President Trump's tariffs announcement yesterday ... 25% on steel and 10% on aluminum ... has roiled the stock market and the emotive pronouncements of "free-traders" on cable TV. My reactions to this event are fourfold:
1 - I agree with Trump that these two industries are vital to the U.S.'s strategic defense future and keeping these capabilities vital and at home is worth the risk and the price.
2 - Trump has been accused of letting his business interests influence his policy decisions as president. These tariffs will increase the prices of two materials that are used in the construction of large buildings -- a Trump business mainstay.
3 - Since the United States has trade deficits with just about every country in the world, retaliation to Trump's move by other countries should be far more damaging to them ... maybe even suicidal.
4 - Like what has happened with other industries (like the autos) ... it is quite possible that foreign producers might retaliate by just moving their manufacturing into the U.S. This would also be good for our employment levels and increase level-playing-field competition within. This is good.
So, don't panic quite yet.
