There's already a trade war, and it's being waged by Beijing. All told, 11 nations impose tariffs on America's Harley-Davidson motorcycles with engines over 800cc: India at 100 percent; China at 60 percent; and Thailand at 30 percent.
That's a long shot - Trump has railed against the USA trade deficit since entering the race for the presidency in 2015 - but we hope he will, as do many Oklahomans who will be impacted. So Europe can continue with its higher tariffs on USA cars, so long as it does the same to Japanese cars.
"We can not have free and open trade if some countries exploit the system at the expense of others", Trump told the World Economic Forum in Davos, Switzerland.
So what happens when a country imposes tariffs?
The president's top economic advisor, Gary Cohn, announced his impending resignation shortly after Trump announced the tariffs.
While the tariffs have been introduced under the pretext of national security concerns, UK Steel claims only around three per cent of steel in the US is used for defence, and many see the move as politically motivated (a congressional seat in Pittsburgh, home to US Steel, is now up for grabs).
Do the math. While imported steel will cost more, imports will drop from one-third to one-fifth of all steel used here. We must not let our country, companies and workers be taken advantage of any longer.
"Right now, half the country thinks that the president is a lunatic, and they have very little confidence in his rational approach to issues, so they are anxious about politics as an issue", said Auth. So they put it to consumers - but what else is new?
The head of the National Retail Federation, whose members include department store chains, grocery stores and other merchants around the world, also raised objections to the tariffs Thursday, calling them a tax on all Americans. "This trading relationship holds true for many countries with relatively high-consumption populations", he wrote.
Steel tariffs, however, don't follow this pattern. Our steel industry is in bad shape. As a result, steel consumers are more likely to balk at the higher prices that would result from tariffs.
This kind of targeted tariff helped save Harley Davidson, for example. If they don't cooperate, they will pay a toll or tariff.
US steel jobs have been mostly lost due to technological change (i.e., robots, not China).
So why is Trump doing this?
Trade across borders is undeniably good, as Adam Smith taught us some 250 years ago. That depends on how effective an interest group is in winning the support of powerful political patrons.
Steel and heavy industry have always been a political touchstone for Chinese leaders, which led to economic disaster in the 1950s. That would spook stock markets, but Scissors said that the more serious the conflict became, the worse China's position would become, due to the importance of its USA trade surplus.
Total steel production rose 5.7 percent past year over 2016 to a record 831 million tons, according to the Chinese Cabinet's planning agency, the National Reform and Development Commission. These states have been swing states in recent presidential elections, which gives industries with workers in those regions outsized influence. The U.S. gets clobbered at the WTO, just like it does at the United Nations.
"A lot of steel mills are now opening up because what I did", Trump crowed, without offering evidence.
It may take a while to see if the worries about a global trade war were prescient, as other countries mull their options. With the possibility of an exemption in mind, South Korean trade authorities will once again stress that Korean companies' investment in the US can contribute to the American economy and that Korean steel exports do not affect the U.S.' security and economy negatively.
This article incorporates elements of a story published on July 17, 2017.