Senseless on Steel

National Review Online

Friday, June 01, 2018

Originally President Donald Trump’s tariffs on steel and aluminum exempted imports from Canada, Mexico, and Europe. No longer. The administration has broadened the application of its tariffs even as their strategic and economic costs are becoming more apparent.

The law gives Trump the authority to impose tariffs to protect national security. These tariffs are, however, an abuse of that law. The Department of Defense has explained that the military needs only 3 percent of our domestic steel and aluminum production, and our largest supplier, Canada, is an ally — albeit one that now has reason to be miffed with us. The steel and aluminum tariffs have undermined our ability to make common cause with other countries against Chinese mercantilism, and even aided China’s campaign to gain influence among them.

Economically, we will pay for these tariffs twice over. Companies that rely on steel and aluminum will pay higher prices — and those companies are responsible for far more employment than the steel and aluminum industries themselves. For that reason, President George W. Bush’s steel tariffs were estimated to cost more jobs than they protected, as were President Barack Obama’s tire tariffs. There is no reason to expect happier results this time. And other countries are also imposing retaliatory tariffs on us.

Most congressional Republicans think the tariffs, by hurting their constituents, will also hurt their reelection prospects. They would like to campaign on today’s strong economy and the tax and regulatory policies that have helped to bring it about. The president’s new trade taxes counteract those policies.

On trade as on other matters, Congress has over the years given the executive branch too much authority that is too prone to abuse. In other areas, the president and his appointees have been effective foes of the arbitrary and capricious executive power — the unaccountable “administrative state” — that has thereby been unleashed. When it comes to trade, they have decided instead to illustrate the dangers.