TRUMP'S TARIFFS: ANOTHER EXAMPLE OF TRUMP'S IGNORANCE

…Just one more example of our current president.

 

Canada’s Foreign Minister threatened retaliatory measures if Canada isn’t exempted from the trade tariffs.

 

Once again, Trump has shown that when he gets pissed off, he then does something to show that he is the one running the show from the White House, and noting matters as to how destructive his moves are to either the country or to America’s allies.

 

Just look at how he decided to apply tariffs to imports of steel, and to all aluminum imports.

 

Here is where Donald Trump is today in the White House: 

With both his children advisers in potential trouble for combining their private businesses with White house politics; with his loss of his long-time assistant Hope Hicks; with the loss of his capable body guard and the loss of his White House secretary, Rob Porter; plus his being upset with his Attorney General, and his Chief-of-Staff and his National Security Adviser, McMaster, Trump has become what one White House official has called totally “unglued”.

 

Therefore, with Trump being what some are calling the “loneliest man in Washington DC”, and without talking to his advisers, Trump called a private meeting of American steel and aluminum executives.  Then on the morning after, he announced that all steel imported into the United States would be slapped with a 25% tariff and aluminum imports with a 10% tariff. This announcement was done without any advice from the White House lawyers or the Pentagon and it sent shudders through world markets and prompted a global outcry.  The results so far is that the Canadian and European allies are threatening market retaliation, starting with Kentucky Bourbon, Levis and Harley Davidson.

 

When this kind of action occurred after World War II, it caused a world-wide recession that lasted for years.  And that was well before the international trade dependence was as intertwined between all nations as it is today.

 

Trump has said that he was going to have a trade war with China, and that, “trade wars are good!”  (Once again, our president shows his ignorance of the world and trade issues.  Trade wars only hurt the average workers and the poor)

But 50% of our imported aluminum today is from Canada, and large quantities of steel also come from Canada and other allies.  The US imports only 3% of either of these two items from China. 

 

Canada has reacted with a mixture of anger, confusion and resignation to President Trump’s promise to hit US imports of steel and aluminum with these hefty tariffs, upending decades of economic cooperation and integration. 

 

Trade agreements require compromise from both parties.  Trump doesn't have a "compromise bone" in his body. 

 

“We’re pretty consistently flabbergasted that Canada was put on the top of the hit parade of trade villains in Trump’s eyes, said Douglas Porter, chief economist at the Bank of Montreal, Canada.

 

Trump has often accused China of forcing US steel and aluminum companies to fold by inundating the market with cheaper materials. But Canada is the largest exporter of steel and aluminum to the United States, supplying $7.2 billion of aluminum and $4.3 billion of steel to the United States, just last year.

 

And guess who is hurt most by these tariffs?  It’s the American public that, when the tariffs are spread over all those US industries that use these two items, the final end-price to the consumer will increase.

 

The US Commerce Secretary, Wilbur Ross, tried to go on TV and say that these issues would matter very little to US consumers because, as an example, there is only 3 cents of Aluminum in a single Coke can and 2.6 cents of steel in a Campbell soup can.

 

But when you look at how much aluminum and steel are used in US manufactured autos, aircraft, and in most buildings, those tariffs will hit the American public like a ton of bricks.

 

Once more we will see Trump’s hair trigger approach to areas where he has absolutely no knowledge, and it’s a directed at the same people that put him in office.

 

Just like when Trump said that he didn’t want mentally ill people to have a weapon.  But what does Donald Trump do?  He got rid of an Obama executive order that kept mentally disturbed people from being able to purchase a weapon.

 

Canadian Prime Minister, Justin Trudeau called the tariff proposal “absolutely unacceptable,” using the same phrase as Foreign Minister Chrystia Freeland, who also threatened retaliatory measures if Canada isn’t exempted from the trade actions.

 

Trudeau, speaking at an event in Barrie, Ontario, said he had raised the issue of tariffs in the past, but didn’t indicate whether he had talked to Trump since the announcement.  “We will continue to engage with all levels of the American administration in the coming days so that they understand that this proposal is unacceptable,” he said.

 

But Lawrence Herman, a Toronto trade lawyer, said that he doubts Trump is interested in exempting Canada from the tariffs. Trump remarked this week in a meeting with US governors that Canada was already “very smooth” in its trade relations, whatever that means.

“We lose a lot with Canada. People don’t know it,” Trump said. “They have you believe that it’s wonderful, and it is — for them. Not wonderful for us — it’s wonderful for them.”  (Of course, as usual, Trump never offers any proof of what we are losing with Canada…..Fake News???)

 

Mr. Herman said he is convinced that if the tariffs remain, Canada will seriously retaliate.

 

Jean Simard, president of the Aluminum Association of Canada, said that his industry has been integrated into the US economy for more than 50 years and that the Pentagon considers Canadian aluminum production a strategic military supply that would affect the national defense.

“There’s no rationale,” Simard said. “It doesn’t make sense. It’s just Trump’s protectionism.”

 

“We’re by far the largest supplier to the US,” he said, with annual output of 3.2 million metric tons of aluminum coming from 10 Canadian smelters and 90% of that output heading south of the Canadian border. Canada supplies about half of US aluminum requirements, according to the US Aluminum Association.

 

Simard said that nine of 15 US aluminum smelters have closed in the past four years, but he blames their demise on a surge in Chinese aluminum production, and the fact that the American smelters faced very high electrical power costs because they had never been modernized.

 

If these Trump tariffs stand, look for big retaliations from Canada, and our European allies, in other areas where they have the clout.

 

Just another area requiring us to stay tuned-in regarding our ignorant commander-in-chief.

 

Copyright G.Ater  2018