Rob Porter, Staff Secretary to the President until forced to resign. Porter kept protectionists at bay.
President Trump in an impromptu press meeting at lunchtime yesterday announced that he was imposing 25% tariffs on all imports of steel and 10% tariffs on aluminum. The US stock market promptly fell over 2%. In conjunction with two days of previous market drops this erased all the stock market gains of 2018. This Friday morning as we went to press, US stocks had opened sharply lower; European markets were down 1 to 2%, depending on the index; and the Nikkei 225 (Japanese) was down 2.5%.
Ignoring these warning signs, the President this morning tweeted that “When a country (USA) is losing many billions of dollars on trade with virtually every country it does business with, trade wars are good, and easy to win.”
Former Republican House Majority leader Newt Gingrich, now a Fox News contributor, in an ill-timed recent column writes that
“America’s rising prosperity will further broaden and deepen the Republican Party. Trump economics will be defined as the economics of more jobs, higher wages, lower taxes, more take-home pay and the vision of a prosperous America as the new normal.”
The damage to US metals consumers and the trade wars that Trump’s tariff announcement will trigger bode fewer jobs, stagnant or lower wages, higher taxes (tariffs are just that), and a declining protectionist America as the new normal — unless the President severely limits the metals products and countries affected before the end of next week.
We include some supporting quotes — from today’s Wall Street Journal unless otherwise noted:
Cancelled investment in the US: “Swedish appliance maker Electrolux AB said it would hold back on a planned $250 million investment it had planned to make to modernize and expand its manufacturing operation in Springfield, Tenn., following Mr. Trump’s announcement.”
Damage to allies, not China: “[I]t isn’t China who will really pay the bill for higher US steel tariffs: it will be American allies like Canada and [South] Korea.” “Mr. Trump’s Defense Department…weighed in against the [tariff] move, with a memo cautioning against harm to ‘our key allies’ like Canada and Japan.'”
Damage to US manufacturers dependent on steel and aluminum inputs: “Trump’s plan…drew sharp criticism…from industries that fear it could raise their costs to make everything from airplanes to beer cans.” “Deere and Caterpillar sold off sharply on Thursday, both down over 2.5%.” “A cascade of industry trade groups moved quickly to denounce the [tariff] moves, including beer and boat makers worried about costlier aluminum, and manufacturers of chemicals, air conditioners, and oil pipelines all concerned about pricier steel inputs.”
Growth of the swamp: “The lead-up to next week’s actual tariff proclamation will doubtless be a frenzy of…industry lobby groups clamoring to be exempt from the new rules, which are supposedly needed to protect national security.”
Likelihood of retaliation by important trade partners: ”We will not sit idly while our industry is hit with unfair measures that put thousands of European jobs at risk,’ said Jean-Claude Juncker, president of the European Commission…” “The EU’s direct retaliation plans are likely to include counterstrikes against iconic U.S. brands such as whiskey from Kentucky, orange juice from Florida and Harley-Davidson motorbikes…” (Politico) “Canadian Foreign Minister Chrystia Freeland said that ‘should restrictions be imposed on Canadian steel and aluminum products, Canada will take responsive measures to defend its trade interests and workers.'”
Inflation: “Mr. Trump’s decision to slap tariffs on steel and aluminum imports further stoked investors’ fears of rising inflation because the levies will likely push the price of goods higher.”
Growth: Brian Nick, chief investment strategist at Nuveen, is quoted saying “growth will be a bit lower this year because of the higher tariffs on goods that a lot of people buy.”
Damage to the President’s relations with Republicans in Congress: “[The tariff decision] is likely to open a rift between the White House and traditional free-trade Republicans…”
If the US is hit with foreign retaliations targeted at key Central US swing states, Democrats are likely to win the House in 2018, squash Republican-led investigations of FISA and other abuses, and impeach Trump.
Rob Porter out, Peter Navarro out
Protectionist trade adviser Peter Navarro
Trump likely would not have made his ill-considered tariff announcement had it not been for the exit of his key adviser Rob Porter, damaged by a wife-abuse scandal. Porter’s exit precipitated the resignation of Trump’s trusted Communications Director, Hope Hicks, who was especially close to Porter. Porter had performed yeoman’s service in keeping protectionist advisers from having undue influence on the President. With Porter gone, Trump promoted rabid protectionist Peter Navarro to a key presidential adviser position. Trump’s tariff announcements followed shortly thereafter.
Conservative and pro-Trump press missing-in-action
As we went to press this morning (Friday, March 2nd), with the exception of business dailies like the Wall Street Journal, the conservative and pro-Trump press were almost entirely tongue-tied and MIA with respect to coverage of Trump’s tariff announcement at midday yesterday. This includes American Greatness, The Federalist, the Washington Free Beacon, National Review, Powerline, Red State, Townhall, the Washington Examiner, American Thinker, The American Conservative, and Daily Caller. Drudge headlined the news last night but quickly moved on. Breitbart yesterday ran a survey that a majority of US interviewees are in favor of tariffs vs China. This is not surprising, but the Trump tariffs hit our trade allies, not China, so Breitbart’s publication of the survey is a red herring. Today Breitbart went into radio silence on the subject. The Washington Times covered Trump’s tariff announcement but not prominently. The Weekly Standard had an editorial denouncing the tariffs; the all-out-for-Trump Conservative Tree House praised them.
For coverage, other than the business dailies, one had to go to the mainstream and liberal press: Associated Press, Axios, Politico, The New York Times, and the Washington Post.
hat tip: Nicomachus
Click here to go to the previous Founders Broadsheet (“Norway, Trudeau, Italian elections, Netanyahu’s plight, trade decisions on hold”)
Leave a Reply