Posted on 03/19/2018 6:12:39 AM PDT by reaganaut1
President Trump’s practice of staking out extreme positions on trade as a negotiating tactic is a sign of his brilliance. Or so we’re told. But that theory took on water last week, when Mr. Trump had to backtrack on a promise to hit Mexico and Canada with a 25% tariff on steel and a 10% tariff on aluminum, without any concessions from either Mexico City or Ottawa.
To understand the change of heart, take the list of products slated for a new Trump tariff on steel and total the value of those same products exported by U.S. producers. You will find that more than 75% of it goes to Mexico and Canada. Mexico and Canada buy 42% of the U.S. aluminum exports of products that would be subject to the new tariff. The U.S. has trade surpluses in steel and aluminum with both countries.
After the fact, Mr. “Art of the Deal” figured out that his opening tariff bid was on track to blow up the two best foreign markets for American-made steel and significant markets for American-made aluminum. It’s a good bet that the same producers who are lobbying for protection asked the president to back off the neighbors.
The gaffe exposes the Trump administration’s failure to grasp the complexity of the supply chains that interconnect the global economy. A few exemptions won’t clean up the mess he has created with his tariff gambit. The new duties will clobber American fabricators, which rely on these imports to manufacture at competitive prices. Retaliation by injured trading partners will hurt U.S. exporters.
After giving Mexico, Canada and possibly Australia a pass, the administration said it reserves the right to set even higher new tariff rates on steel and aluminum coming from the rest of the world.
(Excerpt) Read more at wsj.com ...
The author has her NeverTrump panties in such a tight twist, she’ll be able to read the Hanes tag under her necklace.
Prolly cannot impose tariffs under NAFTA.
Trump increased his leverage out of thin air.
1) Trump rips up NAFTA>Tariffs on!
2) Trump gets a new bi-lateral deal with Canada>tariffs off!
3) Trump gets a new bi-lateral deal with Mexico>tariffs off and/or a new boarder wall.
Meh. I stopped reading and giving credence to anything from the Wall Street Journal a LONG time ago.
Disclaimer: Opinions posted on Free Republic are those of the individual posters and do not necessarily represent the opinion of Free Republic or its management. All materials posted herein are protected by copyright law and the exemption for fair use of copyrighted works.