'Makes no sense': Conservative WSJ slams Trump's 'splendid little tariff war' with Canada

12 March

Liberal Keynesian economists like former New York Times columnist Paul Krugman and right-wing economists influenced by the late Milton Friedman disagree on many things, but one thing they have in common is a vehement opposition to tariffs — which, Krugman and Friedman disciples agree, are terrible for both businesses and consumers.

The Wall Street Journal's conservative editorial board favors the right-wing Friedman/Chicago school of economics. And in a biting editorial published on Tuesday, March 11, the board is vehemently critical of the trade wars that U.S. President Donald Trump set off with Canada and other countries.

"President Trump wanted a trade war with the world, and Americans are getting it, good and hard," the WSJ editorial board argues. "Stock prices continued to decline on Tuesday amid the latest Canada-U.S. tariff tit-for-tat. By the end of the day, the two sides were talking about a temporary truce, but who knows which side of the tariff bed Mr. Trump will wake up on Wednesday?"

The editorial describes the tensions between Trump and Doug Ford, premiere of the Ontario province in Canada. Ford announced a 25 percent tariff on Ontario's electricity exports to the U.S., and Trump, the WSJ board notes, "went ballistic" and threatened to impose a tariff of 50 percent (as opposed to 25 percent) on Canadian metal exports to the U.S.

Trump also reiterated his desire for Canada to become "the 51st state." And the WSJ board laments that Trump's "trade war with Canada makes no sense."

"His exhortation that Canada become a U.S. state is a tacit acknowledgment that the two economies are deeply integrated," the board argues. "His splendid little tariff war will harm businesses and consumers on both sides of the border. The U.S. sources about two-thirds of its primary aluminum and 60 percent of scrap aluminum imports from Canada. Both are used by secondary U.S. aluminum manufacturers and fabricators, which oppose Mr. Trump’s tariffs."

The board continues, "They have a hard enough time competing against lower-cost producers in China and Turkey. Canada makes up a smaller share of U.S. steel consumption: about 6 percent. But Mr. Trump's tariffs will still raise costs for steel users that depend on Canadian supplies."

Trade wars, the WSJ warns, can easily go from bad to worse — and Trump's trade war with Canada appears to heading in that direction.

"The trouble with trade wars is that once they begin, they can quickly escalate and get out of control," the conservative board explains. "All the more so when politicians are nearing an election campaign, as Canada now is. Or when Mr. Trump behaves as if his manhood is implicated because a foreign nation won't take his nasty border taxes lying down. We said from the beginning that this North American trade war is the dumbest in history, and we were being kind."

Read the Wall Street Journal's full editorial at this link (subscription required).

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