Tag Archives: steel tariffs

Not Even the Pentagon Thinks Tariffs Are Needed for National Defense, by Ryan McMaken

Here is the other side of the steel tariff argument. From Ryan McMaken at mises.org:

When politicians run out of good arguments, their last refuge is often the claim that what they want is “necessary for national defense.”

Given that there are no economic arguments in favor of tariffs, it makes sense that the administration has resorted to the political“national defense” argument instead.

So, even if the Trump administration were forced to admit that, yes, tariffs are bad for the incomes and standards of living for most Americans, they could still argue that everyone must make sacrifices for the sake of national security.

But do these arguments hold any water?

In a Defense Department memo, in response to the President’s tariff proposal, the Secretary of Defense states that the tariffs are not necessary:

… the US military requirements for steel and aluminum each only represent about three percent of US production. Therefore, DoD does not believe that the finds in the reports impact the ability of DoD programs to acquire the steel or aluminum necessary to meet national defense requirements

“The reports” mentioned here are Commerce Department reports pushing for the tariffs.

The Defense Department memo goes on to advocate for a far more limited tariff than what the Trump administration wants, stating “DoD continues to be concerned about the negative impact on our key allies regarding the recommended options within the reports … targeted tariffs are more preferable than a global quota or global tariff.”

The memo then concludes by noting that if the administration must have steel tariffs, it should at least wait on imposing aluminum tariffs.

Given that it is in the best interests of the Pentagon to overstate the security threats to the United States, the Department’s opposition to the scope and severity of the administration’s tariffs highlight just how truly unnecessary the tariffs are.

The DoD worries, as it should, that tariffs harm the American relationship with allies, and thus harm American security efforts.

Even worse, tariffs are harmful to domestic economic strength, which is the real source of both hard and soft American power internationally.

Implementing policies that are likely to diminish American productivity and competitiveness ultimately poses a direct threat to long term security efforts.

To continue reading: Not Even the Pentagon Thinks Tariffs Are Needed for National Defense


The real reason for Trump’s steel tariffs? He’s preparing for war, by Lawrence Solomon

Once in a while SLL posts two articles together that reach diametrically opposed conclusions. Such is the case with these next two articles. From Lawrence Solomon at financialpost.com:

Those who see Trump as threatening a free market in steel should see the world as it really is and welcome, rather than berate Trump’s initiative

President Donald Trump speaks before signing the ‘Section 232 Proclamations’ on steel and aluminum tariffs in the White House on March 8, 2018Chip Somodevilla/Getty Images

President Trump’s decision to apply steep tariffs to steel imports on grounds of national security met with a loud chorus of protests at home and abroad, by many trying to divine what could possibly be going through Trump’s mind. Trump is an economic illiterate, he’s a protectionist, some reasoned; he’s targeting Canada to get concessions on NAFTA, he’s playing to his base, others pronounced.

These explanations miss the mark. Though Trump doubtless sees taunting Canada on NAFTA and playing to his political base as furthering his agenda, these are but freebies, sideshows to the main event. Trump is acting sincerely, and legitimately, in the national security interests of the United States. Canada isn’t his target; China is.

Trump is old enough to know that during the Korean War, president Harry Truman seized the U.S. steel industry to maintain production for America’s then-vulnerable wartime economy. During the Second World War, when the U.S. dominated the world’s steel production, rationing was nevertheless needed — the public was even exhorted to donate their automobile bumpers to the war effort as scrap steel.

Today, the U.S. has not only lost much of its steel capacity, it’s at risk of losing the balance, making it dependent on a host of countries: Canada, its largest and most reliable foreign supplier, meets just five per cent of U.S. needs. According to the U.S. Commerce Department, the United States is now at risk of finding itself “in a position where it is unable to be certain it could meet demands for national defense and critical industries in a national emergency.” If dependent on a foreign country, the department warns, the U.S. would not have the legal authority to commandeer supplies as it could within the U.S.

To continue reading: The real reason for Trump’s steel tariffs? He’s preparing for war