Trump Hits Out At Allies

The sense of outrage among America’s closest Western allies over the imposition of steel tariffs is remarkable. The published language is the most critical of America for many decades and comes from all sides. The private language in the circles of power in unprintable. The EU, Canada and Mexico feel betrayed and bullied by a friend. Coming on top of NAFTA, Climate Change, Iran and Jerusalem there is a widespread sense that this friendship is no longer so special, nor can it be relied upon.

The Trump administration does not care. It has a different way of doing things and the evidence is piling up that it works. Threaten, talk, compromise, then profit. It worked in the opening phase with China, appears to be back on track with North Korea, but so far is not working in the West. Moreover this time there is an economic dimension which is a touch more complex than a property deal.

The reason that American steel jobs went away was because the country did not invest in new plant and technology and its steel product became noncompetitive and too expensive at home. China took advantage of the opportunity and Europe, including the UK, found new US customers all across both domestic and defense industries, for quality steel no longer produced in America. So tariffs, originally designed to stop Chinese dumping, will actually increase the cost of American manufacturing of everything from cars to planes. So for a long time ahead the cost will be borne by the US consumer and the US taxpayer.

Meanwhile the affected friends are imposing tariffs on a range of American manufactures and food products which will hit American heartlands which produce them. So unless Europe, Mexico and Canada cave in, this policy could go badly wrong. So expect Trump to come up with something.

He usually does. Then the questions are, will it dowse this flash in the pan? Or will it be a jump from the frying pan into the fire?