President Donald Trump has made good on his promise by imposing tariffs of 25 percent and 10 percent, respectively, on steel and aluminum imports. He handed neighbors Canada and Mexico an olive branch by exempting them -- as long as the U.S. gets what it wants in talks to revamp the North American Free Trade Agreement -- and signaled he could do the same for other allies. The tariffs prompted an outcry from trading partners, Republican lawmakers, economists and business leaders. Talk of tit-for-tat reprisals by the European Union, China and other trading partners raises the prospect of economic growth slowing and stock and bond markets reeling out of fear that Trump just started an all-out trade war. Did he?
The dictionary says it’s “an economic conflict in which countries impose import restrictions on each other in order to harm each other’s trade.” Trump’s tariffs and the threatened retaliation from other countries certainly meet that definition, but so do centuries of protectionist skirmishes by numerous countries in countless sectors, not just the U.S. and not just in steel. What could make this episode more war than skirmish is Trump’s invocation of national security to justify tariffs -- which could open a Pandora’s Box of similar claims by other nations -- and his threat to further punish any country that reacts by imposing counter-duties.