TPT September 2018

G LOBA L MARKE T P L AC E

According to NR, the policy is no better on the merits: “Globally integrated supply chains mean that cars manufactured in the US (which include both domestic and foreign brands) often use imported parts, and that domestic companies occasionally manufacture overseas.” The obvious point is that the inevitable retaliatory tariffs would hurt American automobile exporters, despite Mr Trump’s rationale of protection for American auto companies. Notably, foreign and domestic auto companies, as well as some automobile production workers, have lobbied against the tariffs. “Of course, one way for companies to offset new costs is to raise prices, and here the tariffs have the potential to do real damage to American consumers,” wrote the NR editors. List prices for popular, mid-level vehicles are projected to rise by anywhere from $1,800 to more than $5,000 if these tariffs are imposed. Repairs and insurance would also become more expensive, since the taxes also apply to car parts. A self - inflicted wound “At a time when the economy is humming along, reducing the spending power of consumers like this would be a self-inflicted wound,” NR stated. Of course, this president rather specialises in self-inflicted wounds, and he has been complaining about the rules for automobiles since before his presidential campaign. “So none of this should be any surprise,” noted NR, which supplied background to the issue. Under the most-favoured- nation rules of the World Trade Organization (WTO), the US must keep duties on automobiles under 2.5 per cent. The European Union (EU) may impose tariffs up to 10 per cent, while China may impose still-higher tariffs. Mr Trump insists, plausibly enough, that this disparity is unfair. But, as per “Junk the Auto Tariffs”, the way to remedy this without imposing significant costs on workers, consumers and exporters is for the US to pursue multilateral trade deals with other countries. The proposed Transatlantic Trade and Investment Partnership (TTIP) deal, for instance, would have gradually reduced the automotive-industry barriers of both the US and the EU to zero. Needless to say, the NR editors wrote, “The reduction to zero of barriers on automotive imports and exports would confer more economic benefits on Americans than would the indiscriminate ratcheting up of barriers worldwide.” › But the Trump administration again appears to be opting for a different path, conceded Mr Trump’s on-again off- again apologists, who expressed the wan hope that Congress will marshal something beyond symbolic opposition to the tariffs. Legislation introduced in the Senate by Pat Toomey of Pennsylvania – a fellow Republican of Mr Trump’s – would in fact subject the president’s section 232 authority to congressional approval. But the fitfully enlightened editors of National Review do not sound very hopeful that Mr Toomey’s bill will become law. “We regret,” they wrote on 21 July, “that the president may take another, more serious lurch toward a trade war with our allies.” Dorothy Fabian, Features Editor (USA)

offered by Jim Russell, director of facilities construction and management for the project, is now $15mn. He said, “The tariff is definitely having an impact.” Derek Miller, president and CEO of the Salt Lake Chamber and Downtown Alliance, told KUTV, “One day you wake up and suddenly your costs are 30 per cent more than they were before.” Mr Miller’s advice to the Trump administration was that it refocus its attention on making trade deals instead of increasing trade tariffs. Automot i ve On yet another front, the US president seems prepared to ‘take another, more serious lurch toward a trade war with our allies’ National Review is an ardently conservative US “journal of fact and opinion” which, in the campaign phase of the presidential election year 2016, expressed strongly anti- Trump views. In fact, an entire issue of NR was dedicated to the proposition that a Donald Trump administration would be disastrous, not solely for the US. The editors recruited the best right-wing minds to cogently argue the case against candidate Trump. After Mr Trump’s election, the NR editors – whether making a virtue of necessity or for reasons of their own – fell in line behind the new president, and they have been in virtual lock- step with him ever since. Such self-contradictory contortions are not uncommon in the current American political climate, and this one would be of no special interest except for yet another about-face, by the same editors, demonstrated in a recent issue of National Review . The editorial “Junk the Auto Tariffs” (21 July) takes aim at Mr Trump’s professed intention to impose tariffs of 25 per cent on imported automobiles and automobile parts. As the Commerce Department, directed by the president to find statutory justification for his auto tariffs, prepared to hold hearings on the issue, the suddenly clear-eyed editors of National Review asserted that such tariffs “would be legally dubious and represent another blunderbuss shot at international trade.” Below is the gist of their exceptionally persuasive argument. R etaliatory tariffs would hurt The administration would apparently try to justify the auto tariffs under the same provision – section 232 of the 1962 Trade Expansion Act, which gives broad authority to the executive to adjust tariffs if doing so is in the interests of US national security – that it cited for the recently imposed steel and aluminium tariffs. “Junk the Auto Tariffs” notes that the invocation of this statute is an abuse of executive authority that distorts the law beyond its meaning: “Imported Mercedes sedans have even less to do with American national security than does Canadian steel.”

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SEPTEMBER 2018