Trump’s Tariffs: The Henny Pennys Are Screeching “Trade War!” and “Protectionism!” While Trump Plays Politics

by Scott Creighton

• free trade – international trade left to its natural course without tariffs, quotas, or other restrictions
• protectionism – the theory or practice of shielding a country’s domestic industries from foreign competition by taxing imports.
• overreaction – a more emotional or forcible response than is justified.

Last week President Trump announced he and his administration were planning to impose minimal import tariffs on steel and aluminum (25% steel and 10% aluminum) in an effort to protect the interests of U.S. industries and workers.

Today at the White House, Trump plans to make the announcement of the finalized tariff specific details, oddly enough, in the Roosevelt room at 3:30pm. During FDR’s administration, his economic staff struggled to find ways to get around the Smoot-Hawley tariff of 1930, signed into law by H. Hoover which placed very high tariffs on over 20,000 goods imported into the U.S. Smoot-Hawley was a protectionist measure, begrudgingly enacted as a response to the Great Depression (1929-1932) .  FDR and the Democrats passed the Reciprocal Trade Agreements Act of 1934 which gave him the ability to negotiate bi-lateral trade deals independent of the Smoot-Hawley tariff but that was two years after the Depression had ended and many say Smoot-Hawley had done it job.

While Free-Marketeer neoliberal economists will say Smoot-Hawley exacerbated the Great Depression making it last longer, others will tell you the protectionist policies helped promote U.S. business and put Americans back to work. Today, when a neoliberal argues for some new corporatist free-market multilateral trade deal, they always hit their opponents with a copy of Smoot-Hawley and laugh as if they’ve proved their point. After all, FDR himself helped do away with it… right?

Truth be told, Trump’s tiny little tariff, written by his tiny little hands, is nothing more than a drop in the bucket compared to Smoot-Hawley or the Tariff of 1828. And yet, folks across the political spectrum are beside themselves screeching about “trade wars” and the dreaded “P” word… (whispers) protectionism.

You think you’ll get banned by Youtube for talking about David Hogg or “crisis actors”? Try making a bunch of videos with the term “Protectionism” in the title. Not only will they ban you, but they’ll come to your house and brand the letter “P” for “Protectionist” on your forehead. In terms of getting a job in the future, that’s worse than a neck tattoo of the Dancing Israelis on a van with the burning towers in the background (unless you are applying for a job in Tel Aviv maybe)

In reality a number of countries have enjoyed a long run at the controlled demolition of our aluminum and steel manufacturing industries. That’s a fact. And what’s interesting is watching traditionally neoliberal and “free market” Fox News actually DEFEND these protectionist tariffs because they are coming from their boy Donald (same Donald who was just recently talking on live TV about grabbing guns first and worrying about the 2nd amendment and “due process” later… yeah, THAT Donald Trump)

“A great wailing and gnashing of teeth arose across the land last week after the Trump administration announced its plan to place tariffs on imported steel and aluminum. Some conservatives cried that the tariffs – 25 percent on steel and 10 percent on aluminum – would incite an international trade war…

This hyperbole comes from conservatives who deliberately blind themselves to the devastation Chinese trade cheating has caused the American steel and aluminum industries.

This hysteria comes from corporations that use steel and aluminum and are apparently just fine with Chinese trade violations completely killing off American producers, leaving our country without domestic suppliers of metals essential for national defense.” Fox News

Ah yeah… they had to work the defense industry into the mix didn’t they? Well, it is Fox “News”

Truth is, this reporter accurately lays out the recent history of damage done to our steel and aluminum industries since 2000 and then goes on to explain how this tariff plan was actually announced back in April of 2017 when the Trump administration began their study into the effects of the grossly under-priced materials being allowed to flow freely into the U.S. thanks to our open markets policy of economic globalization.

Damn, it also sounds for a second there like someone at Fox “News” actually gives a shit about some blue-collar workers in the country.

The head of the AFL-CIO backs these new tariffs. Imagine that. Him and the union standing with Trump.

Who doesn’t back it? Pretty much everyone else including Trump’s #1 Goldman Sachs swamp critter, Gary Cohn, who resigned in protest yesterday over this deal. Big Business and Big Finance isn’t happy.

Lloyd Blankfein says Cohn is right to leave. Of course, Blankfein is Goldman’s CEO and Cohn was it’s President… so I guess that tells you something right there.

The naysayers in the press warn of a pending “trade war” with China and a few others resulting from this. Manufacturers in the beverage industry complain the rising costs and warn they will be passed on to the consumer, which is supposed to make us sit back and say “screw those out of work aluminum workers. I ain’t paying an extra .02 for my 6-pack of Coors DAMNIT!”

Of course, they fail to mention they could EASILY just buy AMERICAN aluminum and not pay the 10% tariff… but… I guess I’m nit-picking.

But they wont buy American materials and that’s the point because they are worshiping at the alter of unrestricted global free trade and they know if something like this is imposed and it actually HELPS American industry… something else might follow it. And then, something else. And then, something else. And you see where this is going, right?

It’s like the “democracy disease” Kissinger was so concerned about in Latin America back in the early 70s when Salvador Allende won an election in Chile. One little scratch and the whole hemisphere could become infected.

Trump is already watering down his tariff with plans to exclude Mexico and Canada and possibly even the whole of the EU (after EU announced plans to target GOP heartland with tariffs of their own) by time he makes his announcement later today. That means it’s possible some Mexican company (or some Ukrainian one) will suddenly find themselves hiring a whole bunch more steel workers at .30 an hour to compete with our friends and neighbors up here stuck in the rancid middle of NAFTA.

Lindsey Graham, never one to miss out on a chance to attack Donald Trump for anything, says it’s a mistake to set these tariffs on imports. I’ll bet you anything he voted for Hillary… twice.

If it helps bring back a fraction of the jobs lost in those industries since 2000, it would be worth it I think but more likely, what Trump is doing is merely for show.

You see, Donald Trump is already worrying about 2020 and right now, in the heart of that Blue Wall that Killary LOST in 2016, there is a special election taking place… and it’s also right in the heart of the manufacturing belt hardest hit by steel manufacturing losses over the past 2 decades. With the mid-term elections coming up this year, it’s impossible to ignore the crass political aspect of all of this. Of course the establishment Republicans are too busy shooting themselves in the feet to understand the larger political side to it I suppose. They’re too busy trying to constantly prove to their donors that they back neoliberal economic ideology to care about something as trivial as unemployed American workers or even… voters.

Tellingly, the greatest Henny Penny-type response is coming directly from the core institutions of neoliberal globalization:

“Several trade chiefs from around the world decried Trump’s proposals, with the International Monetary Fund (IMF) and World Trade Organization (WTO) also quick to criticize the move.

The IMF’s Christine Lagarde said she hoped Trump would decide not to implement the tariffs and warned “nobody wins” from a trade war.

European Commission President Jean-Claude Juncker vowed to react firmly to Trump’s threat to impose tariffs on metal imports and the European Union (EU) has reportedly drawn up a $3.5 billion hit list of retaliatory tariffs.” CNBC

But wait… I thought globalization and the IMF/World Bank/EU were all COMMIES?!? I’m so confused.

No, they aren’t commies and yes, they are deeply opposed to any form of tariff being imposed by the U.S… even if those tariffs mainly target… well, commies in China.

It gets confusing doesn’t it?

Trump won the nomination and eventually the election on the promise of a more protectionist economic policy in America. He bashed Hillary’s unabashed support of the TPP and NAFTA and promised to bring jobs back to America by re-negotiating or doing away with several unfair trade deals. His protectionist rhetoric literally won him the Blue Wall that Hillary’s campaign staff wrongly assumed was theirs no matter what and now we see, a year after he takes office, he’s making a token gesture to placate that GROWING segment of voters in America right in time for a special election in Pennsylvania and right before the mid-terms in November.

Even still, it’s something. If he’s pissing off the World Bank, the IMF and Lindsey Graham, it can’t be that bad, right?

Trade wars? meh. The last people who want a trade war are the global financiers who OWN the IMF,World Bank and Lindsey Graham so I wouldn’t worry too much about that. They’ll just build a couple U.S. taxpayer-financed mills in Mexico and hire a couple thousand Peruvians to run it at a massive profit. They’ll gripe about “protectionism” and wave copies of Smoot-Hawley in the air while doing it but they understand politics and they know a craven showman when they see one.

Don’t fall for it like Secular Talk did the other day. It’s like his Carrier deal… ain’t what it appears too be on the surface. If it was, you think Fox “News” would be promoting it? Highly unlikely.

Like Bush and Obama before him, Trump is all hat and no horse but if this little platitude of his brings back just ONE DAMN JOB lost to open borders, free market globalization… then it’s worth it. Let him have his campaign speech talking point. Let him feature his one steel-worker put back to work at his next State of the Union address. I don’t care.

But this is not (whispers) protectionism and it’s not about to kick off a trade war with anyone. It’s showmanship. But that’s still the best we can expect these days now isn’t it?