Lawrence Solomon: The Real Reason For Trump's Steel Tariffs? He's Preparing For War

Authored by Lawrence Solomon via Financial Post,

Those who see Trump as threatening a free market in steel should see the world as it really is and welcome, rather than berate Trump’s initiative...

President Trump’s decision to apply steep tariffs to steel imports on grounds of national security met with a loud chorus of protests at home and abroad, by many trying to divine what could possibly be going through Trump’s mind. Trump is an economic illiterate, he’s a protectionist, some reasoned; he’s targeting Canada to get concessions on NAFTA, he’s playing to his base, others pronounced.

These explanations miss the mark. Though Trump doubtless sees taunting Canada on NAFTA and playing to his political base as furthering his agenda, these are but freebies, sideshows to the main event. Trump is acting sincerely, and legitimately, in the national security interests of the United States. Canada isn’t his target; China is.

Trump is old enough to know that during the Korean War, president Harry Truman seized the U.S. steel industry to maintain production for America’s then-vulnerable wartime economy. During the Second World War, when the U.S. dominated the world’s steel production, rationing was nevertheless needed - the public was even exhorted to donate their automobile bumpers to the war effort as scrap steel.

Today, the U.S. has not only lost much of its steel capacity, it’s at risk of losing the balance, making it dependent on a host of countries: Canada, its largest and most reliable foreign supplier, meets just five per cent of U.S. needs. According to the U.S. Commerce Department, the United States is now at risk of finding itself “in a position where it is unable to be certain it could meet demands for national defense and critical industries in a national emergency.” If dependent on a foreign country, the department warns, the U.S. would not have the legal authority to commandeer supplies as it could within the U.S.

“Our steel industry is in bad shape,” Trump tweeted. “IF YOU DON’T HAVE STEEL, YOU DON’T HAVE A COUNTRY!”

Those who believe war is for the history books, never to inconvenience us in our daily comforts, naturally view Trump as some kind of madman, senselessly protecting a few steelworkers in an economically irrelevant industry at a great cost to the rest of the labour force and economy. But those with a longer time frame and a sense of history — and especially those who can sense the gathering storm of war — make different calculations.

Trump, like president Ronald Reagan before him, believes in peace through strength. He wants a military so dominant, and an economy so robust, that no adversary would ever dare challenge it. At the same time, Trump wants to take on today’s Evil Empire, the country that represents a future existential threat to the U.S. — China. An uncompromising ally in this project to neuter China — a man Trump calls a visionary — is Peter Navarro, his chief trade adviser, formerly a professor of economic and public policy at University of California and the author of Death by China, a 2011 book that warns, “China’s perverse form of capitalism combines illegal mercantilist and protectionist weapons to pick off American industries, job by job. China’s emboldened military is racing towards head-on confrontation with the U.S.” Navarro’s other China book, The Coming China Wars published in 2006, described China as a ruthless emerging power likely to succeed in its ambitions of dominance.

The Trump-Navarro policy of confronting China through tariffs on grounds of national security is not a cynical excuse to justify protectionism. It reflects profound alarm over America’s preparedness in confronting a China that through government subsidies has acquired a stranglehold over the global steel industry: China now accounts for half of the world’s entire steel production. Without countering foreign steel subsidies in general and those from China in particular, the U.S. steel industry will be unable to survive.

The world’s steel exporters will doubtless challenge Trump’s claim that he’s acting in the interest of national security before the WTO. They will need to wait in line: The U.S. currently has 169 antidumping and countervailing duty orders in place on steel, 29 of them against China, along with 25 ongoing investigations. And the world’s steel exporters should also be prepared to lose. Under WTO rules, national security is a valid ground for levying tariffs and both the U.S. Commerce Department and the U.S. Department of Defence agree that national security is at stake.

Those who see Trump as threatening a free market in steel should see the world as it really is and welcome, rather than berate Trump’s initiative. He is now the world’s best hope — perhaps only hope — for bringing a semblance of free-market discipline to the global steel industry.

Comments

Son of Captain Nemo Sun, 03/11/2018 - 21:47 Permalink

BINGO!

But in actuality the crypto mining services getting kicked out of China and Russia are the REAL reasons why the tariffs on aluminium and steel are not only hollow given the fact the U.S. can no longer compete having given too much of it away to the Far East better than 30 years ago -but will be the excuse that the Americans will BUY in order to commit themselves to their own mass financial extinction which started in earnest after the bank bailouts 10 years ago!!!...

I actually believe that if Trump can make enough of an economic argument that China, Iran and Russia are to blame for the demise of the U.S. Dollar he probably won't even need a 9/11 pretext in order to sell them on giving up their "lives"!

It's either fight them over there!... Or live in destitute poverty that WILL BE AS BAD IF NOT WORSE then the poorest of the poor under sanctions in Yemen, Iraq, Syria, Afghanistan, Libya and of course North Africa!...

We'll of course leave out the part about your government in Washington D.C. being to blame for ALL OF IT!!!  But the beauty is he and Congress both know how DUMB YOU ARE... And that you will never blame them for what happened after the Gulf War, the Balkans or "9/11 (http://www.ae911truth.org/)" and that it doesn't make any difference in the Nanny State once the welfare checks, social security, pensions and credit go into permanent "lock up"!!!

 

bshirley1968 IH8OBAMA Sun, 03/11/2018 - 22:07 Permalink

"Trump, like president Ronald Reagan before him, believes in peace through strength. He wants a military so dominant, and an economy so robust, that no adversary would ever dare challenge it."

Well, this ain't 1980, Trump isn't Reagan, and both of those ships sailed long ago. Due to Russia's latest announcement regarding its military capability, the military dominance of the US is on the downhill slide. The economy will never recover under the debt load it is carrying.....no matter how many tariffs or how much steel and aluminum we make.

In reply to by IH8OBAMA

ZeroSpam lloll Sun, 03/11/2018 - 23:54 Permalink

^^^   lloll  <<< CHRONIC  years-long SPAMMER     ^^^

His "disguised" links  (BIG FALSE FLAG) will take you to his Trojan- and Spam-laden "Whacked Out Biblicism" webpage.   He also posts as  "stizazz" and has been banned countless times for more than five years with countless log-ons.

 

Copy and paste the following text and send to abuse@zerohedge.com

"BAN and REMOVE spam accounts  "lloll"  and   "stizazz"   who are more log-ons from CHRONIC Spammers that ZH has been banning for years (that's you, too,  biblicism  &  dailywesterner)"

 

In reply to by lloll

Escrava Isaura ZeroSpam Mon, 03/12/2018 - 05:44 Permalink

Ignoramus, no one is going to attack, and even less tries to invade America. Both statements are nonsense.

America needs to save its energy, which it doesn’t have much left, and its resources for the coming (2030) collapse.

The last thing America needs is to spend these two critical resources in manufacturing, meaning shitty jobs.

Another mistake is crypto currencies because it takes too much energy.

Ignoramus, energy and your environment are more valuable than fiat ‘fraud’ means of exchange, meaning currencies, it doesn’t matter in which form —paper, digital, or plastic.

 

In reply to by ZeroSpam

Farqued Up bshirley1968 Mon, 03/12/2018 - 04:53 Permalink

A basic tenet of Mercantilism is the Gov getting in bed with big business that exports (absolutely no problem so far) and pass all laws necessary to balance or have a trade surplus. Well hell, with derivatives, off balance sheet, no peg to gold, no restrictions on the Bankster Counterfeiters, who gives a wild fart about deficits and debt, and double hell with free markets, gimme more debt, Debt, DEBT, NOW!!!

it may be time to turn back the clock to sound money and even spike it with some Merc policies until the Gov can be muzzled. I don’t know, it sure seems counterintuitive to even suggest it. What they will do is try to keep layering IMF type solutions, plus Parker Bros.' Monopoly Money with several boards and the BIS holding the fake money in digital format. That horse jumped the barn gate and left already.

Trump may be saving Bankster lives because it’s coming down to the wronged populace killing the bastards, all generations after us Boomers are really going to be pissed, gotta be because I’m livid and I’m an old fart.

In reply to by bshirley1968

crossroaddemon Oldwood Sun, 03/11/2018 - 22:46 Permalink

No, you can't. I'm shamelessly exploiting an artificial advantage... I can show people youtube videos of me playing with rock stars, and I get to charge twice as much as anyone else around me and still get basically all the students. In a small town like this there's really only room for one or two teachers, and my background means I get to charge big city prices and still edge everybody else out. You use the advantages you have.

Nevertheless, if you're halfway bright I have to think you can find SOME niche that will allow you to avoid wage slavery. 

In reply to by Oldwood

uhland62 crossroaddemon Sun, 03/11/2018 - 23:30 Permalink

... and if the revenue from tariffs is put to productive use it ain't so bad.

At the same time, each and every President must have a war to his name. Some even manage several, like Obama for Syria, Libya, and Yemen. With Africom came more intensive wars in e.g. Niger and South Sudan. 

Trump does things bigly so his war selection could well be China, although the new billion Dollar military hospital in Germany could mean more wars in the ME, Africa, and with Russia which then draws China in. There must be war for each President.  

In reply to by crossroaddemon

I am Groot Bigly Mon, 03/12/2018 - 02:25 Permalink

We won't ever process it ourselves. One of the many reason we got into Afghanistan was for rare earth minerals. We've been there since 2001, not a single fucking rock of anything mined yet. Meanwhile, China got in and is mining its ass off there. And now now they are setting up in Africa too.

Our government is about as functional as a trout out of water with diarrhea......

In reply to by Bigly

Mustahattu I am Groot Mon, 03/12/2018 - 08:28 Permalink

The US did not go there for the rare earths. That's total bs. They only figured out 10 years after invasion that there's some minerals in the ground they can steal. Only a few years ago they figured out that instead of destroying the opium fields they should instead buy that shit real cheap direct from the farmers and sell to the pharma industry for a massive profit.

There's hardly any mining activity in Afghanistan by anyone. I've read about one copper mine run by the Chinese.

You also don't seem to understand that the Chinese go to various countries and build up infrastructure, power plants, roads, ports, etc. The US go to various countries and invade, bomb, sell weapons to all sides, and destroy everything.

Tillerson is running around Africa telling them to not trust the Chinese and not to take up their offers of building up their countries. As if they are going to listen to that shit and put their fate in the hands of a bunch of back-stabbing zionists.

In reply to by I am Groot

johnjkiii IH8OBAMA Sun, 03/11/2018 - 22:57 Permalink

China has something like 97% of the world's tungsten, an essential to steel production among others. It has massive un-tapped strategic metals reserves. These are used as alloys to harden steel & aluminum. They can drive the world price up or down at will. Our advantage is that China is another inept bureaucratic socialist monstrosity, much like the country with the worlds largest reserves of oil. Trump's advantage is that he understands it.

In reply to by IH8OBAMA

Endgame Napoleon IH8OBAMA Mon, 03/12/2018 - 00:39 Permalink

We need to resuscitate our whole manufacturing sector, assuming it is not too late due to impending lights-out manufacturing, but even then.....Even though it needs to be done in a bigly way, this could just be an attempt to get cross-over voters to the polls in the mid-terms, keeping Swampers in their $175k jobs, after which RepubliCONs return to the Uniparty fold to defend illegal immigration and other anti-Deplorable themes. 

In reply to by IH8OBAMA

Mustahattu I am Groot Mon, 03/12/2018 - 08:34 Permalink

You are really demented. Could it be that those companies that build 'the machinery' went to China in the first place to pay a dollar per hour so their shareholders could get maximum benefit? Why don't you jackasses go after the companies that moved to China. Go after the shareholders. You are just so fucking stupid that you first create the problem and then blame other countries.

In reply to by I am Groot