On Friday the president of the European Commission specifically named three American products that would be targeted for retaliatory tariffs if Trump went ahead with his gambit on steel and aluminum. One is blue jeans; the second is bourbon, manufactured most famously in Kentucky; and the third is Harley-Davidson motorcycles, whose headquarters is in Wisconsin. (Orange juice, produced in the perennial swing state of Florida and targeted by Europe after George W. Bush imposed steel tariffs in 2002, is also in the mix.)
Do we know any influential politicians from Kentucky and Wisconsin?
Why, here’s one now.
House Speaker Paul Ryan made a rare public break with President Donald Trump on Monday, rejecting the president’s plan for tariffs on steel and aluminum.
Ryan, a Wisconsin Republican, is pressing the White House to back down.
“We are extremely worried about the consequences of a trade war and are urging the White House to not advance with this plan,” AshLee Strong, Ryan’s spokeswoman, said in a statement. “The new tax reform law has boosted the economy and we certainly don’t want to jeopardize those gains.”
He’s got his work cut out for him. POTUS seemed itching for a fight on Saturday:
If the E.U. wants to further increase their already massive tariffs and barriers on U.S. companies doing business there, we will simply apply a Tax on their Cars which freely pour into the U.S. They make it impossible for our cars (and more) to sell there. Big trade imbalance!
— Donald J. Trump (@realDonaldTrump) March 3, 2018
I’m sure the U.S. retaliating against Europe for retaliating against the U.S. will be the last round in the retaliation cycle that inevitably ensues during a trade war. But just in case it isn’t, read Keith Hennessey. There’s no reason to think the damage will be limited to jeans/bourbon/Harleys, notes Hennessey. They’re on the EU’s hit list but the EU is just one trade partner. Other trade partners affected by the new tariffs — which means everyone in theory, as the White House has said there’ll be no exemptions for allies — might target other industries. In which case, how can Wilbur Ross and Peter Navarro go on TV and blithely assure everyone that the economic fallout will be “no big deal”?
What makes Ross think retaliation would be limited only to these products, and only to the European Union? America’s largest sources of imported steel are Canada, Brazil, South Korea, Mexico, Turkey, and Japan. (China is 11th.) If any of them retaliate, both the number and scope of products affected increase.
Second, Ross concedes that the pain of retaliation will be concentrated on specific firms, and then uses that as a reason not to care. Are Jim Beam, Heaven Hill, Levi’s, and Harley-Davidson less valuable to America than Nucor, ArcelorMittal (based in Luxembourg), U.S. Steel, and Gerdau (based in Brazil)? Why should the president force these first four firms to suffer so the steel giants can avoid competition? Indeed, the smaller the company, the more vulnerable it may be to foreign retaliatory actions.
Even in a fantasy world where no one retaliates against the U.S., Hennessey points out, the effects will be felt far beyond soup aficionados: “Farm equipment will cost more. Homes and office buildings will be more expensive to build, buy, and rent. Bridges, rails, and tunnels will cost more. So will cell towers, pipelines, power plants, and water pumping stations.” How much more will the Pentagon pay for materiel as the price of steel and aluminum rises?
The good news for free traders is that Congress could undo this. Tariffs aren’t a power constitutionally allocated to the president. Until the New Deal, it was Congress that was chiefly responsible for imposing them. Under FDR the power began to drift towards the executive branch and the legislature has showed no interest in reclaiming it, partly because it’s easier for our gutless congressmen to let the president take the political heat on trade, partly because the cult of the presidency has encouraged Americans to look to the White House for leadership on all things, and partly because Congress abused its tariff power for parochial political ends many times prior to the 1930s. Trump’s authority to impose the steel and aluminum tariffs exists not under Article II but under the 1962 Trade Expansion Act, which grants the president unilateral power to slap tariffs on foreign goods for “national security” reasons. What Congress hath given, though, Congress can take away — if it can muster the balls to do so. Some Republicans are chattering about it:
Members said the chamber would in the coming weeks explore possible changes to the provision of the Trade Expansion Act of 1962 — known as Section 232 — that allows the president to impose unlimited tariffs if a federal investigations determines it poses a threat to national security.
“There are some that are proposing some action,” Sen. Thom Tillis, R-N.C. said, who said members are specifically looking at possible revisions to Section 232. “We haven’t gotten into the specifics.”
Senate Republicans have for weeks contemplated possible actions the chamber could take to push back against — or at least influence — actions the Trump administration has taken unilaterally on trade, including what oversight authority they have over the North American Free Trade Agreement should the White House opt to withdraw from the treaty.
Normally I’d put the odds of congressional Republicans standing up to Trump on anything at 20 percent, but standing up to him on his pet cause of protectionism? *Maybe* five percent. They can ignore him on guns because much of the base is on their side of that issue and Trump, as usual, isn’t deeply ideologically committed to his new position. He is deeply committed to the cause of protectionism, though, and there’s plenty of support for it among the GOP’s blue-collar base. If Republicans mount an effort in Congress to claw back tariff power from the executive, particularly with support from Schumer and Pelosi, Trump will go berserk. They’d be risking a GOP civil war in a midterm year, knowing that victory would require them to humiliate the president by overriding his veto with a two-thirds vote in both chambers. Ryan and McConnell would be better off in the minority if they’re going to try something like that since then Pelosi and Schumer would be the chief lightning rods for Trump’s and the base’s wrath. But there’s nowhere to hide now, so they have a hard calculation to make: Would their midterm chances be better if they (a) overrode Trump’s policy, making an enemy of the president but preserving economic gains from the GOP tax bill or (b) stood down on Trump’s tariffs, remaining on the right side of his fans but risking an economic downturn that might come back to bite at the polls in November? Good luck, boys.
Here’s POTUS, who assured America three days ago that “trade wars are good,” now reassuring them that he doubts there’ll be a trade war.
President Trump: "I don't think you're going to have a trade war, no." pic.twitter.com/aBS9GbmaGH
— NBC News (@NBCNews) March 5, 2018
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Source : https://hotair.com/archives/2018/03/05/paul-ryan-trump-lets-rethink-tariffs/