Tusk tells Trump: Make trade, not war


Naysayers argue tariffs will raise prices, spark a trade war and do nothing to bolster America's military preparedness - the official rationale for the move. America's steel and aluminum industries are not in such dire condition. McKinsey & Company explain that most producers "lack the cash for investments needed to remain viable in the long run". A confrontational approach, however, stands to do much damage to Mr. Trump's eventual successor that - even if they were a professed multilateralist - they would face a steep uphill battle to normalize the transatlantic relationship.

Tariff bashers claim that the USA could rely on these foreign suppliers in war. American manufacturers have to compete with subsidized foreign manufacturers. Japan, South Korea, China, Taiwan, Germany and Brazil were hardest hit. Should our nation's victory in war hinge on them? That's now. But in a major military conflict, those needs would soar. The reason domestic steel production hasn't grown isn't because of cheap imports; it's the fact that the United States market hasn't grown. Tariffs are not the right way to tackle the global oversupply of steel. That's questionable. The opposite is more likely to happen, industry experts suggest.

Tariffs are generally not a good way to promote domestic industry.

The safeguard would also satisfy the political objective of President Trump to be seen to be doing something for the steel industry.

The document does not name China, but zeroes in on a central complaint that Trump's "America first" administration has raised regarding Beijing's WTO membership.

His administration is negotiating to revamp the North American Free Trade Agreement and last week announced the imposition of tariffs on steel and aluminum imports.

Don't hold your breath for help from the World Trade Organization - a conclave of 164 nations, mostly poor and anti-American, empowered to impose binding trade rules. But the average USA consumer also benefited from cheaper import prices for his thousands of electronic gadgets and other goods. Making steel that way is like using the oven to bake a couple of cupcakes instead of a full batch.

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Do the math. While imported steel will cost more, imports will drop from one-third to one-fifth of all steel used here.

China, which had a $375 billion trade surplus with the USA, is the culprit regarding steel and aluminum.

The list covers $850 million worth of steel products that Trump says he is supporting with his tariffs, with other large targets including more than $500 million worth of bourbon in different sized containers, nearly $200 million in sea-going motorboats and motor yachts, nearly $200 million in "eye makeup preparations" and more than $140 million in "lip make-up preparations". There's no concrete evidence that would happen. The president is bringing everyone to the negotiating table.

That helped continue a trend of flattening yield curves on USA government bonds, with the spread between two- and 10-year Treasury yields down 2.6 basis points to 55.7 basis points from Tuesday's close.

And, he added, instead of threatening a trade war, Trump should restart the trans-Atlantic free trade negotiations between the US and the European Union which began under former president Barack Obama but were never finished. This is against the free competition touted by free-trade advocates.

The next big protectionist move from the United States may come in a few weeks when Trump decides what action, if any, to take against China after considering a report on China's trade and intellectual property practices issued by the Commerce Department. You wouldn't know it, listening to the WTO.

Trump has said he wants to "create a level playing field" for American companies and American workers.