Trump signals steel tariffs but unclear strategy

Licensed File Photo

On Tuesday, President Trump met with senators to discuss strict new proposed tariffs on foreign steel and aluminum. Part of the meeting was open to reporters.

Like any event involving the president, this convening quickly became theatrical in nature. Senators of both parties expressed a wide array of views on trade while Trump called back in something of a disjointed Greek chorus. Nevertheless, senators left convinced that Trump would do something about steel tariffs but not too much. Steel and mining stocks jumped upward for a time, but then leveled off. In other words, still more smoke and yet no fire.

The Hill produced a fascinating recap, as did the New York Times. Last week, I wrote about how complicated (and porous) these international tariff considerations can become.

The fascinating dynamic that came out of just the public portion of this meeting is worth noting.

Trump is obviously for new tariffs on steel and aluminum. He’s light on specifics, but his rhetoric suggests he favors the most aggressive tariffs possible.

His party, however, doesn’t. The meeting seemed to consist of Republican senators explaining how disastrous large scale tariffs would be. They cited President Bush’s steel tariffs in 2002. Bush had to pull them back a year later when American industry howled about price and supply issues.

Democratic senators seemed more friendly to Trump’s tariffs, but that didn’t get them anywhere with the president. Trump managed to make a few snide comments about other issues in their direction despite their obvious area of agreement.

Trump doesn’t care whether the international trading partner is an ally, a rival, or an adversary. He reserved some of his harshest words for our friendly neighbor Canada. Republican Sen. Ron Johnson of Wisconsin had to remind him that we have a major trade surplus with Canada that is advantageous to the United States.

Trump also chastised countries like Vietnam that can sometimes serve as middlemen between subsidized Chinese steel and American markets. Though he also appeared confused about how this arrangement works in a rambling explanation.

The point I take away is that Trump says he’s for tariffs but is surrounded by people who want to keep those tariffs modest. Modest tariffs might be the right move, but they aren’t going to change much about the nature of the international steel market. It’s clear that powerful people want to keep buying cheap steel.

In any event, Trump is about to do something. The deadline for a decision on the new tariffs is in mid-April.


Comments

  1. Two thoughts on what you refer to as theatre:

    “It’s always good to be underestimated”.
    “America’s enemies must never know our plans.”

    • independant says:

      You nailed it. Being underestimated is one of the great keys to success in business and life. The hard thing is after a couple of successes people tend to stop underestimating you as much. The funny thing for me to watch with Trump is that folks particularly on the left but also plenty on the right let their perceived intelligence get them enraged and convinced he will fail and go away. Thus they actually create a never ending cycle of underestimating the man and misunderstanding a large part of this countries population. They then take that frustration and rage and convince themselves that anyone who doesn’t hate him must be a terrible person who lacks their high intellect.

Speak Your Mind

*