News ID: 216065
Published: 0803 GMT June 01, 2018

America declares war on its friends

America declares war on its friends
Hanna Barczyk

To hear the Trump administration tell the tale, it must hit the European Union, Canada and Mexico with steel and aluminum tariffs to stop Chinese manufacturers from flooding markets with these metals and, in turn, protect American workers. That’s a fantasy. Chinese steel mills and aluminum smelters will keep chugging away, and more likely, American farmers and products like Kentucky bourbon, Harley-Davidson motorcycles and Iowa beef will bear the brunt of these new tariffs — even as the tariffs invite a trade war.

President Trump had initially exempted these allies from the 25 percent tariff on steel and 10 percent tariff on aluminum he announced in March. But on Thursday, after several weeks of negotiations, Commerce Secretary Wilbur Ross said the administration decided to go ahead with the tariffs starting on Friday because the talks were taking too long. It’s hard to credit impatience as the cause. More likely, the administration is trying to burnish its tough-on-trade image after criticism of several trade concessions to China.

These tariffs aren’t aimed directly at Beijing, but the idea is that they would limit overall competition. The administration says the new tariffs will keep China from avoiding existing tariffs by shipping its products through other countries. Yet, it has provided little evidence that China does that. Some Chinese steel is sent to the United States after it has been reprocessed in third countries, but that is a legal practice.

Not only will this do nothing to reduce steel and aluminum capacity in China, it will more than likely prompt the European Union, Canada and Mexico to retaliate by imposing new tariffs on American products, hurting businesses and workers across the country. The president is also effectively isolating the United States from its closest allies — the very countries it needs to work with to put pressure on China to change its economic policies.

Even the Aluminum Association, which represents most American-based producers of the metal, said it was “disappointed” by Mr. Trump’s decision. “Today’s action does little to address the China challenge while potentially alienating allies” and disrupting supplies of aluminum and raw materials that American producers need, the group’s president and chief executive, Heidi Brock, said in a statement.

Indeed, why would Europe, Canada and Mexico, which also suffer from Chinese overproduction of steel and aluminum, have any incentive to work with an administration that seems to care so little about the consequences of its actions on their economies and workers?

Mr. Trump’s bullying appears to be pushing voters in at least one country toward more extremist leaders. In Mexico, Mr. Trump’s combative attitude appears to be helping the leftist presidential candidate Andrés Manuel López Obrador ahead of a July 1 election. Many experts fear that Mr. López Obrador has authoritarian tendencies and could undermine democracy in Mexico if he becomes president.

The tariffs may be Mr. Trump’s way to demonstrate that he will still punish countries for cheating the United States. They arrive on the heels of lawmakers’ criticism that the president has gone easy on the Chinese telecommunications company ZTE. The Trump administration said last week that it would let ZTE continue buying American semiconductors and other components. That agreement, which the president said was meant to protect Chinese jobs, appears even more suspicious in light of the fact that it came shortly after China awarded trademarks to Mr. Trump’s daughter, Ivanka. It also came after a Chinese state-owned company struck a deal to build a theme park with an Indonesian business next to a hotel and golf course that the Indonesian company is building with the Trump Organization.

If the president’s intent is to establish a reputation as a champion of industry and workers, he is making a hash of it. His decision to impose tariffs on American allies will only weaken American leadership while doing nothing to address the underlying problems in the steel and aluminum industries.

The above article was written by the Editorial Board of The New York Times.


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