T is for Trump and Tariffs

AC Christopherson

American Foreign Policy

March 6, 2018

Op Ed Week 8

T is for Trump and Tariffs

Last week President Trump announced he would impose tariffs on steel and aluminum. Following this announcement via twitter many companies, countries, and politicians have chimed in either supporting or opposing the proposed tariffs. The worry now is that a trade war could occur, which I think will happen at the expense of America. I agree with Speaker Ryan and hope the President will compromise but I don’t see that happening. I think President Trump will continue to threaten or even implement certain tariffs until he gets all of what he wants out of NAFTA. Ultimately, I feel this continuance of threatening tariffs by President Trump will hurt the U.S. economy and relations that the United States has with other countries, and make them resentful or unwilling to engage in other foreign matters with us like providing aide.

The President’s tweet came after the seventh round of talks between the United States, Mexico, and Canada over the NAFTA that took place in Mexico City. The tariffs imposed would be 25 percent on steel and 10 percent on aluminum.The White House has said those tariffs would apply to imports from all countries with no exemptions. This did not settle very well domestically or internationally. The European Union, Canada and other countries have already threatened retaliation on American products and submitting cases against the United States to the World Trade Organization. Domestically, only steel and aluminum companies were happy about President Trump’s announcement. The stock markets dropped and industries that need metal to make their own products worried that their own prices would rise.

Republican party leaders have spoken out about the tariffs proposed by Trump. Speaker Ryan is, “extremely worried about the consequences of a trade war and are urging the White House to not advance with this plan.” In regards to the tariffs and NAFTA Mitch McConnell said “We’ve benefited from it in every way, and so I think the best way to characterize where most Republican senators are right now, including myself, is genuine concern that this not escalate into something much broader.” The steel tariff could cost Ford and General Motors $1 billion a year. MillerCoors, which is the second largest brewing company in the United State tweeted back to the President saying, “...We buy as much domestic can sheet aluminum as is available, however, there simply isn’t enough supply to satisfy the demands of American beverage makers like us.” They also expressed concern for Americans saying, “American workers and American consumers will suffer as a result of this misguided tariff.”

The European Union has responded to President Trump’s potential tariffs by announcing a list of 100 U.S. goods worth $3.5 billion that would be taxed by the E.U. The European Union would only take this action if the United States did go ahead with applying the tax to European steel. Some major goods on the list are: bourbon whiskey, orange juice, jeans, t-shirts, corn and other agricultural products, steel and industrial products, cosmetics, consumer goods, motorbikes, and luxury boats. President Trump responded to this in a tweet saying,  “we will simply apply a Tax on their Cars which freely pour into the U.S.”

China has said given the proposed tariffs that “some friction will exist” between the U.S. and China because how much trade occurs between the two countries. China also did say that if they felt their interests weren’t being kept in mind that “necessary measures” would be taken. As for Canada, they feel the tariffs would cause disruption on both sides of border. Prime Minister Trudeau said, “he was confident we’re going to continue to be able to defend Canadian Industry”. Other countries including Brazil, Mexico, and Japan have said that they will consider some form of retaliation if the President continues on with the tariffs. Trump tweeted out that the tariffs would only “come off” of Canada and Mexico if a new and “fair” multilateral trade pact was signed.

Given the response both foreign and domestically the overall conesus isn’t a positive one in response to the tariffs the President wants to impose. President Trump could impose a 10% tariff on steel and keep the aluminum but exclude Canada and the E.U. This would still benefit American steel and aluminum producers and not hurt the economy along with large corporations and foreign countries. The odds of other countries retaliating and with tariffs of their own against the U.S. would drop significantly. However, President Trump isn’t very eager to compromise so I see a trade war breaking out affecting the economy negatively but also U.S. foreign policy due to all the countries that these tariffs could affect.