Replies

But trade deficits of 5 percent of GDP cannot continue indefinitely. Eventually, a currency begins to fall, as has been happening to the dollar, and the price of the foreign goods on which America now depends rises. And as prices rise, Americans buy less from abroad.

This is called self-correction. Markets work.

Yet, the president is now being bashed for the most sensible decision he has taken to put America first: the imposition of tariffs on foreign steel being dumped into the United States, which had put 30 U.S. steel companies in bankruptcy.

I had a conversation this weekend with my friend who runs a small metal stamping company. Steel in a variety of rolls and sheets is his basic raw material. Thanks to steel tariffs, my friend has seen his materials cost jump 40%. Many of his customers cannot or will not take a price increase. Basically, his larger customers (think automakers) have told him they can import parts cheaply from Mexico and China. Others are import-impacted at the finished product level, are struggling to survive themselves, and cannot take a big increase in domestic steel prices.

By imposing tariffs on steel but not steel parts and finished products, Bush has shafted everyone downsteam of the steelmakers. I would bet significantly more jobs are being lost than gained by this.

Perhaps I should mention that my friend has laid off 25% of his employees. He is a rock-ribbed Republican who is rethinking his political support.