We should probably sneak in a post today about the inexplicable new trade war between the U.S. and our closest allies amid our important saturation coverage of Samantha Bee, no?
It’s fun watching congressional Republicans scramble to denounce the tariffs, as if a single voter will care that they didn’t endorse this when the economic shocks begin:
“This is dumb,” Nebraska Sen. Ben Sasse said. “Europe, Canada, and Mexico are not China, and you don’t treat allies the same way you treat opponents. We’ve been down this road before — blanket protectionism is a big part of why America had a Great Depression. ‘Make America Great Again’ shouldn’t mean ‘Make America 1929 Again.'”
House Ways and Means Chairman Kevin Brady said the tariffs “are hitting the wrong target” that “puts American workers and families at risk, whose jobs depend on fairly traded products from these important trading partners. And it hurts our efforts to create good-paying U.S. jobs by selling more ‘Made in America’ products to customers in these countries.”
Even Trump allies on the Hill like Orrin Hatch and Paul Ryan are irritated:
.@SpeakerRyan on Trump tariffs: “I disagree with this decision. Instead of addressing the real problems in the international trade of these products, today’s action targets America’s allies…"
— David M. Drucker (@DavidMDrucker) May 31, 2018
More @SpeakerRyan: "…We should be working with [allies] to address the unfair trading practices of countries like China There are better ways to help American workers and consumers." => https://t.co/kb7kZXRHjG
— David M. Drucker (@DavidMDrucker) May 31, 2018
“It’s unprecedented to have gone after so many U.S. allies and trading partners, alienating them, and forcing them to retaliate,” said one historian of U.S. trade policy to WaPo. It’s just like Michael Corleone ordering the hit on the heads of the five families, if all of them had been friends of his who were in business with him.
Retaliation has already begun. Canada is set to impose $16.6 billion worth of retaliatory tariffs on dozens of U.S. products. The EU, another target of today’s decision, says it’ll appeal to the WTO and impose retaliatory tariffs of its own. No doubt Mexico will soon follow suit. In theory this is all a leverage play to scare American partners into negotiating more favorable trade deals: Trump announced the tariffs months ago but then granted two exemptions to each partner so as not to ignite a trade war. With trade talks momentarily stalled, though, the master negotiator was in a bind. Having already announced the tariffs and with a new deadline looming on whether to grant another exemption, he’d forced himself into a no-win choice between backing down yet again and looking soft or letting the trade war happen. Now relations with U.S. allies are damaged and suddenly Canadian, Mexican, and EU leaders will be under pressure at home not to lose face by making trade concessions and letting “the bully” win. That is to say, Trump’s power play may lead to tougher negotiating posture across the table rather than a weaker one. Unless he quietly ends up folding, of course, as he usually does.
An especially genius move is pulling this at a moment when trade talks with China, a true adversary, are fragile. The art of the deal is alienating your closest allies when you’re trying to outmaneuver a rising rival power that’d be happy to have their business. “[D]ealing with trade complications between the US and China, we want the EU and Canada and Mexico to help us with that,” said Heritage economic Tori Whiting to Business Insider. Who really has the leverage in this standoff?
Oh well. It’s good news if you work for an American steel or aluminum manufacturer! It’s only bad news if you work for literally anyone else. Take two minutes to watch Trudeau’s spiel, which frames this dispute in starkly personal terms. “These tariffs are an affront to the long-standing security partnership between Canada and the United States, and in particular, to the thousands of Canadians who have fought and died alongside American comrades-in-arms,” he says. That’s a ridiculous exaggeration but a great soundbite aimed at anti-Trumpers here in the U.S., hoping they’ll prevail upon him to change his mind. And it proves my point about the two sides digging in. How much leeway does Trudeau have to make concessions on NAFTA now after framing the new U.S. tariffs as an insult to Canada’s military honor?
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