Damnit Donald: Trump Believes “Trade Wars are Good”

Raeesa Ashique - 3B Electrical
Posted on: March 11, 2018

We are back once again with “Damnit Donald”, chronicling the absurdities and scrapes which have characterised every day of Donald Trump’s presidency.


On Thursday, March 1, President Trump signed an order to enact a 25% tariff on steel imports and a 10% tariff on aluminum imports, sending shares down around the world. They will go into effect on Friday, March 23.

Under the rarely used section 232 of the Trade Expansion Act of 1962, the president can restrict imports in the face of a national security threat. By definition, these tariffs are temporary; only Congress can issue permanent tariffs.

Defending his decision, Trump tweeted, “Our Steel and Aluminum industries (and many others) have been decimated by decades of unfair trade and bad policy with countries from around the world. We must not let our country, companies and workers be taken advantage of any longer. We want free, fair and SMART TRADE!”

The trade deficit, along with poor treatment at the hands of other countries, forced Trump’s hand in order to protect the interests of the United States. Trump also believes that this move will not result in a trade war; regardless, the US would find a trade war “easy to win”.

According to Wikipedia, “A trade war refers to two or more countries raising or creating tariffs or other trade barriers on each other in retaliation for other trade barriers.”

The BBC’s business correspondent Theo Leggett comments that negotiations are best carried out through a rules-based system, which is why the World Trade Organization (WTO) exists. Trade barriers have the potential to harm companies on both sides of the dispute.

The WTO called on member states to “stop the fall of the first dominoes of a trade war”, which may be difficult to reverse if other countries join the US.

Ironically, Trump violates many campaign promises by following through with the tariffs. He will be removing jobs: while the American steel industry employees 140,000 people, its steel-consuming industry employs 6.5M. Therefore, he may be helping the first group, but at the expense of the second. Additionally, raising taxes on steel and aluminum will hurt workers of the automobile industry in Ohio, Michigan, and Pennsylvania—industries he promised to protect. American manufacturers may opt to move across the border.

And, according to one independent study, five jobs will be lost for every one job gained.

Canada is the largest supplier of steel and aluminum to the US. Prime Minister Justin Trudeau said that he “forcefully defended” the Canadian industry in a phone call with the President.

For now, Canada and Mexico may be exempt to allow “ongoing discussions” about trade. Trump said explicitly, “We’re going to hold off the tariff on those two countries to see whether we can make the deal on NAFTA.” NAFTA (North American Free Trade Agreement) negotiations are currently in their eighth round, as the three countries attempt to update the twenty-year-old trade agreement.

The UK will also be seeking an exemption.

Other trade partners of the US are angry, some threatening retaliation.

European Commission head Jean-Claude Juncker said, “We will not sit idly while our industry is hit with unfair measures that put thousands of European jobs at risk.”

French Economy Minister Bruno Le Maire said there would “only be losers” in a trade war, calling for a “strong, coordinated, and united response from the EU.”

Zhang Yesui, spokesperson for China’s National People’s Congress, said China would take “necessary measures if its interests were hurt.”

Even Republicans had to argue with this decision. US Speaker of the House Paul Ryan is “extremely worried about the consequences of a trade war”, because it could undermine economic gains introduced by the new tax reform law.

For some background, the US imports steel from over one hundred countries; they bring in four times more steel from abroad than they export. The steel industry has suffered since 2000, with production dropping from 112M tonnes to 86.5M tonnes in 2016. Employment has also dropped, from 135,000 workers to 83,6000. The US Department of Energy says the steel industry is still recovering after 2008.

North Korea

President Trump has accepted a meeting with North Korean leader Kim Jong-un.

Translation: the two most volatile and temperamental men in the world will be sitting down together.

Assuming the meeting takes place, this will mark the end of a 70-year standoff between the two countries; no other president has met with a North Korean leader in person.

This was announced by the South Korean delegation to the White House on Thursday, March 8, coming as a surprise to everyone, including the Trump administration. Secretary of State Rex Tillerson was on his first official trip to Africa when the announcement was made to reporters; when asked about it, he said, “That is a decision the president took himself.”

Trump tweeted: “The deal with North Korea is very much in the making and will be, if completed, a very good one for the World. Time and place to be determined.”

Technically, everything is yet to be determined. We do not know when it will take place, although an initial statement from the South Korean delegation suggests as early as May. We do not know where. We do not know who will be involved. And, perhaps most significantly, we do not know what North Korea wants in exchange.

Kim says he is “committed to denuclearization”, although there is the valid concern that Trump will fall into a trap—North Korea may agree to throw out their nuclear weapons for now, but who will hold them accountable if they change their mind later, or lose patience, or believe that the American end of the deal has not been upheld? Their track record for following rules leaves much to be desired.

The world has been concerned about North Korea’s nuclear programme for decades. They have conducted six illegal underground nuclear tests, fired numerous long-distance missiles, and claim to have the capability to nuke the US.

Pyongyang has not yet released a statement.

One may wonder why Trump agreed to such a meeting. Or, one may not wonder, simply accepting that Trump is Trump; there is little point is attempting to understand the inner workings of his mind. Either way, this appears to be quite in-character: Trump is obsessed with being the greatest deal-maker. For example, he once said that resolving the Israel-Palestine crisis is “maybe not as difficult as people have thought”. (He failed to do so.) He is obsessed with being the greatest history-maker. For example, he claimed to have the largest inauguration crowd. (This is a lie, by the way.) At the end of the day, he wants to be the best. It does not matter that this is not a game: Trump wants to win.

There are no comments yet, add one below.

Leave a Comment