Donald Trump Doubles Down On Steel/Aluminum Tariffs

Donald Trump

Less than 24 hours after announcing tariffs on steel and aluminum imports, Donald Trump triumphantly tweeted, “Trade wars are good, and easy to win.”

From The New York Times:

Mr. Trump appeared eager to defend his decision to levy sweeping tariffs on all imports of those metals, issuing a series of morning tweets explaining the need for tariffs. “Our steel industry is in bad shape. IF YOU DON’T HAVE STEEL, YOU DON’T HAVE A COUNTRY!” he said in one tweet.

Markets fell in response to Mr. Trump’s announcement on Thursday that he would impose tariffs of 25 percent on steel and 10 percent on aluminum, effectively placing a tax on every foreign shipment of those metals into the United States. Mr. Trump, at a hastily arranged meeting with industry executives on Thursday, said he would formally sign the trade measures next week and promised they would be in effect “for a long period of time.”

On Friday, he wrote that the measures would help to reduce the trade deficit, which is the gap between what the United States exports to other countries and what it imports. Mr. Trump has long lambasted the trade deficit as a sign of United States weakness.

“When a country Taxes our products coming in at, say, 50%, and we Tax the same product coming into our country at ZERO, not fair or smart. We will soon be starting RECIPROCAL TAXES so that we will charge the same thing as they charge us. $800 Billion Trade Deficit-have no choice,” he wrote.

The stock market did not enjoy the tariff announcement.

CNBC reported:

Stocks fell on Thursday after President Donald Trump said the U.S. will implement tariffs on steel and aluminum imports next week. The Dow Jones industrial average closed 431 points lower after rising more than 150 points earlier in the day. The 30-stock index fell as much as 586 points.

The S&P 500 declined 1.4 percent — erasing its year-to-date gains — with industrials as the worst-performing sector. It also briefly broke below its 100-day moving average, a key technical level. The Nasdaq composite fell 1.3 percent and dipped below its 50-day moving average.

When a country (USA) is losing many billions of dollars on trade with virtually every country it does business with, trade wars are good, and easy to win. Example, when we are down $100 billion with a certain country and they get cute, don’t trade anymore-we win big. It’s easy!

— Donald J. Trump (@realDonaldTrump) March 2, 2018

And speaking of the stock market, in related news longtime Trump confidant (and billionaire investor) Carl Icahn just happened to sell $31.3 million of stock in a company heavily dependent on steel just seven days before Trump's announcement of 25% tariffs on foreign steel.

Now, if I were cynical (Who? Me?) my mind might wander into the insidious world of insider trading...?

Icahn sold off nearly 1 million shares of Manitowoc Company which is “a leading global manufacturer of cranes and lifting solutions” and, therefore, heavily dependent on steel to make its products.

Industries ranging from autos to oil to construction equipment all saw declines in their stock in the aftermath of the announcement.