Archive for Monday, March 12, 2018

Opinion: Trump’s tariffs sheer ignorance

March 12, 2018


Washington — Is it too much to ask that the government not insult our intelligence while it is lightening our wallets? As an overture to his predictable announcement of steel and aluminum tariffs, the president, that human sponge ever eager to soak up information, held a “listening session,” at which he listened to executives of steel and aluminum companies urge him to do what he intended to do. He ended this charade of deliberation by announcing the tax increases.

The tariffs — taxes collected at the border, paid by American consumers — on steel and aluminum imports will be 25 percent and 10 percent, respectively, the most severe of the options proposed by his Commerce Department, which impedes the activity denoted by its name. But the 6.5 million employees in steel-using industries (46 times the number of steel-making jobs) and the hundreds of millions of consumers of steel- and aluminum-content products should not complain, they should salute: The president says the tariffs are national security necessities.

Never mind that the Cato Institute’s Colin Grabow notes that defense-related products require only 3 percent and 10 percent of domestic steel and aluminum production, respectively. Or that six of the top 10 nations that export steel to the United States have mutual defense agreements with the United States. Or that China, an actual military competitor and potential adversary, is not among the top 10. Or that Canada, a NATO ally, supplies more U.S. aluminum imports than the next 11 countries combined. Or that, as The Washington Post reports, “For nearly a quarter-century under U.S. law, Canada has been considered part of the U.S. defense industrial base, as if its factories were American.” Or that the aluminum for military aircraft and the steel for military vehicles will be more expensive so, effectively, the administration is cutting the defense budget. Cato’s Dan Ikenson says the administration’s argument seems to be “that an abundance of low-priced raw materials from a diversity of sources somehow threatens national security.”

But, then, invocations of “national security” can rationalize a multitude of sins. Sen. Marco Rubio, R-Fla., says the sugar import quotas that enrich a few already rich Floridians are required for America’s “food security.” It will be desirable (because educational) if some nations retaliate for the steel and aluminum tariffs by imposing 25 percent tariffs on Florida citrus in the interest of “food security.”

Electrolux, Europe’s largest manufacturer of household appliances, responded to the U.S. tariffs by suspending plans to invest $250 million in a Tennessee factory. Before the announcement of the tariffs, which are intended to raise steel prices, Whirlpool’s CEO lamented to analysts that rising prices of steel and other materials might knock $250 million off Whirlpool’s profits. Whirlpool had just made a rent-seeking raid on Washington, where it successfully sought protection against foreign washing machines — tariffs and import quotas that will punish American purchasers of appliances. As Lily Tomlin says, “No matter how cynical you become, it’s never enough to keep up.”

Regarding trade, Congress has given presidents vast discretion to trifle with Americans’ freedom, the nation’s prosperity and the world’s hard-won architecture of efficient commerce. Now this capacity for mischief is in the hands of someone who knows next to nothing about the one thing — business — he is supposed to know something about.

Protectionism is a scythe that slices through core conservative principles, including opposition to government industrial policy, and to government picking winners and losers, and to crony capitalism elevated to an ethic (“A Few Americans First”). Big, bossy government does not get bigger or bossier than when it embraces protectionism — government dictating what goods Americans can choose, and in what quantities, and at what prices. Down the decades, Trump has shown an impressive versatility of conviction, but the one constant in the jumble of quarter-baked and discordant prejudices that pass for his ideas has been hostility to free trade. It perfectly expresses his adolescent delight in executive swagger, the objectives of which are of negligible importance to him; all that is important is that the spotlight follows where his impulses propel him.

For more than a century, enlarged executive power wielded by agenda-setting presidents has been the sun at the center of progressives’ solar system of aspirations. Hence protectionism — economic life drenched by politics and directed by unconstrained presidential ukases. So, if on Nov. 6 the Democrats capture either house of Congress, on Nov. 7 there will be, effectively, an accommodating Democrat in the presidency.

— George Will is a columnist for Washington Post Writers Group.


Gary Stussie 1 month, 1 week ago

So nice to be responsible for nothing and to be able to 2nd guess the actions and decisions of people actually tasked with responsibility. I suspect that if Will actually knew what he was talking about or could think on a national level, he would be something other then a Monday morning quarterback!

Jim Slade 1 month, 1 week ago

140,000 jobs in the steel making industry.

8 million jobs in industries that use steel.

Risking 8,000,000 jobs for 140,000 jobs.Brilliant.

Adding tariffs only costs US more. It raises the floor on steel and aluminum prices.

For example let's say prior to the tariff foreign steel was $100 a ton and U.S. steel was $110 a ton.

Now there's a tariff that makes foreign steel $125 a ton. Do you think U.S. steel manufacturers are going to keep their p[rice as $110 a ton or do you think they'll raise their prices up to just below the cost of foreign steel to something like $124 a ton? Of course they're going to raise them as their shareholders expect larger profits.

So what happens is now those industries, and thus us consumers by proxy, end up paying a lot MORE for steel.

What a great way to slow down the economy and lose millions of jobs in the process, and that's not taking into account retaliatory tariffs in other industries that will get imposed on us by other nations.

Bob Summers 1 month, 1 week ago

America has been hosed for decades.

Will acquired his apperception from "experts"

Trump has the rust belt vote and beyond for 2020

Jim Slade 1 month, 1 week ago

I doubt it since the net will be an increase in lost jobs and losses in other industries that will far outweigh any gains we'd see from the tariffs.

Armen Kurdian 1 month, 1 week ago

I really don't think these tariffs will accomplish what he hopes for. I would very much like to see steel as a raw material manufactured in the US, have it come back to Pittsburgh, but I know there are comparative advantages in Canada. In a time of crisis, I really don't think Canada is going to deny us steel if it comes to it.

I would have rather seen maybe a few percent increase in tariffs across the board, very broadly applied purely as a revenue raising measure to pay down the deficit and debt. We're the biggest consumers in the world, there's going to be a trade imbalance like it or not.

Richard Heckler 1 month, 1 week ago

Face it Trump the Rump is a genius ---- just ask him.

His IQ may indicate such however his thinking says otherwise.

Bob Summers 1 month, 1 week ago

Face it Trump the Rump is a genius

Heckler is getting frisky I see.

Steve Jacob 1 month, 1 week ago

Did you know the trade deficit went up 12% in Trump's first year. With our booming economy, we consumers want more stuff, and if we buy cheaper foreign made things, we can afford more stuff. ,

Steve Hicks 1 month, 1 week ago

Austen Goolsbee is a former Chairman of the federal Council of Economic Advisers. He explained last Saturday on N.P.R.'s "Wait Wait Don't Tell Me" how tariffs work:

"I will give you a small story about my Aunt Trina who lived in a house with my Uncle Bob in Lubbock, Texas. There was a disagreement in the family what it was that my Aunt Trina cooked....But it ended up stuffed down the sink where it clogged the drain...

Uncle Bob went to the store and got a product, which has since been banned, which was called the bomb. And the bomb was a combination of a plunger and a firearm...

It had a cartridge in it. You stuck it into the drain ...And you fired it in...and it would blow the clog out...

And it said on the outside, use only one charge...But my Uncle Bob is not the type to use only one charge...So he fired the entire thing into the drain...He cleared out the clog of the drain.

And they lived in a - what in Chicago we would call a converted. It was a house. It had a wall down the middle. There were two identical apartments. And the drains did not just go straight down. They connected in a little Y...So every time he blew the bomb...into the drain, it didn't go down the drain to the sewage. It just blew it to the neighbor.

And so the next morning, that person comes over...says, Bob, was there some kind of terrible plumbing catastrophe...

he said, I'd like to show you my apartment. And all over the Aunt Trina's lasagna blown out there.

And that is exactly what's wrong with tariffs..."

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