Catherine Rampell: Trump has been playing right into China's hands

Erika Holt
March 14, 2018

Speaking on German television shortly after Mr Trump's trade war tweet was posted, he said: "If the Americans impose tariffs on steel and aluminium, then we must treat American products the same way".

Global trade lawyer Larry Herman says the USA tariffs mean there is a lot of steel looking for a home and he encourages the federal government to put out a firm policy statement soon explaining what it will do if it finds evidence other countries are attempting to dump their steel in Canada.

Trump also emphasized the importance of quickly concluding ongoing negotiations on the North American Free Trade Agreement (NAFTA)"to ensure the vitality of United States and North American manufacturing industries and to protect the economic and national security of the United States", the White House said in a statement.

Trump's tariffs, like his hardline NAFTA demands, have the prospective to turn the internationally integrated auto industry upside down.

It's not feasible to convert to a steel-making process that doesn't use slabs, Rodrigues said, adding he doesn't foresee a domestic slab-making industry taking off because making finished steel products is more profitable. Now priced at 18.8 times earnings, most analysts have U.S. Steel stock pegged for only mid-single-digits profits growth over the next five years - about 5.5% compounded, according to data from S&P Global Market Intelligence. But eventually, increased expenses could make it unprofitable to develop automobiles in the United States and production will move elsewhere.

The EU has warned that it stands ready to slap "rebalancing" tariffs on about 2.8 billion euros ($3.4 billion) worth of USA steel, agricultural and other products, like peanut butter, cranberries and orange juice.

In Pennsylvania, President Trump preened before an approving crowd as he trumpeted his decision to slap tariffs on aluminum and steel imports. That is the case with the uneven tariff situation with other nations, and quite a few of them are our allies.

A trade war isn't going to level that field.

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"We are anxious (about) the possibility of having a trade war between the United States and the European Union because we believe that there will be only losers. You guys know that, right?"

Some trade deals, like the World Trade Organization agreements to which most nations subscribe, set out general rules involving a host of issues like anti-dumping, customs valuation and pre-shipment inspection.

Trump can have emotionally satisfying tariffs to scratch his protectionist itch, or he can have a strategy to muster an alliance of truly free-trade partners to pressure China.

Trade across borders is undeniably good, as Adam Smith taught us some 250 years ago. Democrats and Republicans, left and right, have often stood in opposition to them: President Trump and candidate Bernie Sanders being among those who campaigned against them in the last election.

Bown also points out that, although China is the main target of Trump's tariffs, the amount of steel and aluminum it exports to the U.S.is small, compared with Canada, South Korea, the EU, Mexico and others. But Congress wasn't imposing tariffs; the president was.

The US is the world's biggest importer of steel, purchasing 35 million tonnes of raw material in 2017.

China is estimated to be pirating more than a half trillion dollars' worth of American technology, inventions, drugs, vaccines and computer software each year. That's set off a race for USA allies to plead for special treatment, while China has warned of "strong" measures to protect its interests. "Although the Chinese economy was growing by 8.7 percent, the Chinese government managed to shrink Chinese imports of American goods and services". If U.S. Steel restarts part of its plant in Granite City, Ill., which has been out of commission for more than two years, the company could hire 500 workers.

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