Trade War Ahead?
Cato Sponsor eBriefing
Friday, March 16, 2018
12:00 – 12:30PM EST
Featuring Dan Ikenson, Director, Cato’s Herbert A. Stiefel Center for Trade Policy Studies; moderated by Caleb Brown, Director of Multimedia, Cato Institute.
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On March 8, President Trump signed proclamations authorizing the imposition of tariffs of 25% on imported steel and 10% on imported aluminum. The decisions stem from two nearly yearlong investigations conducted by the U.S. Department of Commerce under Section 232 of the Trade Expansion Act of 1962, which found that imports of steel and aluminum “threaten to impair the national security” of the United States. That finding gives the President broad authority to mitigate the perceived threat by imposing trade restrictions. Although World Trade Organization rules permit member governments to raise barriers in response to perceived national security threats, that “exception” is widely considered a loophole in the system, and it is an unspoken rule that prudence—not political expediency—should inform any government’s decision to invoke national security to impose trade barriers. Indeed, this exception has never been invoked at the WTO.
It remains to be seen how other governments will respond to Trump’s tariffs. Will some impose restrictions on U.S. exports in the name of national security? Will others simply retaliate without pretense, as some governments have indicated they will do? Is there still time to head off or water down Trump’s tariffs? Or are we on the precipice of a trade war?
Join Dan Ikenson, Director, Cato’s Herbert A. Stiefel Center for Trade Policy Studies, for a discussion on how we might expect other nations to react, possible responses by Congress, and why there are no winners in a trade war.
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