Trump’s Steel Tariff: Once more unto the breach
Once more, Donald Trump is making policy with no public input, no expert input, no constitutional input through our Congress, and with an artificial and extremely short timeline of one week. Maybe he ran his business this way, but this is not how we expect our President or our government to form policy. The tariff will raise the price of steel to steel using industries employing 6.5 million workers. All of us will pay extra when we buy these big ticket products.
Trump and Secretary of Commerce Wilbur Ross had to employ Section 232 of the Trade Expansion Act of 1962 that “threaten to impair the national security” from imports of steel products and wrought and unwrought aluminum. This was issued on Feb. 16, 2018, and apparently was unnoticed by the press and Congress, other than US steel stock about doubled around then. “The President may take a range of actions, or no action…” The deadline on steel recommendations is April 21, and on aluminum, April 19. Trump’s self-imposed deadline is March 9, a full six weeks earlier than required.
The report attacks China, which is irrelevant since they are only the source of 3.4% of our imports, or $1 billion of imports. There are already 169 anti-dumping orders on steel, of which 25 are against China. The report recommends a tariff of at least 24% against all countries. It also recommends a tariff of at least 53% against 12 countries, which don’t include Canada or Mexico, but does include the Republic of Korea. It also recommends a quota against all countries of 63% of their 2017 exports to the US.
The report says this will raise our present 73% of capacity to approximately 80%, ‘the minimum rate needed for the long-term viability of the industry”.
Aluminum is much more crucial, since imports are now 90% of total demand. But the report says that military spending is only a minor amount of aluminum consumption. It recommends a minimum 7.7% tariff on all countries, or higher on a few, or a quota.
Trump is a “pentaphiliac”, my own term for a lover of numbers ending in a 5, or at least a 0. So, in answer to a parting question when he forecast the tariffs, Trump said 25% on steel and 10% on aluminum. He also answered the time for the tariffs would be very long. Since his presidency may not last for more than three more years (or less), it could be an empty promise. Or he could succeed in becoming “President For Life”, as he recently wished.
I add more of King Henry’s pep talk to the troops going into battle, and you can judge the analogy to Trump’s going into a trade war. Of course the “modest stillness and humility” is totally inappropriate in this Reign of Trump. Trump has found that instead of long inspirational speeches as composed by Shakespeare, simple mottos like “Build the Wall” and “Lock Her Up” suffice. This battle seems to feature a wall.
