File photo taken on Dec. 7, 2016 shows people attending a rally calling for "more jobs and better wages" which was promised by Donald J. Trump during his campaign, in Washington D.C., the United States. With the United States retreating to the stronghold of protectionism and nationalism, concerns about a trade war are rising around the globe. (Xinhua/Yin Bogu)
In 1930, the Smoot-Hawley Tariff Act sponsored by U.S. Senator Reed Smoot and Representative Willis Hawley was signed into law. By raising U.S. tariffs on more than 20,000 imported goods, Smoot and Hawley promised America would start winning again.
Sounds familiar? Eighty-eight years later, by announcing planned steep tariffs on steel and aluminum imports, U.S. President Donald Trump made similar promises to defend U.S. workers from what he calls the "carnage" of "terrible trade deals."
Smoot and Hawley's promise had turned out to be empty. Their act only exacerbated the Great Depression and further destabilized the international order. What is awaiting the United States this time?
BACKLASH AT HOME
The planned new tariffs mark a fresh endeavor for the "America First" policy. Moving from rhetoric to action, the White House said the United States is set to impose a 25-percent tariff on steel imports and a 10-percent tariff on aluminum imports to protect the U.S. industry.
However, even core members of the U.S. administration do not believe the measure will work. The latest repercussion of the protectionist stance came from Gary Cohn, who has decided to resign as Trump's top economic adviser.
The former Goldman Sachs executive, who had a steady influence on U.S. economic policy, chose to leave due to a "fierce disagreement" over the president's decision on steel and aluminum imports tariffs.
"His departure raised questions about the direction of the Trump administration and sent Dow futures plummeting 300 points," said the CNN.
Prior to the move on steel and aluminum, the U.S. administration in January approved tariffs of up to 50 percent on imported washers for the next three years and of up to 30 percent on solar cells and modules for the next four years.
The move marked the first time that the U.S. government had ever used the so-called Section 201, an outdated tool under a rarely used Trade Act of 1974, to unilaterally impose tariffs or other trade restrictions on foreign imports since 2001.
Opposition ran high even before Cohn's departure. Levi's, known worldwide for its iconic jeans and one of the targets of the European Union's (EU) retaliation, said it was strongly against trade barriers.
"We support open markets and free trade where everyone plays by the rules. Unilateral tariff impositions risk retaliation and destabilize the global economy, in which case American brands, workers and consumers will ultimately suffer," said a spokesperson of Levi's.
Meanwhile, Business Roundtable, an association of chief executive officers of America's leading companies, said it strongly disagrees with the tariffs because it will hurt the U.S. economy and American companies, workers and consumers and would lead to foreign retaliation against U.S. exporters.
"Using 'national security' tools to implement tariffs could embolden other countries to impose 'national security' tariffs on U.S. exporters or otherwise restrict U.S. goods and services sold to their markets," said Joshua Bolten, president and CEO of Business Roundtable, in a statement.
KICKING HORNET'S NESTS WORLDWIDE
The Trump administration's aggressive move has unsurprisingly triggered furious reactions from the United States' trading partners, including many of its allies.
Believing the measures are "making no sense," "sending the wrong signal" or "absolutely unacceptable," they warned of serious damage by the planned tariffs to the international trade order, vowing to take "responsive measures" if necessary.
Criticism quickly came from America's largest source of steel imports,Canada. Canadian Prime Minister Justin Trudeau called the U.S. plan "absolutely unacceptable."
"The United States has a 2-billion-Canadian-dollar (1.55-billion-U.S.-dollar) surplus on steel with us, so we regard the imposition of any new tariffs or any tariffs on steel or aluminum between our two countries as absolutely unacceptable," he said.
It makes no sense for the United States to claim there is a national security imperative for imposing the duties, given the level of security cooperation between the two countries, he added.
Across the Atlantic, the air is also filled with fury. Commenting on the steep tariffs, the German Engineering Federation expressed concerns about the possibility of a "global trade war" creating a "spiral of reciprocal tariffs."
