Our trade partners are planning to respond to President Donald Trump’s imposition of new taxes on steel and aluminum imported from those countries by hitting back with tariffs of their own — attempting to inflict economic harm on American companies and mobilize political pressure on Trump to relent.
This is a fine idea. (It’s conventional for a reason.) But it does tend to founder on a few problems. One is that it’s simply not clear whether Trump cares about the welfare of American citizens or even thinks about the potential political ramifications in a normal way.
Another is that, with overall economic conditions generally pretty good in the United States right now, you’d need to inflict a lot of retaliatory pain for it to be noticeable to normal Americans. Last but by no means least, the true perversity of trade war is that it’s genuinely lose-lose.
Trump putting tariffs on foreign metal is bad for foreign metal-makers, but it’s also bad for Americans who buy things made out of metal — which is basically all of us. Conversely, our allies can hit back with taxes on imported bourbon and orange juice to try to annoy Mitch McConnell and hurt Trump in a key swing state, but then foreigners will have to go without access to delicious bourbon and orange juice.
But there is a better way.
When China wanted to get Trump to let the Chinese tech conglomerate ZTE off the hook for repeatedly violating sanctions against North Korea, it didn’t try to make concessions to the American people. It had a Chinese state-owned enterprise approve a huge loan to an Indonesian real estate project that will feature Trump-branded hotels, condos, and a golf course.
America’s democratic allies probably can’t (and certainly shouldn’t) bribe Trump and his family in this way, but they both can and should do the opposite: work together on a package of targeted sanctions narrowly designed to inflict pain specifically on the Trump Organization.
Trump is provoking a crisis in America’s alliance system
Trade spats are nothing new, but to impose these tariffs unilaterally, the Trump administration is invoking a 1962 legal provision that lets the president protect industries that are deemed vital to national security. The idea is that since the United States might need steel and aluminum as materials of war, we can’t afford to become economically dependent on countries that might deprive of us access to imported metal during wartime.
This might make sense under some circumstances, but the countries Trump is taxing are not only friendly — they are literally bound to the United States by mutual defense treaties.
The idea that they represent a potential threat to America is either laughable or alarming, suggesting that Trump harbors aspirations of completely severing America’s traditional diplomatic relationships.
Canadian Minister of Foreign Affairs Chrystia Freeland on new Trump tariffs: “So what you are saying to us, and to all of your NATO allies, is that we somehow represent a national security threat to the United States … Seriously?” #CNNSOTU https://t.co/BVonQbOce4— CNN Politics (@CNNPolitics) June 3, 2018
In light of the unusual combination of geopolitical absurdity and delicacy that the situation poses, at a press conference last week, Canadian Prime Minister Justin Trudeau reached into the bag of rhetorical clichés we normally see American officials deploy against authoritarian regimes abroad:
I want to be clear on one point: Americans remain our partners, our allies, and our friends. The American people [are] not the target of today’s announcement. We hope that eventually common sense will triumph. Unfortunately, the actions taken today by the American government do not seem to be headed in that direction. This is not the American people. We have to believe that, at some point, common sense will prevail. But we see no sign of that in this action today by the US administration.
While it’s a good speech, the reality is that Trudeau’s policy countermeasures are aimed at the American people, and so is what we know of Europe’s response. The EU’s idea is that if they punish Paul Ryan’s constituents by levying new taxes on Wisconsin’s Harley-Davidson motorcycles, it will induce Ryan to bring pressure to bear on Trump.
A better path would be to take Trudeau’s analysis seriously — America’s allies should come together and retaliate against Trump rather than retaliating against the American people.
Sanctioning the Trump Organization
The Canadian writer Scott Gilmore is also thinking along these lines, and makes the case for sanctioning the Trump Organization in Maclean’s.
“Canada could add a tax to Trump properties equal to any tariff unilaterally imposed by Washington,” he writes. “The European Union could revoke any travel visas for senior staff in the Trump organization. And the United Kingdom could temporarily close his golf course.”
The potential points of leverage here are quite real. Trump has two golf courses in Scotland and one in Ireland. The wine list at BLT Prime in Trump’s DC hotel is full of European vintages. Travel sanctions could also be painful. Donald Trump Jr. was vacationing in Spain as recently as April.
Hitting Trump personally might work on its own terms. The Senate Foreign Relations Committee is chaired by Sen. Bob Corker (R-TN), who has committed to working to halt Trump’s tariffs. So has Sen. Jeff Flake (R-AZ), who also sits on the committee. Both Corker and Flake have also, from time to time, offered commentary on Trump’s basic unfitness for office. What they’ve never done is exerted their power as US senators to engage in meaningful oversight over his corruption and conflicts of interest. Directly injecting Trump’s business interests into an international conflict might spur them to actually do their jobs.