seems suddenly unaware that the market is responding really badly to the news. A trade war is not good for any economy, and those who think it is tend to be blissfully ignorant about the potential effects. While these tariffs are very broad and do not target any specific country, the fact is, they will impact our largest trading partners and the retaliation is likely to be detrimental to businesses of all sizes here.
That is not to say there is no problem with other countries flooding the markets with steel and aluminum. There is. It has been driving down prices, to the detriment of the domestic steel industry. However, broadly throwing a tariff on all imports of the metals doesn’t actually directly address the oversupply. A more constructive approach would be a better way to deal with this than simply pitching a fit and throwing a tax on imported goods. Being antagonistic, while it is Lord Donny’s way, is not to the benefit of the country as a whole. It makes us look untrustworthy and petty, which is a bad framework for trade.
The time to possibly create a trade war is not now. You have to deal with such a thing from a perspective of strength. We are far too dependent on foreign trade for this to be a valid strategy right now. This will likely cost consumers a hell of a lot more than the $700 per year Trump and the Republicans falsely claimed we would get under then Billionares Tax Cut, and it will also (again) explode the deficit. I know Trump and his followers think we’ll collect billions in taxes, but it doesn’t work that way. They’ll stop exporting and our businesses will suffer, which means we lose revenue.
The fact that Trump thinks a trade war is a good thing demonstrates once again just how incompetent he is.
Also published on Medium.