What Is Trump’s Trade War Supposed to Accomplish?
Trump’s decision to hike steel and aluminum tariffs on allies and major trading partners is flawed in several respects. One of those flaws is that it seems very unlikely to accomplish anything except to drive up costs for all sides. The president is using a bogus national security justification for the action, and that is bad enough in its own right. That should set off alarms all by itself that the policy is a bad one and is being carried out through an abuse of power.
It also suggests that the tariff hikes will remain in place indefinitely to secure us from the menace of imported Canadian and German steel. This seems silly, and it also means that there is nothing that any of the governments on the other side can do to satisfy the administration to get them to reduce these tariffs in the future. That makes this action a case of escalation for its own sake. In addition to inviting retaliation that will impose additional costs on American businesses and consumers, there is no plausible case for how hiking these tariffs will make any of these trading partners more cooperative or inclined to compromise on trade issues. On the contrary, the gratuitous and insulting nature of the action gives our trading partners strong incentives to reject future U.S. demands.
Like any coercive tactic, it will breed resentment and encourage resistance among the affected nations. The tariff hikes have certainly done that. French President Macron denounced the action as illegal. Canada, Mexico, and the EU have all announced retaliatory measures. Canadian Prime Minister Trudeau excoriated the move as “totally unacceptable.” Like any misguided use of economic pressure, the costs of this policy are going to be borne by the people of all the countries involved, and the effects will hit the least well-off hardest. Trump is arbitrarily imposing a regressive tax on Americans and damaging relations with some of our oldest and closest allies and neighbors, and he’s using a bogus national security reason to do it.