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Letter: Imposing tariffs is just bad policy

By Max Boot

Commerce Secretary Wilbur Ross may have looked ridiculous hoisting a can of Campbell's soup on TV, but he has a valid if narrow point when he seeks to minimize the immediate economic consequences of President Donald Trump's proposed 25 percent tariff on steel imports and 10 percent tariff on aluminum. Given that 82 percent of the steel we use is produced domestically, the impact on consumers from higher prices on imported steel will be limited; the impact on aluminum, of which only 39 percent is made domestically, may be larger. But Campbell's soup won't double in price - not that a billionaire like Ross would care if it did.

It is still a stupid policy. When President George W. Bush imposed tariffs of up to 30 percent on some steel products in 2002, he may have saved as many as 10,000 steelmaking jobs while costing up to 200,000 jobs in steel-using industries such as automobile manufacturing. The consequences of the new tariffs might not be so disastrous if they were imposed in isolation while the United States continued to pursue a general free-trade policy, as it did under Bush. But that's not the case today.

Trump has loudly and repeatedly signaled his intention to abandon more than 70 years of America's commitment to free trade. One of his first acts was to pull the United States out of the Trans-Pacific Partnership, a proposed free-trade zone incorporating 12 countries with about 40 percent of the world's economic output. Trump's decision was an economic and geopolitical gift to China, which can now pursue its own Regional Comprehensive Economic Partnership, an alternative to the TPP that is designed to facilitate Chinese hegemony over East Asia. Already, China has signed free-trade agreements with 21 countries, compared with only 20 for the United States, and it is negotiating more than a dozen additional pacts.

Rather than concluding new deals, Trump is renegotiating old ones - specifically the U.S.-Korea Free Trade Agreement and the North American Free Trade Agreement. The conventional wisdom until now had been that, after a lot of huffing and puffing, the dealmaker in chief ultimately would make only minor adjustments and claim major victories. But his decision to impose steel tariffs was taken in the face of opposition from most of his advisers and without going through the normal policy-vetting process. What's to stop him from scrapping KORUS or NAFTA in the same impetuous fashion?

With Trump imposing tariffs on imported washing machines and solar panels along with steel and aluminum - and soon, perhaps, on foreign automobiles - other countries won't turn the other cheek. The European Union is threatening to retaliate by slapping $3.5 billion in tariffs on U.S. exports. Canada, America's No. 1 supplier of imported steel and aluminum, also vows to strike back if it is not granted an exemption.

Trump welcomes a trade war - he says that "trade wars are good, and easy to win" - but no serious economist would agree. Neither does Wall Street. The stock market was spooked by the tariff decision, and for good cause. The Smoot-Hawley Tariff Act of 1930 triggered a trade war that spread the Great Depression from the United States to the rest of the world. The resulting economic meltdown contributed to the rise of totalitarian regimes in Germany and Japan and led to the outbreak of World War II.

After 1945, U.S. policymakers pursued a free-trade policy. They midwifed the creation of the General Agreement on Tariffs and Trade in 1947 and the World Trade Organization in 1995. Free trade became one of the pillars of the Pax Americana, along with support for democracy, international law and collective security. This altruistic approach paid off: Presently, the United States has 4.4 percent of the world's population and 24.3 percent of its gross domestic product.

There will be a high price to pay for eroding the foundations of the world order that the United States built - and it will not be limited to the economic realm. If Trump scraps KORUS, he will find it difficult to win South Korean cooperation against North Korea. A trade war with the E.U. will make it harder to win the cooperation of the Europeans to deal with Russia and Iran. The only winners will be America's enemies.

It's easy to cry "MAGA!" and let slip the dogs of trade war; much harder to put them back into the kennel before a lot of people get mauled.

Max Boot, a columnist with the Washington Post, is the Jeane J. Kirkpatrick senior fellow for national security studies at the Council on Foreign Relations.

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