We can all take a deep breath and relax now on this side of the border; Canada will be given an exemption from Donald Trump’s tariffs on steel and aluminum.
“Donald Trump doesn’t care much about the rules”, he said.
In other words, the objective logic of the U.S. move, based on the invocation of “national security”-the tying of trade to military considerations-leads to a breakdown of the entire post-war trading system”.
While the WTO’s General Director Roberto Azevedo stated that if Trump would take such a step, he would take on a serious risk to enter an economically damaging trade war, IMF President Christine Lagarde said other countries’ response to the U.S.’s plan with new customs tariffs will have serious macroeconomic effects. Trump also reiterated his commitment to killing NAFTA if no satisfactory deal is reached “and then we’ll start all over again or we’ll just do it a different way”. Or we’ll just do it a different way. Also discussing opening up Japan to much better trade with the U.S. now have a massive $100 Billion Trade Deficit.
The references to security are critical.
The national security argument seemed weak when applied to South Korea or European countries that have formal military alliances with the US. He called tariffs the “wrong way” to tackle the problem of cheap steel and aluminum being dumped on the U.S.
Treasury Secretary Steven Mnuchin earlier said he expects countries in addition to Mexico and Canada to be exempted in the next couple of weeks. “Tit-for-tat retaliatory measures don’t profit any country”.
Two polls released this week say the tariffs are unpopular.
Sasse said he believes there’s an impression in the White House that there is a victor and loser in every trade agreement. “In particular, they pale in comparison to the scale and scope of the protectionist policies of President Ronald Reagan’s administration in the 1980s”, Rodrik wrote on Friday. He did not explain how those round numbers managed to survive intact, even after the formula was later upended by the exclusion from tariffs of major suppliers.
The EU is also maintaining a threat of counter-measures that would target USA imports ranging from maize to motorcycles, and may publish its list next week to allow industry and other interested parties to give their input.
By the time Trump formally implemented the tariffs on Thursday, his position had shifted from his initial proposal to hit allies and adversaries alike with the tariffs.
Trump tweeted that he spoke with Japanese Prime Minister Shinzo Abe, saying they are “discussing opening up Japan to much better trade with the U.S. now have a massive $100 Billion Trade Deficit”.
“Today is a step forward”, Chrystia Freeland, Canada’s foreign minister, told reporters in Toronto Thursday.
The top European Union trade official Cecilia Malmstroem said the entire bloc, as a “close ally” of the U.S., “should be excluded” from the tariffs, and vowed to “seek more clarity” from Washington.
“This work continues and it will continue until the prospect of these duties is fully and permanently lifted”. Forcing Mexico to pay the tariffs, however, would make it very hard to complete NAFTA talks, the official said.
When proposed tariffs were initially announced, stock markets went into a tail spin on concerns they would ignite a global trade war. Melissa Henson, a spokesperson for the Parents Television Council, said that the video, punctuated by comments from Trump pointing out how violent the scenes were, shocked the group to silence. He said US negotiators have the system in their sights, as they see it as an unfair advantage Canadian farmers have over Americans.