Understanding the Trump Trade Doctrine

Kelly Barichello

Kelly Barichello

Canada, for example, is the top USA source for aluminum and steel imports, so Trump exempted it from the tariffs announced, but only temporarily, saying: "We're going to hold off the tariff on (Canada and Mexico) to see whether we can make the deal on NAFTA".

When Trump announced the 10 per cent tariffs on aluminium and 25 per cent on steel, he said Canada and Mexico could be exempted permanently if the renegotiation of the North American Free Trade Agreement (Nafta) is successful.

Mark Zandi, chief economist at Moody's Analytics, said earlier this month that the us may lose up to 150,000 jobs if trade partners including Europe and others such as Japan retaliate against Trump's tariffs.

Trump's tariffs, like his hardline NAFTA demands, have the prospective to turn the internationally integrated auto industry upside down.

"This is something that we take very seriously, because it does come and directly impact on the great Canadian workers, the great Canadian industries that we count on", he said.

A senior government official told The Globe and Mail on Monday that Ottawa is consulting widely with industry executives on the best measures to combat an expected flood of offshore steel and aluminum. The U.S. Office of the Trade Representative has accused China of infringing on U.S. intellectual property rights, including the widespread counterfeiting of goods.

"Without the capacity cutting, there would have been much more production than there is now", said Wang Suzhen, an analyst for Mysteel, a news service that follows the Chinese industry.

The EU has warned that it stands ready to slap "rebalancing" tariffs on about 2.8 billion euros ($3.4 billion) worth of U.S. steel, agricultural and other products, like peanut butter, cranberries and orange juice.

"We thank the president for taking decisive and meaningful action to address the massive flood of dumped and illegally subsidized steel imports into the United States", Nucor chairman, president and chief executive officer John Ferriola said. The profession generally views trade as helpful to both partners and the history or tit-for-tat trade tariffs as a good reason to avoid making the same mistake again. US primary production of aluminum rose steadily from the post-war era until around 1980, when it began a steady decline.

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So far, though, Trump has shown more interest in trade war for its own sake than in actually helping U.S. companies compete. He can't have both - and you can be sure China knows which option it prefers. GATT was superseded by the World Trade Organization in 1995. Currently, US steel companies command only 2 percent of world exports, compared with 24 percent by China.

Incidentally, also Thursday - the day Trump signed his metal-tariff proclamation - the remaining 11 members of the pact signed a new version of the same trade deal.

So far, the USA government has not even been able to give its trading partners, including Europe, a set of guidelines that would allow them to win exemption. The World Bank reports that China imposes more than twice the level of tariffs on USA products as the US does on China's, and Mexico nearly three times.

Now, I'm not advocating for Canada to recklessly get itself involved in a widespread trade war with our neighbour and best customer.

Malmstroem said she told Lighthizer that "the European Union must be excluded" from tariffs because it is a close US ally.

But are Trump's new tariffs good, bad or just ugly?

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. That's set off a race for US allies to plead for special treatment, while China has warned of "strong" measures to protect its interests. Standing with Trump are workers, left, Vice President Mike Pence, Treasury Secretary Steven Mnuchin and Commerce Secretary Wilbur Ross.

The writer is blog editor for the United Steel Workers.

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