Trade: What the …?

If I remember right the whole thing about US tariffs on steel and aluminum was because because China was overproducing and dumping the rest on the world market. In trade, dumping has a particular meaning of intentionally selling a commodity below cost to drive competitors in other countries out of business.

So the nasty guy announce tariffs and invited companies and countries to apply for exceptions. Canada, Mexico, and the European Union got those exemptions, but only temporarily. I haven’t been able to keep track of what happened to the tariffs on China steel – the country at the center of this mess. Since this has been missing from the news about China I wonder if the whole thing got quietly fixed (a Chinese donation to a nasty guy real estate deal in southeast Asia probably worked wonders).

But the exemptions on tariffs against Canada, Mexico, and the EU expired. And the nasty guy decided to not renew them.

Welcome to an inside out world. China is one that Europe also says is the bad actor. The US, Canada, Mexico, and the EU could team up and really get China to do something about steel dumping. But the tariffs have been applied against allies and not the bad actor.

Canada and America share a 5,000 mile border with no military installations anywhere along the length. Our economies are closely interconnected (something we feel quite a bit here in Detroit). We’ve been great friends and allies for a long time.

Melissa McEwan of Shakesville put together a few tweets on the subject and added some commentary. In a couple tweets Jasmin Mujanovic wrote:

Much of the post-1945 liberal international order, and especially after 1989, was based on two principles: collective security (i.e. NATO) and free trade (i.e. the EU, GATT, NAFTA, the WTO etc). Trump is systematically undermining both. This is a tectonic shift in world history. I fear even people who really should know better are in denial about the damage that is being done. Even if Trump & everyone else steps back from the brink of a global trade war, these are massive body blows to the integrity of what remains of liberal internationalism.

Canadian Prime Minister Justin Trudeau has been saying the diplomatic equivalent of What the …? Mujanovic again:

… it is a clear signal of how fundamentally Ottawa feels betrayed. And that's a sentiment largely shared by the EU states. So, beyond the economic impact, it's the political fallout that will burn us all.

As I listened to this on All Things Considered on NPR I wondered: Why? Why is the nasty guy doing this? Who benefits?

McEwan has a good guess who benefits: Russia’s Vladimir Putin. Who has the strength to counter any aggression from Putin? About the only organization that can is NATO. Today’s action drove a wedge into NATO. McEwan suggests another reason: The two countries with the longest coastline in the Arctic are Russia and Canada. As the ice melts Russia is making moves to claim Arctic resources. Canada – without US backing – would have a hard time countering Russia’s moves. McEwan also suggests that Putin may make moves on Canada, not just the Arctic.

Skeptical? Here’s another piece of the puzzle. Zev Shalev summarizes and links to a New York Magazine article:

Trump’s 10% tariff increase on Canadian aluminum (among other metal tariffs on US allies) comes weeks after he saved Russia’s aluminum giant, Rusal, from disaster by granting a sanctions reprieve to its oligarch owner, Oleg Deripaska.

Commenter Fannie Wolfe gets the final word:

Especially as of late (and in light of news like this), I fear that the things this regime are breaking are not going to be able to be unbroken, even as a large portion of the political left might be pinning hopes on impeachment.