President Donald Trump’s new tariffs against Canada are “madness” and will hurt his supporters according to an editorial by a prominent right-leaning newspaper.
“The White House on Monday exhumed Section 338 of the 1930 Tariff Act to impose 50 [percent] tariffs on hundreds of Canadian goods, including hockey sticks, honey, beer, down feathers, fishing rods and golf clubs,” The Wall Street Journal Editorial Board wrote on Tuesday. “The tariffs are set to take effect in 30 days, which means he’s using tariffs as leverage to win concessions from Canada.”
They added, “He may also enjoy showing off his new tariff bazooka. Section 338 lets the President impose tariffs up to 50 [percent] on countries that discriminate against “commerce of the United States, directly or indirectly” in relation to foreign countries. No previous President has used this power, which hails from the disastrous Smoot-Hawley Act.”
The Editorial Board went on to describe how Trump’s policies have increased prices and disrupted industries when it comes to products like automobile parts, alcohol and cheese. In addition to hindering the transfer of goods across the US-Canada border, it has done likewise with the passage of people.
“Many hospitality businesses have also been harmed by a decline in Canadian tourism,” the Editorial Board wrote. “A study in March found that the tourist dropoff has cost between 14,000 and 42,000 jobs in the U.S. markets most exposed to Canadian tourism. Northern border areas have also suffered from a decline in cross-border trade.”
They added, “That may be why Mr. Trump is justifying his tariffs as retribution for Canada’s treatment of U.S. autos and dairy, which are key industries in the Midwest. But Canada is the second largest U.S. trade partner after Mexico, and Mr. Trump’s tariffs are complicating cross-border supply chains, raising costs and creating uncertainty for business.”
The Editorial Board concluded, “The more Mr. Trump keeps swinging recklessly, the more Americans are likely to think there’s only madness in his tariff methods.”
While Trump’s tariffs have not yet shaken his base of supporters, many conservative thought leaders like those at the Wall Street Journal have been quite outspoken against them. Writing for the same publication earlier this month, American Institute for Economic Research senior research fellow David Hebert pointed out that Trump’s tariffs have destabilized the American business community by making economic conditions uncertain.
“The main value of a trade agreement isn’t that it lowers tariffs but that it eliminates doubt,” Hebert wrote. “USMCA’s greatest achievement was never a slate of tariff rates, exceptions and rules. It was the confidence that the rules would stay stable long enough for companies to make plans and act on them. A parts supplier in Michigan could sign a 10-year lease and order supplies because the terms governing what crossed the border were set.”
Dr. Robert Shapiro, undersecretary of commerce for economic affairs in the administration of President Bill Clinton and principal economic adviser to Clinton’s 1992 campaign, told AlterNet at the time that Trump’s policies will create tremendous uncertainty.
“It’s about uncertainty,” Shapiro explained to AlterNet. “Every investment is based on an assessment of the likely future demand for whatever you’re investing in, and how much it’s going to cost to produce it. So there are assumptions about labor costs, material costs and other input costs — and again, about demand. If you have a set of arrangements that give you some confidence about the price of your inputs coming from Mexico or Canada, or about demand for goods in Canada — and don’t forget, we have virtually no trade deficit with Canada; we have enormous trade, and it goes in both directions — so it’s certainly right, and it’s not just about investments based on these probabilities that the trade agreement can help reduce uncertainty about.”
Shapiro continued, “It’s also about how much you’re going to produce today, apart from investment, because you’ve got thousands of companies selling goods or services into Canada. And so there’s uncertainty about whether this will lead to more conflict with Canada, which would hurt Canadian demand for US goods, or whether Canada will impose a new tariff in retaliation for ours that makes my goods less competitive there. Of course it’s bad — it’s bad for American workers, it’s bad for American investment.”