Making good on campaign promises, President Donald Trump last week vowed to impose stiff tariffs on steel and aluminum imports.
That pledge set off a wave of concern from economists, world leaders and members of Trump’s own Cabinet who fear the move could provoke retaliatory actions leading to a global trade war.
Trump responded by saying a trade war would be “easy” to win. His advisers aren’t so sure and one has even threatened to quit if he follows through with the imposition of tariffs. That gives you some inkling on how potentially disastrous the move could be.
On Monday, the president raised more eyebrows when he criticized NAFTA, tweeting the U.S. has large trade deficits with Mexico and Canada, and that his proposed tariffs on steel and aluminum won’t be removed from the two countries unless they renegotiate the trade treaty.
Critics pounced saying Trump was using the tariffs to blackmail the rest of the world, turning longtime allies like Canada into enemies.
There is no question that if tariffs are imposed and a trade war ensues, American companies that use steel and aluminum to manufacture their products will feel the impact as will the consumers who buy those products.
Things like washing machines, cars and beer cans could cost more to produce. The price of farm equipment could go up. So could the cost of homes and office buildings. Bridges, rails and tunnels will cost more. So will cell towers, pipelines, power plants and water pumping stations.
It’s anyone’s guess if Trump will actually go through with the tariffs. Our president is prone to making statements simply to garner headlines or test the waters. He uses media, especially social media, as a sounding board for policy discussions.
And he doesn’t always get the facts straight. For instance, if you include trade in services, the U.S. actually runs a trade surplus with Canada. It’s also true Canada is the top supplier of imported steel and aluminum to the U.S.
If a trade war between Canada and the United States were to occur, and our friends from north of our border were to retaliate, our state could feel the effects.
Canada is Missouri’s largest foreign trading partner. Missouri exported $5.2 billion in goods to Canada in 2016, representing 38 percent of the state’s total goods exports, according to the Office of the United States Trade Representative.
Canada was followed by Mexico ($2.5 billion), China ($864 million), Japan ($513 million) and Belgium ($492 million).
Here’s something else to consider: In 2016, Missouri exported $13.9 billion of Made-in-America goods to the world, which supported an estimated 88,000 jobs.
Trump may welcome a trade war, but our guess is there are plenty of Missouri businesses and consumers who would beg to differ.