Trump's trade war could make jeans more expensive, and 3 others things to know about his economic policy
While campaigning for president back in 2016, Donald Trump often promised that one of the ways he planned on making America “great again” would be by negotiating better trade deals with other countries. He rallied against China and Mexico the most often, but last weekend, Trump declared a trade war that would actually affect our relationship with Europe more than anything else. Putting America first in this aggressive way definitely annoyed European Commission president Jean-Claude Juncker, who threatened to shoot right back with higher tariffs on specific brands — like Levi jeans, Kentucky bourbon, Florida orange juice, and even Harley-Davidson motorcycles. And they’re ready to roll them out right away, according to Politico.
Bruno Le Maire, France’s finance minister, told Al Jazeera that “all options are on the table.” He added, “The United States needs to know that if it goes ahead with these measures, they will meet with a strong, coordinated and united response from the European Union. These unilateral measures are not acceptable.”
Trump doesn’t really seem to care that companies might end up charging American consumers more down the line — nothing will happen right away — or that you can’t just start a trade war because you’re bored at Mar-a-Lago over the weekend watching Fox News, which is exactly what happened according to the Washington Post.
European and other world leaders were taken by surprise when Trump tweeted that he wanted to start imposing a 25 percent tariff on steel imports and 10 percent on aluminum imports. Not only are the proposed tariffs extra harsh, declaring a “trade war” on Twitter isn’t how economic policy is usually made.
He ruffled a lot of feathers, especially European car makers, like Germany’s BMW, who would have to pay a lot more for the materials for their cars. To hit back, world leaders are ready to fight and impose retaliatory tariffs. That means American made products would become way more expensive overseas, and eventually hurt American businesses, since EU shops like Zara and other kinds of products would have the price advantage.
Here are some other things to know about Trump’s trade war rants.
1This is a lot about him not liking Germany’s Angela Merkel.
We all know by now how much Trump allows his emotions and feelings to guide his actions instead of thinking things through using, ya know, logic and reason. The aluminum and steel tariffs would greatly affect European car manufacturers the most, even though a lot of them, such as Germany’s BMW in South Carolina and Volkswagon in Tennessee, operate here and are then exported to Asia and Europe.
Trump feels like imposing tariffs overseas would incentivize companies to expand their operations over here, but it would also make imported cars more expensive. So no one really wins. Germany’s $23 billion of exported cars into the U.S. in 2016 has been bugging Trump for a long time, speaking about the trade imbalance as far back as the campaign, when he ranted about BMW operating in Mexico instead of the U.S. Because of those comments, economic officials in both Germany and the U.S. have been trying to work something out that benefits everyone but, according to the Washington Post, Trump’s “frosty” relationship with Merkel has slowed things down.
2Trump’s trade rants don’t address China, as he promised.
In his flurry of trade war tweets over the weekend, Trump mainly focused on steel and aluminum tariffs, which would affect a large part of the world. Just not the parts he swears are destroying America. At a White House meeting, Trump said that our trade relationships are “disgraceful,” as reported by CNBC. He added, “When our country can’t make aluminum and steel. You almost don’t have much of a country.”
Putting aside the fact that aluminum and steel aren’t the defining characteristics of America, China’s steel industry was the target of President Obama’s economic policies. In 2016, for example, the Obama administration imposed tariffs on some Chinese steel imports by more than 500 percent, according to CNN Money, which led Chinese imports to the U.S. to go down by two thirds. Basically, China won’t care about the trade war Trump’s starting, despite all of his boasting about taking China, the world’s largest steel exporter already, down.
3Trump thinks of everything as all or nothing.
Trump is a simple man (LOL), so when he sees that we exported less to the EU last year than they imported to us, it feels like we’re losing. Trade insists that a trade war is easy to win, but his suggestion of sweeping tariffs could “crimp economic growth, undermining the stimulative effects of Mr. Trump’s deregulation push and his signature $1.5 trillion tax cut,” according to the New York Times. At the end of a trade war, American exporters and manufacturers who depend on complex, global supply chains will likely be the victims.
Nebraska Sen. Ben Sasse, a Republican, told the AP that he’s hoping Congress will help Trump change his mind. “If the president goes through with this, it will kill American jobs — that’s what every trade war ultimately does. So much losing.” Basically, it sounds like Trump is getting a little antsy after all of the controversies surrounding his staff and the FBI’s investigation into Russian collusion during the campaign. Instead of looking like he’s anxious and incapable of leadership, Trump decided to bully the rest of the world into a trade war that American businesses and consumers will lose. Make sure to thank him and any Congress member who enables a trade war to happen with a ballot.