On the matter of President Trump’s imposition of a 25 per cent tariff on US imports of steel and 10 per cent on aluminium, I cannot improve on the comments of the sage of Washington, the former Bank of England monetary policy committee member Adam Posen, who called it ‘straight-up stupid’ and ‘fundamentally incompetent, corrupt or misguided’. Indeed virtually all economically literate opinion was united in condemning a move which will hurt America’s steel-producing allies in Europe and South Korea without seriously impeding China’s advance, and will surely provoke a salvo of protectionist responses — contributing to a slowdown of global cross-border trade and investment that has been a visible trend since the beginning of this decade.
It’s the kind of bone-headed blue-collar populism embraced by the former Chrysler boss Lee Iacocca in the 1980s when he was briefly touted as a presidential candidate and compared himself to the revolutionary patriot Paul Revere: ‘I’m the only guy on a goddamn horse saying “The Japanese are coming, the Japanese are coming”… And it’s all the fault of the dumb sonofabitch who allowed them into our market free of charge.’ Yes, globalisation leaves its trail of victims; but a tariff war will ultimately be worse for everyone, including the workforce of America’s already diminished steel industry, with whom Trump has no genuine empathy at all.
The picture it brings to my mind is of the once mighty Bethlehem steelworks in Pennsylvania that was defeated by global competition in 1995, and whose site is now occupied by an exemplar of the one business sector Trump can truly claim to understand: a giant casino, built to exploit a politically disappointed populace that has been left with no other hope of prosperity.
This is an extract from Martin Vander Weyer’s Any Other Business, in this week’s Spectator