Unlikely Trump will change course on tariffs

Adjust Comment Print

But executives at the Fontana steel manufacturer said the tariff, meant to protect American steel production, poses a unique burden to their business, one that won't be faced by other US steel manufacturers. They're nearly certainly the reason that shares of U.S. Steel (NYSE: X) are up 15% over the last 30 days, why AK Steel stock has gained 10%, and probably explain why Alcoa has notched a 6% jump as well - but not everyone is impressed. Here is Dr. Je Hyun-jeong from the Center for Trade Studies and Cooperation at the Korea International Trade Association to analyze what the U.S.' new tariff policy is all about. In fact, the trade action is affected by the USA president's decision.

Since then, our two economies have become increasingly more integrated - underpinned by well-established and lucrative supply chains. S. free trade deal of 1988, this country has concentrated on integrating itself seamlessly into the American economy.

Mr. Trudeau also took Canada's case to US cable channels on Monday with appearances on MSNBC and CNN. To my Foolish eye, though, that still leaves U.S. Steel stock looking like the most expensive stock in a highly valued metals sector - and the one most vulnerable to a fall. That lasted for about three months before the Nixon White House unceremoniously scrapped the surcharge because of unrelenting worldwide opprobrium and pressure.

The Office of the U.S. Trade Representative sent a proposal to the White House seeking tariffs on various Chinese products, restrictions on investment in the U.S.by Chinese companies and limits on visas for certain Chinese nationals, a source familiar with global trade said.

Both Germany and France backed the European Union position, with German government spokesman Georg Streiter telling reporters in Berlin that "The exact nature of the (EU) steps will be decided after a close analysis of the American measures", according to Reuters. Instead, they were part of a continent-wide production process that rewarded low costs and low wages.

Last year's steel exports fell 30 percent from 2016 to 63 million tons, but that still was one-quarter of the global total and more than twice Japan's 30 million tons.

A European Commission spokesman said Trump was "cherry-picking" particular tariffs to highlight differences, and maintained that average tariffs were very similar on each side of the Atlantic at about 3.0 percent for products into Europe and 2.4 percent into the United States.

Administration authorities and others have stated the impact of greater steel and aluminum rates on the cost of a vehicle will be modest. Both would concede to the Chinese an outsize role in forging new, less desirable rules of the road in the global trading system and poorly serve America's interests. But there are more than six million jobs indirectly tied to a host of steel-related businesses, from steel girders for buildings to steel wiring for concrete reinforcement.

Trump points out how this has created America's huge trade gap with foreign countries.

That is where President Trump's complaint is right.

"In some places trade has been to blame for the pains of globalisation or they used it as a scapegoat or they think we can live behind walls and borders", European Trade Commissioner Cecilia Malmstroem said at a trade conference in Brussels.

Trade across borders is undeniably good, as Adam Smith taught us some 250 years ago. But neither am I suggesting that we cave into Trump's plainly bullyish tactics and threats of retaliation.

The U.S. Constitution gives Congress, and only Congress, the power to regular commerce, but significant pieces of that power have been outsourced to the executive branch over the last four decades.

Tom Campbell is a professor of economics and a professor of law at Chapman University.