President Trump has been spoiling for a trade war since before his election. Now, he has taken the first meaningful step with his decision to impose tariffs on steel and aluminum imports. And, as with so many other policies he has supported, he appears to have little understanding of this one.
Invoking a rarely used law that allows the president to restrict trade on national security grounds, Mr. Trump said he would impose a 25 percent tariff on steel and a 10 percent tariff on aluminum. He made the announcement on Thursday at a hastily convened meeting with executives of those two industries. Many White House aides, including Mr. Trump’s chief economic adviser, Gary Cohn, appeared to be caught off guard by the decision; on Wednesday, Mr. Cohn had warned that he might resign if Mr. Trump went through with the tariff plan.
The administration offered few details about how long the tariffs would be in place and whether they would apply to all countries, including those with which the United States has a trade agreement, like Canada, Mexico and South Korea.
The stock market fell sharply after the announcement because investors feared that the move was the first of several that could result in escalating disputes in which the United States and its trading partners impose new tariffs. Mr. Trump seemed to confirm that fear on Friday morning when he tweeted that “trade wars are good, and easy to win” — an argument that contradicts virtually everything we have learned about how such scenarios play out.
The steel and aluminum tariffs are ostensibly aimed at punishing China, which has been driving down prices for those commodities by producing far more metal than the world can use. But Mr. Trump’s move will have a limited effect on China because much of the steel and aluminum the United States imports actually comes from allies like Canada, Brazil, South Korea and Mexico. Further, the move could hurt American businesses that use these metals, including auto and construction companies, which will now pay more for a critical raw material.
If Mr. Trump were truly interested in getting China to reduce its excess production, he would have worked with the European Union, Canada, Japan, South Korea and other countries to put pressure on Beijing. Those nations tend to be closely aligned with the United States and have also been hurt by China’s mercantilist economic policies.