Yeah, so true to all of the reporting from Wednesday evening (I tried to document the whirlwind of headlines and weave them into some kind of coherent narrative for you here), the Trump administration, in its infinite wisdom, has decided to go ahead and slap the E.U. (climate-loving, car cheaters), Mexico (drug dealing rapists) and Canada (pussy-footing, wood thieves) with punishing steel and aluminum tariffs.
The decision, essentially reported on Wednesday after multiple leaks, came just a day before temporary reprieves expired. As noted in the linked post above, this also comes just two days after Trump did an abrupt U-turn on China, seemingly abandoning the truce touted by Steve Mnuchin earlier this month. That looks like Trump responding to criticism from the likes of Steve Navarro and Steve Bannon. It’s just another manifestation of the President’s overriding tendency to make policy based on whatever the last person he talked to told him.
Obviously, Thursday’s decision imperils the ongoing NAFTA negotiations and represents a further escalation on top of the administration’s recent threat to slap tariffs on auto imports in the interest of “national security”.
Additionally, this threatens to further alienate America’s European allies at a time when Trump needs their support following his decision to pull the U.S. out of the Iran deal, a decision that was not well received by EU officials (or by anyone else for that matter).
“This is a significant competitive disadvantage in our largest export market, and the implication there is this will be a serious drag on investment and employment in Canadian steel”, lamented Joseph Galimberti, president of the Canadian Steel Producers Association, who also said the following:
This is an unprovoked attack on Canadian steel workers, 22,000 Canadians who work in steel in Canada. Canada has a long history of fair trade in steel with the U.S. and the notion that we’re a national security threat is just — I mean, pick your invective. Questionable, in the least.
Juncker is furious and promised that the EU will immediately retaliate (sorry Harley and Jack).
“This is a bad day for world trade,” Juncker said at a conference in Brussels, adding that Europe’s response would come within “hours”. “It’s totally unacceptable that a country is imposing unilateral measures when it comes to world trade,” he continued, adding that “what they can do, we are able to do.”
Germany’s pissed. “[This is] fundamentally wrong and extremely dangerous”, Joachim Pfeiffer, a lawmaker in Merkel’s Christian Democratic Union, said. “President Donald Trump isn’t just lighting a spark — there is a danger that this decision could cause a serious fire.”
Speaking of Germany, a truly hilarious report surfaced earlier Thursday in WirtschaftsWoche. Just read this crazy shit (translated):
US President Donald Trump has announced to French President Emmanuel Macron to exclude German premium car makers from the US market. On Macron’s visit to Washington in April, Trump said he would maintain his trade policy until no Mercedes models rolled on Fifth Avenue in New York. This reports the WirtschaftsWoche, citing several diplomats from Europe and the United States .
Who knows, maybe he just wants Fifth Avenue clear so he can “shoot somebody” in the “middle” of it.
there are two hilarious parts of this CNBC screenbgrab, both highlighted. pic.twitter.com/K8atd68q19
— Heisenberg Report (@heisenbergrpt) May 31, 2018
WirtschaftsWoche continues as follows:
Trump’s grudge against the German automaker – and especially against Mercedes models in New York – is not new. In January 2017, prior to his inauguration, he said in an interview, “When you walk down Fifth Avenue, everyone has a Mercedes-Benz in front of their house.” But that’s not reciprocity. “How many Chevrolets do you see in Germany?”
I have no idea how many Chevys you would see if you went hunting for them in Germany, but if the answer is “not too many” one reason why could be that Chevys are pieces of shit and Mercedes are miracles of German engineering and status symbols. But you know, who needs common sense when you’re trying to appease the Roseanne crowd?
The market reaction is obviously negative although it’s not clear why people weren’t pricing this in overnight considering it was a foregone conclusion.
trump summing up this month so far… pic.twitter.com/SBWf5Z7zMl
— Heisenberg Report (@heisenbergrpt) April 5, 2018