
James A. Dorn
President Trump’s recent decision to impose tariffs on imports of steel and aluminum was met with Chinese tariffs on U.S. products and agricultural goods. In turn, this has escalated with each country identifying additional barriers to trade. To prevent a damaging trade war, and for our mutual long-term benefit, the United States and China need to negotiate a free trade agreement.
As foreign policy is changing. With the selection of CIA Director Mike Pompeo to replace Rex Tillerson as secretary of state, President Donald Trump appears to be taking charge of his foreign policy. National Security Adviser H.R. McMaster and Defense Secretary Jim Mattis remain counsels of caution on many issues, but the former’s tenure could be short, and the latter might choose to exit if his advice has increasingly less effect.
Last week President Trump announced that he’ll impose tariffs on imported steel and aluminum of 25 percent and 10 percent, respectively. Since the U.S. steel industry has suffered over the last few decades, this action might seem like a good idea — but is it? Here’s the reality. This action will punish American workers, invite retaliation — most likely against agricultural products from our Midwest — and harm U.S. exports.
The Council on Foreign Relations points out that as a result of The North American Free Trade Agreement (NAFTA) regional trade increased sharply over the treaty’s first two decades, “from roughly $290 billion in 1993 to more than $1.1 trillion in 2016. Cross-border investment has also surged, with U.S. foreign direct investment (FDI) stock in Mexico increasing in that period from $15 billion to more than $100 billion.”
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