So, President Trump is announcing proposed tariffs on steel and aluminum to stimulate the domestic manufacturing sectors of those products, and, as expected, beltway swamp rats on both sides of the aisle, are apoplectic.
I am guessing they are responding on orders from lobbyists for special interests who use tons of steel and aluminum. Beer brewers, for example.
Who cares if the price of Coors Light goes up a nickel a 12-pack? It’s a level playing field. Their competitors, like Anheuser Busch, must pay the same increased price due to the tariffs…. OR start buying from US manufacturers of the same products, which is the goal, to stimulate the American steel and aluminum industries. But let’s not let President Trump’s America First policy get in the way of sweet lobbyist cash.
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The fact is Congress can do NOTHING about President Trump’s proposed tariff. Imposing tariffs is a presidential prerogative that Congress has no power or authority to interfere with. But that won’t prevent the usual suspects from the left and the Rino confederation from posturing in righteous indignation. How dare President Trump attempt to help American manufacturers!
There was a time, pre-1913, when the US government was run on revenue that was raised almost solely from tariffs. Then, in 1913, the federal income tax was invented, and the American people became Santa Claus to Washington, just one big piggy bank. Need more money? No problem, take it from the people. Thus, tariffs disappeared as a revenue source.
So, tariffs are not a new idea, just one a responsible leader would consider to relieve tax pressure on the people. What the hell is the matter with that Trump guy, thinking about the people?
And now, to club President Trump from the other side of the pond, the EU is threatening to impose reciprocal tariffs on American imports.
Let them, I say. The GDP of all the countries in the EU combined is less than the US GDP. The EU exported $435 billion in goods to the US (2017), roughly 2.5% of their GDP. Conversely, the US exported $284 billion in goods to the EU, 1.4% of its GDP. The pain will be much greater for the EU if it decides to enter a trade war with the United States.
In addition to losing a potential trade war, the American products the EU is targeting is bizarre? Levi jeans and Harley-Davidson motorcycles? Really? That’s insane, but then, these are the same leaders who opened their arms to millions of Muslim migrants, who have since invaded the continent anc continue to do so in large numbers, causing the crime wave to skyrocket and overloading the social welfare systems of Europe’s member nations. So, sound decisionmaking is not necessarily something the EU’s leaders are known for or good at.
Europeans don’t buy Levis and Harleys because they are extra durable or energy efficient. They buy them because they are iconically American, cool. And they aren’t going to stop buying them because they cost 25% more. I recall the fashion-crazy French paying hundreds of dollars for a pair of Levi jeans a few decades ago, not because of a tariff, but because demand far exceeded supply. The good citizens of Europe may very well take to the streets to protest their out-of-touch leaders.
So, I’m a big fan of tariffs if used with great planning and surgical precision when and where necessary. I wrote an article four years ago when Powdered Wig was just a few months old favoring the imposition of import tariffs on the Chinese to correct our dreadful trade deficit with them and invigorate American manufacturing.
And, what would be wrong with this? Trump tries his import tariffs for a few months, and if it isn’t working out the way planned, he rescinds the tariffs as easily as he imposed them.
From Bloomberg News via NTK
In the wake of President Donald Trump’s surprise announcement that the U.S. would soon administer a tariff on all imported steel and aluminum, the European Union is preparing retaliatory tariffs of their own on imported U.S. goods.
The EU’s levies aim to target the U.S. heartland, the very constituency Trump hoped to boost economically with his tariffs. Among other products, the EU is planning a 25 percent tariff on products like jeans, motorcycles, and bourbon:
Targeting 2.8 billion euros ($3.5 billion) of American goods, the EU aims to apply a 25 percent tit-for-tat levy on a range of consumer, agricultural and steel products imported from the U.S. if Trump follows through on his tariff threat, according to a list drawn up by the European Commission and obtained by Bloomberg News. The list of targeted U.S. goods — including motorcycles, jeans and bourbon whiskey — sends a political message to Washington about the potential domestic economic costs of making good on the president’s threat.
There appears to be a method to the EU’s madness. Harley Davidson motorcylces are manufactured in House Speaker Paul Ryan’s home state of Wisconsin. Bourbon whiskey is made throughout Senate Majority Leader Mitch McConnell’s Kentucky. And blue jean giant Levi Strauss is headquartered in House Minority Leader Nancy Pelosi’s hometown of San Francisco.
EU leaders are expected to continue tariff talks on Wednesday, when they will also discuss filing a formal complaint against the U.S. with the World Trade Organization.