A Breakdown of Trump’s Tariff Plan

Did you hear the good news? North and South Korea are reopening peace talks and negotiations for the first time in over a decade. Trump’s hard line tactics worked after all!

Oh, you didn’t know? That’s probably because mainstream media is trying its best to distract everyone from another of Trump’s extraordinary successes. Instead, they’re all focused on the proposed steel and aluminum tariffs.

Sigh. Ok. Let’s play along. Let’s look at the tariffs and try to unravel the tangled narrative that has been wrapped around a pretty simple concept.

As is often the case with Trump’s announcements, it’s difficult to pinpoint exactly what the end results will be. He has made it clear that he wants to place tariffs on steel and aluminum, but if his past moves are any indication, the numbers he is projecting now are significantly different from what we will ultimately see. So, we have to keep moving targets in mind.

At the moment, the numbers on the table are a 25-percent duty on steel and a 10-percent tariff on aluminum. The original statement vowed no exceptions, but officials from the White House have since suggested that Canada and Mexico may be exempt. Simply put, there’s still a lot up in the air. This is despite the fact that most experts expect a final draft of the tariff today or early next week.

Backlash

New tariffs are often met with grievances from those who stand to lose money. This is normal. Left-wing media, of course, is trying to blow everything out of proportion. They’re talking about igniting a brand new trade war with Europe. Way to stay predictable, guys. Anyways, Canada, Brazil and the EU have all vowed to take Trump’s tariffs before the World Trade Organization (WTO), and they’re likely to follow through on that promise.

If they do, the WTO will form a panel, like it always does, and try to negotiate a deal. The expectation here is that they will ultimately approve a tariff, but the numbers might be lower than what Trump initiates. Sound familiar? It looks like The Art of the Deal can work with the WTO too.

There does exist the chance that the WTO would side against the U.S. and strike down Trump’s tariffs. That would be the most interesting case. It’s difficult to predict how Trump would react, but we can all be confident he wouldn’t take such an outcome lying down. It’s very likely that Trump would be willing to unravel the authority of the WTO itself. If they have been paying attention, they’ll know that, and it’s why they’re likely to approve at least a modest tariff.

In addition to WTO grievances, the EU has listed random goods that they want to tariff from the U.S. in retaliation. So far these items have included cranberries, peanut butter, bourbon and Harley Davidson motorcycles. It’s a random list and a wholly immature reaction.

Hypocrisy

This is really where we get to the meat of the situation. We’ll start with Canada and Mexico. The tariffs would be a break from NAFTA, so they have legitimate concerns. That said, Trump has been warning them about relying on the old agreement since before he took office. Maybe they’ll finally listen.

As for the EU, their response is plain ridiculous. As Nigel Farage has already indicated, the EU has had steep tariffs on U.S. imports for years. Steel in particular faces a 16 to 25 percent tariff right now (depending on many factors). Trump is simply matching them to give U.S. steel a chance to survive.

This tells us everything we need to know about the EU. For roughly 20 years, they have bullied their way to economic significance. They use the most aggressive protectionism in the world to keep a number of socialized states afloat, all while draining the resources of the region’s only real producer, Germany.

The idea that the U.S. might meet just one of their tariffs has set them in a tizzy. They’re so spoiled and used to seeing us roll over (thanks Obama!) that they literally don’t know how to react to Trump. If they go through with random tariffs, they will in fact be the ones sparking a trade war. And, since the reality of that war is Germany (minus the leeches of the EU) versus the U.S., there’s no question about who will win.

Real Motivation

Most of this is beside the point. Trump is doing what he does best. The tariff does stem from a genuine motivation to help U.S. manufacturing, and it’s probably impossible for him to do that without at least some change in international trade policy. That’s the small picture.

The big picture brings us back to NAFTA. In the end, Canada and Mexico are still our top trade partners, and NAFTA has prevented that relationship from flourishing the way it could. In fear of Trump’s negotiating prowess, both countries have been stalling on making any real changes to the status quo. The biggest reason Trump is initiating this tariff is to shake Canada and Mexico into action. He’s tired of waiting, and if this isn’t enough, you can expect even bigger moves from the President until they finally come to terms and fix our existing trade agreements.

It’s frustrating to have to go through this every time. Remember how devastating the tax deal was? How did that turn out? What about deregulation policies? Or restructuring the EPA? We could go on for hours.

The long and short of it is that Trump has had nothing but winners in regards to the economy. He has also far surpassed expectations on foreign policy. The world is heading towards a stability we haven’t seen since the fall of the Berlin wall, and still, the rigid left won’t budge. If he cured cancer, they’d be up in arms on the importance of letting people die slow and horrible deaths. There’s no pleasing them. There’s no reasoning with them, and we should stop trying. We’ll keep supporting Trump until we’re as tired of winning as he promised we would be.