By Mark Angelides
President Donald Trump has caused yet another uproar as he calls for a slew of tariffs and taxes to be charged to countries which tariff and tax US exports. If we were to rely solely on the complicit media, this would appear to a disastrous bit of policy making that will doom American industry…But that ignores the reality of how trade imbalances actually work.
This all began with a Tweet from the president that soon turned into an alleged policy. He said: “We must protect our country and our workers. Our steel industry is in bad shape. IF YOU DON’T HAVE STEEL, YOU DON’T HAVE A COUNTRY!”
From this, it became known that Trump wants to impose a 25% tariff on steel imports and 10% on aluminium. The world promptly fell apart. The IMF suggests that this will not only hurt other countries but also the US because other nations might also decide to implement tariffs. Yet this only works if you do not have a major trade imbalance. You would be forgiven for thinking that the IMF and other critics are taking a more “Globalist” perspective.
For Trump, this is all about “America First.” By trying to rebalance trade, he may, in fact, end up starting a trade war…Which the world press seems to think is a terrible thing. And it would be for a country that is in a weak position. But as the president says:
“When a country (USA) is losing many billions of dollars on trade with virtually every country it does business with, trade wars are good, and easy to win. Example, when we are down $100 billion with a certain country and they get cute, don’t trade anymore-we win big. It’s easy!”
What the MSM and the “independent” critics fear is that Trump might actually be right. If he can start and win a trade war with ease, it will be further proof that globalist, supra-national entities are not needed to run nation states. The EU, the UN, NAFTA, and others would have to face the fact that nation states are the way forward. If only the people could realize this.
The opposing sides are marshaling their forces.
Canadian Prime Minister Justin Trudeau said the idea of tariffs was “absolutely unacceptable”. He also said that he was “confident we’re going to continue to be able to defend Canadian industry”.
However, some doubt Trudeau’s understanding of the situation:
Over the last few years, over 50,000 jobs in steel have been lost in the US. And tariffs on outside steel would certainly increase work in this sector. There are a lot of jobs reliant on USING steel that might initially suffer, but as with most things, if it is done swiftly, cleanly and without prevarication, turmoil should be minimal.
By Mark Angelides