No world leader has tried harder to get on President Trump’s good side than Japanese Prime Minister Shinzo Abe. Whether racing to New York the day after the 2016 election and presenting Trump with a $3,755 gold-plated golf driver, or taking him out on the golf course and serving hamburgers for lunch, Abe has cultivated a close personal relationship with his American counterpart.
.. But now, Japan, which is not just led by a friendly politician but also is a key security ally of the United States, looks likely to be slapped with tariffs on its steel exports to the United States. And to add insult to injury, the reason, Trump says, is rooted in national security.
“The U.S. is suddenly treating Japan as a target,” said Tsuyoshi Kawase, a professor of international trade policy at Sophia University in Tokyo. “The Japanese side is bewildered and confused.”
.. countries that figured, no matter the bumps in relations with Washington, they would wind up on the same side against China in any dispute over steel or unfair trade practices. And yet suddenly there is talk of a trade war between the United States and its supposed friends... Even those leaders who have grown accustomed to the zigs and zags of the Trump White House say this could be different. The consequences of Trump’s targeting other priorities — the Paris climate agreement and the Iran nuclear deal chief among them — have not had an immediate, concrete effect. But the tariffs could soon put citizens in ally nations out of work, and if a trade war escalates, all sides could feel the pain, officials from Brasília to Brussels to Seoul say.“The impulsiveness of the decision caught us by surprise,” said Diego Bonomo, the head of foreign trade at the National Trade Association of Brazil. His country is the second-largest exporter of steel to the United States.“It’s an economic shot in the foot,” he said. “When they impose tariffs to hurt Brazilian steel, they hurt their own coal exports and exports of products that use steel.”
.. Trump’s order came hours after Japan and 10 other countries formalized a new Pacific free-trade agreement
.. The announcement also upended a Saturday meeting of the top U.S., E.U. and Japanese trade negotiators, who were originally scheduled to convene to talk about how to take on what they say is China’s unfair support for its steel industry. Instead, officials say, the meeting may turn out to be the first salvo in an unfolding and escalating trade skirmish.
.. The frustration is compounded by Trump’s national security rationale. In fact, say U.S. allies, there is no national security risk to importing steel and aluminum from one’s closest military partners. And any move that damages their own industries also hits at overall NATO readiness and hurts trust among allies, they say.
.. But that response could backfire, some analysts say. If the WTO rules against the White House, and Trump chooses to ignore the ruling, that could effectively spell the end of the organization.
.. “To be honest, everyone kind of agrees with us,” said the official, who spoke on the condition of anonymity to discuss closed-door European efforts. “I haven’t found anyone who says, ‘No no, the president is right.’ ”
.. The prospect of steel tariffs follows on the heels of similar levies on solar panels and washing machines. But it comes at a sensitive time on the front of North Korean diplomacy.
.. tariffs could have a “negative impact on South Korea-U.S. relations,”
.. Many in Japan worry that Trump’s effort may ultimately undermine global security, not bolster it.
“When trade friction grows between allies, the alliance is weakened,” Watanabe said. “But it’s unclear if Trump understands that.”
Trump rolls out tariff policies like a reality show — complete with cliffhangers
The president thrives on conflict and runs his White House as if he were the producer of a television show, placing characters in situations pumped up with tension and setting up tantalizing cliffhangers to keep viewers tuning in.
.. Although the idea of imposing tariffs on some imports was cheered at Trump’s campaign rallies, Republican lawmakers and members of his administration have argued that instituting penalties on steel and aluminum could prompt other countries to impose retaliatory tariffs that hurt American farmers, producers and manufacturers, including in states that were key to the president’s unexpected win in 2016.
.. “We have a very big meeting at 3:30,” Trump said. “I’d call it an economic meeting, something we have to do to protect our steel, our aluminum in our country.”
.. Trump wouldn’t say exactly what he had planned, but promised that it would be “very fair” and also “very flexible.” As reporters shouted out questions, the president confirmed that he would implement the tariff numbers
.. “I’ll have a right to go up or down, depending on the country, and I’ll have a right to drop out countries or add countries,” Trump said. “We just want fairness. Because we have not been treated fairly by other countries.”
.. Trump briefly mentioned the specifics of the new tariffs, but he mostly spoke longingly about the golden days of U.S. manufacturing and criticized countries like China and Japan for their “aggressive” practices.
“Our factories were left to rot, and to rust all over the place,” Trump said at one point. “Thriving communities turned into ghost towns. . . . The workers who poured their souls into building this great nation were betrayed, but that betrayal is now over.”
.. Trump asked some of the workers to speak. A worker from Kentucky said the tariffs would allow his plant to run at 100 percent capacity instead of 40 percent. Sauritch, the union leader from the Pittsburgh area, spoke emotionally about his father, Herman, losing his job in the 1980s because of an increase in imports.
“Well, your father Herman is looking down” from heaven, Trump said. “He’s very proud of you right now.”
Trump delights in executive swagger. His tariffs show it.
Never mind that the Cato Institute’s Colin Grabow notes
- defense-related products require only 3 percent and 10 percent of domestic steel and aluminum production, respectively. Or that
- six of the top 10 nations that export steel to the United States have mutual defense agreements with the United States. Or that
- China, an actual military competitor and potential adversary, is not among the top 10. Or that
- Canada, a NATO ally, supplies more U.S. aluminum imports than the next 11 countries combined. Or that, as The Post reports,
- “For nearly a quarter-century under U.S. law, Canada has been considered part of the U.S. defense industrial base, as if its factories were American.” Or that
- the aluminum for military aircraft and the steel for military vehicles will be more expensive, so, effectively, the administration is cutting the defense budget1
.. Electrolux, Europe’s largest manufacturer of household appliances, responded to the U.S. tariffs by suspending plans to invest $250 million in a Tennessee factory.
.. Protectionism is a scythe that slices through core conservative principles, including opposition to government industrial policy, and to government picking winners and losers, and to crony capitalism elevated to an ethic (“A few Americans first”).
.. Big, bossy government does not get bigger or bossier than when it embraces protectionism — government dictating what goods Americans can choose, and in what quantities, and at what prices.
Trump Alienates Allies Needed for a Trade Fight With China
China’s predatory trade behavior is threatening sectors much more vital than steel and aluminum
“Beijing has doubled down on its state capitalist model even as it has gotten richer,” Kurt Campbell and Ely Ratner, who both served in foreign-policy roles under former President Barack Obama, write in the current issue of Foreign Affairs. “Cooperative and voluntary mechanisms to pry open China’s economy have by and large failed.”
.. But Mr. Trump has consistently rejected collective action in favor of going it alone. His officials downgraded multilateral efforts to reduce steel overcapacity. In January 2017, Mr. Obama’s administration launched a case at the WTO against China for subsidizing aluminum, but Mr. Trump has failed to follow up.
.. since 2003 China has four times promised to address overcapacity in steel production, as its actual capacity quadrupled to roughly half the world total.
.. Yet China exports little steel to the U.S. because of existing duties and accounts for just 11% of its aluminum imports, far behind Canada. The Commerce Department argued for a global remedy because Chinese production depresses global prices and drives foreign producers out of third markets, and they then ship to the U.S.
This means the pain of Mr. Trump’s tariffs will fall not on China but on actors that play by the rules, including Canada, Japan and the European Union. When the EU threatened to retaliate, Mr. Trump said he would escalate by raising duties on European cars.
Chinese misbehavior has thus brought the U.S. to the brink of trade war with its own economic and strategic allies, echoing how Russian meddling has served to fuel internal strife in Europe and the U.S.
.. Chinese forced technology transfer, commercial espionage and intellectual-property theft, all aimed at creating Chinese champions in key industries by 2025.
These pose a far greater threat to U.S. technological leadership and the enormous value it adds to U.S. exports than do growing imports of steel and aluminum which, while vital to some communities, are commodities.
.. The U.S. is preparing a sweeping penalty against China, but it would be more effective if done jointly; otherwise, Beijing may simply persuade others to hand over their technology in exchange for Chinese sales or capital.
.. Most of all, though, it requires Mr. Trump to understand where leverage comes from.
“Chinese misbehavior with respect to intellectual property and economic espionage is a real problem that requires a response,” Patrick Toomey, a Republican senator from Pennsylvania, said in an interview. “We are much more likely to get our allies to work with us if we aren’t punishing them for selling us steel that our consumers want to buy.”