Thursday, May 31, 2018

What in God's name is he doing?



The Trump administration will levy hefty steel and aluminum tariffs on the European Union, Canada and Mexico starting on Friday, a move likely to lead to retaliation and risk the future of the North American Free Trade Agreement (NAFTA).

Commerce Secretary Wilbur Ross on Thursday said President Trump has decided to end the temporary exemptions for the three key trading allies despite their two months of lobbying to avoid the tariffs.

“We look forward to continued negotiations with Canada and Mexico on one hand and with the European Commission on the other hand as there are other issues we need to get resolved,” Ross told reporters on a conference call.

Ross said the White House would need to see the reactions of Canada, Mexico and the 28-nation European bloc before determining what to do next.

  The Hill
I think we can assume the reactions won't be good. In fact, I think we already know exactly what their reactions will be.
The trading partners have all warned the U.S. that they will impose retaliatory tariffs on U.S. exports if the U.S. goes through with the steel and aluminum tariffs.

The EU is expected to quickly retaliate with promised tariffs of about $3.3 billion on iconic American products such as bourbon, jeans and motorcycles.

[...]

The decisions have prompted a pushback from Republicans in Congress, who are worried retaliation from trading partners could hurt farmers in particular.

[...]

The Section 232 law, which is rarely used, allows tariffs to be placed on imports in the name of national security. Trump is considering the same law to employ tariffs on automobiles.

[...]

Ross said that Trump can “do anything he wishes at any point subsequent from today” on whether to impose tariffs and quotes.
Can he get American steel and aluminum production up to levels that will cover the loss of imports in one day?  Can he find markets for the loss of exports in one day?

And, hey, if that's not enough...
Trump wants to impose a total ban on the imports of German luxury cars, according to a new report from CNBC and German magazine WirtschaftsWoche.

[...]

A number of German automakers have plants in the U.S., including Mercedes-Benz in Alabama and BMW in South Carolina.

[...]

Several U.S. and European diplomats told the news outlets that Trump told French President Emmanuel Macron about his plans last month during a state visit.

Trump reportedly told Macron that he would maintain the ban until no Mercedes-Benz cars are seen on Fifth Avenue in New York.

  The Hill
Who is he punishing?

...but hey, do what you want...you will anyway.

UPDATE:










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