Monday, March 5, 2018

Trump Links Tariffs To New NAFTA Deal

Any speculation that President Trump's talk of tariffs might be gone by today evaporated this morning as the president suggested that removal of tariffs would be linked to a renegotiation of NAFTA. Often, Trump partially walks back particularly outrageous statements after cooler heads in the White House have prevailed, but it does not appear that will be the case on trade.

“We have large trade deficits with Mexico and Canada,” Trump said in a tweet. “NAFTA, which is under renegotiation right now, has been a bad deal for U.S.A. Massive relocation of companies & jobs. Tariffs on Steel and Aluminum will only come off if new & fair NAFTA agreement is signed.”

“Also Canada must,” the president continued in a second tweet, “treat our farmers much better. Highly restrictive. Mexico must do much more on stopping drugs from pouring into the U.S. They have not done what needs to be done. Millions of people addicted and dying.”

Per Reuters, Canada and Mexico rank first and fourth in steel exports to the US. China ranks tenth.

Shortly after the president's tweets, Peter Navarro, director of the White House National Trade Council, appeared to contradict the president's proposal to link the tariffs to a new NAFTA. “I understand if we get a great NAFTA agreement, and (US Trade Representative Robert) Lighthizer is trying to do that, that would be a great thing for the American people,” Navarro said on “Fox and Friends,” “but at this point in time, 25 percent on steel, 10 percent on aluminum, no country exclusions, firm line in the sand.”

The president kept up a trade war of words on Twitter over the weekend with a tweetstorm that threatened tariffs on European cars and said that American “steel and aluminum industries are dead.” A Commerce Department report on the steel industry shows that US steel production increased by almost four percent in 2017 while steel imports fell by 11 percent.

Last week, Bloomberg reported that there was fierce debate in the White House over implementing the tariffs, leaving hope that pro-trade aides and business leaders could persuade the president to change his mind. Even a sharp decline in the stock market after the announcement does not seem to have swayed Mr. Trump.

Business leaders and economists say that the tariffs will hurt the US economy by destroying jobs and lowering the standard of living for American consumers. Some economists have likened tariffs to a wartime blockade. Henry George wrote, “What protection teaches us is to do to ourselves in time of peace what enemies seek to do to us in time of war.”

Commerce Secretary Wilbur Ross, who was a registered Democrat until he was picked by Trump to head the Commerce Department, left little hope that Trump would change his mind about the tariffs, which do not require congressional approval.

“Whatever his final decision is, is what will happen,” Ross said on NBC's “Meet The Press.” “What he has said he has said; if he says something different, it'll be something different.”

Originally published on The Resurgent

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