Canada, Mexico No Longer Pose National Security Threats to the US

We have finally admitted that Canada and Mexico do not represent national security threats:

The United States agreed Friday to lift its tariffs on industrial metals from Mexico and Canada, clearing a major obstacle to congressional passage of President Trump’s new North American trade deal.

….Senate Republicans, including Sen. Charles E. Grassley of Iowa, the powerful Finance Committee chairman, had said they would not approve the deal while the tariffs were in place. Iowa farmers were among the casualties of Mexican retaliatory tariffs, which cut deeply into U.S. agricultural exports. The Mexican tariffs, and similar Canadian levies, also are being eliminated.

As you can see, this decision had nothing to do with national security, which means it never had anything to do with national security in the first place. I’m sure you are all shocked to hear that.

In any case, this is why it was always ridiculous to think that tariffs would cause American steelmakers to invest heavily in new capacity. It takes years to build a new steel mill, but only minutes to wipe out a tariff. In this case, 20 percent of American steel imports were released from tariffs with the stroke of a pen. (And nearly half of aluminum imports.) Overnight, a new mill that made sense might suddenly not pencil out.

Besides, a temporary increase in capacity utilization from 74 percent to 77 percent was never going to send the green eyeshades set into a money-spending mood in the first place. Only an idiot would base long-term capex spending on politically motivated tariff decisions that could change from one day to the next depending on what Fox & Friends happens to say one morning.

Also worth noting: no tweet! Apparently President Trump isn’t very excited when he removes tariffs, even though that’s what his trade war is allegedly about.


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