President Donald Trump has said that something needs to be done to even what he views as a global trade imbalance between the United States and other countries. And that “something” is steep tariffs on steel and aluminum, goods made in China and cars imported from Europe and Asia. Even Canada, America’s largest trade partner, has become a target of Trump’s tariff threats.
As a result, other nations have imposed retaliatory tariffs targeting U.S. goods that are sold abroad, including agricultural and food products, motorcycles and automobiles.
While this kind of reaction is to be expected, it’s also creating real dangers for the U.S. economy in the long term.
While there is some evidence that Trump’s trade strategy is leading companies to move or start up manufacturing in the United States — if only as a hedge against future limits on the ability of foreign companies to import goods into the world’s largest consumer market — we urge the president to tread lightly, because what we don’t want to do is start a trade war that results in a shrinking global economy.
Legislation introduced by Sen. Bob Corker of Tennessee would require Congress to authorize before imposition of tariffs based on national security concerns. Trump used national security as the grounds for imposing these recent tariffs, but he did so via executive order — without congressional approval.
The U.S. Chamber of Commerce cautioned in a letter to the president and signed by more than five dozen organizations that the steel and aluminum tariffs — and any retaliatory tariffs imposed by other countries — “will have serious negative economic impacts on the United States.”
We understand that Trump’s ultimate goal is to reduce trade imbalances and protect the jobs of workers in the United States, but it’s also reasonable to ask at what cost.
American consumers could soon pay more for a whole range of goods, negating the benefits of tax cuts that are at least partly responsible for revving up economic activity this year and boosting prospects for U.S. businesses.
Higher prices on steel and aluminum are already making infrastructure projects more costly, according to a spokesman for the Associated General Contractors of America.
Trucking is an industry whose livelihood rests on economic activity and robust infrastructure, so it should support a careful approach to dealing with questions of trade.
Here’s hoping the Trump administration will turn away from tariffs and toward working constructively with our trading partners to make global trade fairer for all concerned.