By Isaac Cohen*
A loud negative reaction has provoked President Donald Trump’s announcement that he wants to impose tariffs on imports of steel and aluminum, because “trade wars are good, and easy to win.”
Investors received the news with a plunge of 1.7 percent in the Dow Jones Industrial Average, intensifying the concerns about the government economic policy, which may be signaling the end of the 9 year expansion in the stock market.
Trading partners were surprised, because the measure would hurt more allies than adversaries. For instance, the six main suppliers of US steel imports are Canada, South Korea, Mexico, Brazil, Germany and Japan, in that order. By contrast, China with almost half of world steel production capacity, last year ranked 11th among suppliers of US steel imports.
However, the surprise did not last, because the European Union almost immediately identified certain imports from the United States as potential retaliatory victims. Noticeably, for instance, Harley Davidson motorcycles, produced in Wisconsin, the state of Speaker of the House Paul Ryan. Also Kentucky Bourbon, the state of Senate Majority Leader Mitch McConnell.
Nonetheless, some of the most severe criticism came from The Wall Street Journal editorial page, which usually praises the President’s economic success. The next day after the announcement, an editorial called the measure “a tariff folly” and “the biggest policy blunder of his Presidency.”
*International analyst and consultant, former Director ECLAC Washington Commentator on economic and financial issues for CNN en Español TV and radio, UNIVISION, TELEMUNDO and other media.