At the National Interest Salvatore Babones writes:
The real problem is that other countries—including allies like Canada and the European Union—have responded to years of Chinese dumping by subsidizing their own industries and imposing broad tariffs on Chinese steel. American antidumping measures have traditionally been more narrowly focused. In a sense, Trump is only catching up with what the rest of the world is doing already.
The simple fact is that the world produces much more steel and aluminum than it needs. A global shakeout is inevitable, and every country wants to make sure that its own industries are the ones that survive. The only question is: who will blink first? If one country has done a lot of blinking over the last twenty years, it’s the United States, as the Commerce Department report amply documents. Embracing a free-market approach, being reluctant to provide subsidies, applying very selective tariffs and never even thinking about nationalizing its strategic industries, the United States has consistently ceded market share to its statist rivals overseas. The Trump tariffs bluntly but effectively draw a line under twenty years of creeping retreat.
We will continue to have a steel industry in the United States. Our national defense posture requires it unless you think that we’re going to import steel from enemies in a prospective war. Maintaining a steel industry in the face of global overcapacity will either require titanic subsidies at a level we’ve never seen before or some level in another form of protectionism. You can’t just turn the furnaces off and then turn them on when you suddenly find yourself in need of more steel.
But let me highlight another aspect of this. The members of the so-called “creative class” can’t oppose the continuation of every job that more ordinary people can do on a variety of grounds and pretexts, whether economic, environmental, or other without being prepared to support those people out of their own pockets, something that so far they’ve shown no willingness to do. That’s not merely hypocritical, it’s predatory. These contemporary Eloi won’t be allowed to put their Morlocks underground or otherwise put them out of sight. That’s science fiction.
The reaction to Trump’s announcement is pretty revealing in how embedded supposed “free trade” is among the elite. Even those on the economic left are criticizing this and not just because they hate Trump.
And yet what were the sticking points in the breakdown of the Doha round of trade talks? U. S. insistence on more vigorous intellectual property protections and the reluctance of a Brazil-led group of developing to reduce their own subsidies. Relatively few Americans receive royalties and most of those who do are “elites”.
Trump’s trade advisor (Navarro) this morning said this was not about China. This is pure protectionism for the steel and aluminum industries.
Steve