The presidential campaign promise is one of the most overrated aspects of politics, especially when the individual seeks the office for the first time. The perspective from the Oval Office is unlike any other in the world, let alone the campaign trail.
Impervious to this political reality, President Donald Trump, vowing to keep a campaign promise said recently he would impose a 25% tariff on steel imports and 10% on aluminum.
The president offered in one of his tweets that winning a trade war is easy. It is certainly easy to enter into a trade war, but invariably no one wins.
Protectionism has never worked. Perhaps the most glaring example was the Smoot–Hawley Tariff Act of 1930 that exacerbated the Great Depression.
The president’s supporters who take him seriously but not literally might not understand the rest of the world has not caught up to that credo. A phenomenon that probably began with Abraham Lincoln still holds today: what the President of the United States says matters to the rest of he world. Therefore, foreign leaders do not possess the luxury of nuancing his meaning.
According to the Washington Post, Defense Secretary Jim Mattis and Secretary of State Rex Tillerson privately warned senior trade officials that the proposed tariffs on steel and aluminum could endanger the U.S. national security relationship with allies.
Canada, Brazil, South Korea, and Mexico are America’s top four steel importers, combining to import 48% of the steel to the U.S. The tariffs, if implemented, would definitely hurt U.S. allies the hardest.
There is no doubting the steel industry is in decline. It directly employs about 140,000 workers, according to Bureau of Labor Statistics. But the number of steel-related jobs today is in millions. Unfortunately, the risk vs. reward emanating from this protectionist policy doesn’t pass the math test.
Campaign promises notwithstanding, tariffs would ultimately hurt Americans. Prices would rise on everything from a can of beer to F-35 jets.
The protectionist argument rivals the illegal immigration debate. We’re happy to hide behind nativist invectives but no one wants to pay more for a basket of strawberries. Likewise, our empathy for the steelworkers is qualified. It has a shelf life that expires when we must pay more at Wal-Mart for flat screen televisions.
“Make America Great Again” has been the president’s theme since he sought the office. No matter how “great” is defined, what he’s proposing violates any understanding of that amorphous declaration.
The president’s proposal demonstrates no understanding of 21st century economic reality. China is crafting a vision for the next 100 years, with investment toward future growth. Meanwhile, the president is offering America an outlook for which the prerequisite is looking myopically in his rearview mirror to a time that in the best-case scenario began 50 years ago.
He receives applause lines going into economic depressed areas in the rust belt touting the virtues of “clean coal” and pernicious tariffs, both are tantamount to the Ford Motor Company announcing the return of the Edsel with no discernable improvements from the original 1957 model.
Beyond the economic considerations, the proposed tariffs are significant because it reflects a shift in the president’s behavior. In his initial 13 months, the president has reserved his reflexive, off-the-cuff ruminations for matters ranging from the size of the crowd at his inauguration to the Mueller investigation. But this behavior is now bleeding into public policy that could potentially have catastrophic effects on the world economy.
National Economic Council Director Gary Cohn resigned last week reportedly after the dispute over the proposed tariffs. Speaker Paul Ryan urged the president to be more “surgical” in his approach. But other than resigning in protest or offering a different perspective, the president is within his constitutional rights to start a trade war, at least in the short-term.
The president appears increasingly isolated in his decision-making. When he took office, the hope among many of his supporters was that he would put good people around him that would keep him focused. That rudderless vessel sailed some time ago.
His high turnover among key staff in such a short time period, even by presidential administration standards, gives the impression of a self-fulfilling prophecy based on the president’s management style.
Maybe we’re witnessing president making good on another campaign pledge. In 2016, candidate Trump stated: “My primary consultant is myself and I have a good instinct for this stuff.”
But as for tariffs, what Sidney Greenstreet said to Humphrey Bogart in the movie Casablanca remains true: “When will you realize that in this world today isolationism is no longer a practical policy?”