Trump has said that the tariffs are necessary on national security grounds, but Malmstrom insisted this is a ruse: "We suspect that the USA move is effectively not based on security considerations but an economic safeguard measure in disguise". The real culprits were bungled monetary policies and financial market chaos. Tariffs will shift demand to domestic steel, enabling plants here to operate closer to capacity. Or why not take things a step further and reinvigorate the TTIP negotiations, which failed not least because of the chlorine-washed chicken in order to remove reciprocal trade barriers? Hoover, writes Whyte, supported Smoot-Hawley "for political reasons rather than economic reasons".
Tariff bashers also accuse Trump of abandoning "free trade".
Harking back to two world wars and the Cold War, Tusk said: "I would like to stress today that the free world has survived the most hard decades only thanks to the fact that Europeans and Americans have been real friends". "Trump's latest action in imposing trade tariffs must be seen in this context". This free trade rhetoric is disguised anti-Americanism. And if there is even the slightest chance of preventing Mr. Trump from his trade harakiri, it should be taken. Cecilia Malmstrom, the European Commissioner for trade outlined that national security can not be the reason behind the imposed tariffs. But the best approach would be coordinated action between European Union countries that falls within the framework of the WTO - if only to send out a signal of confidence in a rules-based, world trade order.
That helped continue a trend of flattening yield curves on USA government bonds, with the spread between two- and 10-year Treasury yields down 3.2 basis points to 55.3 basis points.
On Wall Street, the Dow Jones was down around 1 percent, thanks in part to hefty losses at industrial companies like Boeing, which had been down more than 4 percent before regaining some ground Wednesday afternoon.
The difference this time around is that an American president is questioning the world trade system, a far from ideal system, for the first time since World War II.
While a US rate rise next week is already priced in, Tuesday's data showing annual USA core inflation steady at 1.8 percent did not persuade markets the Federal Reserve would raise rates more than three times this year. Europe is by no means as exemplary on trade issues as it likes to pretend. "This argument", said Friedman, "has no validity whatsoever either in principle or in practice".
The US text, released to the media by a Geneva-based trade official, comes as the 164-member WTO faces challenges unprecedented in its 23-year history. These winners and losers are different from a competitive system, where the best steel manufacturer who has the cleanest furnace, consuming the least electricity, makes the most sales. "Competition in masochism and sadism is hardly a prescription for sensible global economic policy!" How does one make that argument to an autoworker or steel worker, or to an average voter, business owner, or politician? Who loses more here? When there is evidence that foreign nations are "dumping" and subsidizing and protecting their workers, Friedman's argument carries little weight. This dilemma is the reason all governments have avoided the Article XXI exception in all but rare cases such as United Nations based economic sanctions.
US Trade Representative Robert Lighthizer recently proposed a package of tariffs targeting the equivalent of US$30 billion a year in Chinese imports, one White House official told Politico.
"Industries that would be helped by a reduction in imports from China include steel, aluminum, telecommunications equipment, furniture and textiles".
Friedman's argument has not caught on economically or politically, nationally or internationally, and certainly not in Canada. We should go back to these talks now. That's the missing link in global trade.