Canada and Europe take aim at red-state, red-blooded, redneck US exports

(Originally published March 13 in “What in the World“) Canada and Europe imposed retaliatory tariffs against the United States.

Canada imposed 25% tariffs on imported American steel products and additional tariffs on cast iron, computers, monitors, tools, and even sports equipment—presumably even Bauer hockey sticks made in New Hampshire. Europe made a fashion statement by slapping tariffs on beef, bourbon, jeans, motorcycles, peanut butter, and poultry. Europe’s tariffs are aimed at Republican-held states but also seem to be aimed at a kind of red-blooded American lifestyle: it’s gonna be a lot more expensive now to down shots of Jack* before hopping your 501-clad tush onto your Harley to DUI down the autobahn.

U.S. President Donald Trump’s response was, predictably, pulled from the diplomatic textbook “I am rubber, you are glue…” Trump said he would impose still more tariffs on both Canada and Europe, saying “Whatever they charge us with, we’re charging them.”

Uncertainty among Americans about Trump’s “golden age of America” continues to rise. Consumers across the board are reportedly curbing purchases, from fast-food and big-box grocers to tony department stores and air travel.

Analysts scrambling to find method in Trump’s madness have lately seized on a theory that taxing imports and downsizing the federal government will somehow rebalance the U.S. economy, reducing its dependence on government deficit spending for growth and reduce the dominance of Big Tech by stimulating manufacturing investment.

Like the White House’s alleged plan for re-balancing the global currency regime, though, this one is based on a faulty, zero-sum assumption about the nature of business, trade, and economic growth. This one postulates that, as The Wall Street Journal puts it, “for the corporate sector on aggregate to earn profits, someone in the economy must be spending more than they earn.” So, their solution is to make the economy go cold turkey on government spending until private investment takes over.

Good luck with that. It’s still unclear just what industry might take off as a result of boosting import prices with tariffs. It apparently won’t be the auto industry: Trump has maintained former President Joe Biden’s opposition to letting Japan’s Nippon Steel buy U.S. Steel and thus keep it churning out the stuff they make American cars from. Aside from U.S. Steel, there is only one American steel company that makes the kind of steel automakers use: Cleveland-Cliffs. Cleveland-Cliffs could buy U.S. Steel, but that would result in something never great for competitiveness but which Trump might not actually oppose—a domestic monopoly.

And the U.S. regulatory and political system is rigged to discourage new investment in physical capital, as former White House National Economic Council Director Brian Deese writes for Foreign Affairs—whether it’s affordable housing, data centers, power plants, semiconductor fabs, or new bridges and roads. Trump’s tariffs on imported raw materials and the politically motivated efforts of Elon Musk’s “Dept. of Government Efficiency” will only make matters worse.

*Jack Daniels is technically a Tennessee whisky, not a Kentucky bourbon.