In quoting from Senator Grassley’s article above, we highlighted the phrase
“the president imposed tariffs as leverage in world trade talks.”
It seems to us that that one phrase encapsulates a series of core questions about U.S. and global trade policy in the 21st Century. Before we take these thoughts any further, there is a distinction we would like to make. One could argue that the various tariffs imposed during the administration of President Donald Trump are all part of the same cloth. But consider these three broad categories:
I) The Section 232 tariffs on steel and aluminum, for which the justification was and is Section 232 of The Trade Expansion Act of 1962. The same legal authority has been cited in connection with the Administration’s suggestion that tariffs might be placed on imported cars.
II) The tariffs imposed on products of China under Section 301 of the Trade Act of 1974, and
III) The “safeguard” tariffs on washing machines and solar energy cells and panels under Section 201 of the Trade Act of 1974.
In this very short note on the Trump tariffs, our inclination is to consider only the first two – the 232 and 301 tariffs. Whatever the merits of the President’s decisions in the cases on washing machines and solar panels, they were petitioner driven and followed from recommendations for action from the International Trade Commission. Let’s save those for another time.
As for the Section 232 and 301 tariffs, the questions they raise are numerous and critical. For example:
Were these tariffs essentially lawless actions, at least in international terms?
Did they needlessly undermine the global trading system, while creating costly uncertainties for companies around the world? Or
Were they a response to a system that was already broken?
Were they essential to addressing major challenges, especially those posed by the often-problematic nature of the Chinese economy and Chinese policies?
Could the problems the Trump Administration was seeking to address have been dealt with effectively by less disruptive means?
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To say the least, these questions have been met with a loud and ever louder chorus of responses over the last couple of years. Not a chorus in unison, of course. More John Cage than George Handel. Whether it will resolve to harmony or even softer discord remains to be seen. But the questions are critical, and we shall return to them soon, both here and in other settings.