OK, folks, it’s time to talk tariffs. Trump’s on-again, off-again trade war with Canada and Mexico is a complex topic, but here we go.
I support free trade and largely oppose tariffs. However, there are aspects of Trump’s approach to trade policy that make sense. Getting tougher on the People’s Republic of China, a rising power that is in direct competition with the United States on a global stage, is a good move. China must not be allowed to do whatever it wishes all over the globe and still benefit from friendly trade relations with the United States.
For instance, it is working with other countries to establish a new global reserve currency as an alternative to the U.S. dollar; that’s a threat to our national security that must not be allowed to stand. It’s perfectly reasonable to use trade to force greater cooperation from China. It’s comparable to the maximum-pressure economic campaign against Iran that Trump imposed during his first term.
There’s another aspect of Trump’s trade policy that’s perfectly reasonable: imposing reciprocal tariffs on other nations that mirror what they impose on the United States. Trump hasn’t quite followed through on this yet, but it’s one of his good ideas. While I fully support free trade, it must not only be free, but fair.
This is a long-neglected aspect of U.S. trade policy that should have been reexamined and renegotiated long ago. It’s a big part of the reason why large swaths of the American public believe that free trade does more harm than good to the country as a whole: because it’s never truly been totally free. Instead, it’s been a set of rules that restricted the ability of the United States to exercise its economic influence around the world — while allowing other countries to restrict our access to their markets. That’s not free trade; it’s subsidized international trade at the expense of the American people.
The trade threats against Canada and Mexico don’t make much sense.
Unlike China, these are not dictatorial rivals, and unlike many other countries, they haven’t been allowed to impose sweeping tariffs against the U.S. while we allow their products in without penalty. Instead, they’re fellow democracies who are our two closest trading partners. We shouldn’t be doing anything to undermine those economic relationships, in any way, shape or form; they are a strength of our country, not a weakness — especially if we face the possibility of a greater confrontation with China in the coming years.
If the United States has requests of our two neighbors, we ought to first pursue them diplomatically. Seeking their help to control the flow of illegal drugs and illegal immigrants in to our country is perfectly reasonable, but it must be negotiated — either with each of them separately or on a trilateral basis — before threatening tariffs, let alone imposing them.
Moreover, if we’re going to begin such extensive negotiations, we need to go into them with a specific set of reasonable requests, rather than wide-ranging, vague demands. Imposing or threatening to impose tariffs on a monthly basis only serves to add to the economic uncertainty — something that doesn’t help businesses, workers or the economy of any country.
Rather than swinging back and forth on a monthly basis, Trump ought to begin negotiations with Canada and Mexico over a specific set of requests with a specific timeline for negotiations to end. If he wants to use the imposition of tariffs as a threat should those negotiations fail, then at least businesses in all three countries will know what to expect and when. That would reduce the uncertainty and the potential economic fallout for everyone. Trump can take the same approach with other allies, like the United Kingdom and the European Union.
While Trump is right that the United States needs to counter China’s influence, if he thinks we can do that alone, he’s wrong. In order to counter China properly, we’re going to need the cooperation of our friends and allies all over the world.
If the administration is truly serious about taking China, they need to bolster our relations with Canada, Mexico, the UK and the EU. It’s time for them to settle the issues they have with our friends and allies and focus on undermining our common foe.
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