Trump Tariffs Could Be The World’s Window To A New Direction

Michael Czinkota Georgetown University
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President Trump has announced tariffs against steel and aluminum imports into the U.S to help domestic industries long suffering from import pressure. Pundits have bemoaned these steps as inappropriate and precursors to a trade war. But other considerations in play make these announcements useful.

Consider the difficulty with which shifts in policy and diplomatic direction are implemented in Washington. Bureaucrats typically outlast their current team of policy makers. So, it is often difficult for a well-intentioned appointee to implement change and witness its result.

Trade is only one of the economic components of government, and just part of many parameters forming policy. New policy makers go through all the same motions as those before them: the initial touching of base, the mutual assurances of collaboration, and the plans to develop a joint vision.

But, little if anything happens. Things just chug along without new outcomes. More time brings new issues which take priority compared to the other pressing concerns. The current trade structure may become acceptable to many leaders and make change even more difficult.

If President Trump wants to see change in a global issue, such change is slow in coming. To speed things up and to get results, there has to be a spotlight. Issues have to affect a number of important countries and be on the surface of the policy cauldron.

For progress to occur, different issue trade-offs between countries have to be possible; there has to be some “give” in exchange of some “take”. There has been timing immediacy to move things along and to have government leaders and their bureaucracies address, analyze, understand and present changes. There needs to be an anvil focus.

The Trump tariffs open the world outlook onto a new direction: they successfully command attention from all trading partners, and they require a response instead of the typical speechwriter niceties. New thoughts on the purpose and capability of trade can lead to an active re-analysis of policy steps and agreements.

Much of today’s trade understanding has been in place since the international institutions of Bretton Woods were formed in 1944. Surely, after 74 years, policy makers, firms, their long range planners, and academics should be able to come up with some helpful changes.

All this is likely to precipitate shifts, adjustments, and re-conditioning. There will be new global actions and perhaps even entirely new paths and expectations for both international and domestic business transactions, lifestyles and relationships.

Maybe we will have more domestic vacations, experience, shorter college time, eat more white asparagus and live with more extended families. We just might wind up with new rules which make society more productive and life more pleasant.

If President Trump’s announcements and communications capture the attention of world leaders, they can astutely trigger progress and new approaches. Recognizing that a crisis of what could happen tends to clear the mind.

But after all is said and done, the benefit lies in the attention and understanding which restructures process and precipitates change. If that occurs, then the threat of tariffs is a useful means to an end. If that occurs with limited implementation, it can help make all boats rise.

Michael Czinkota teaches international business and trade at Georgetown University’s McDonough School of Business and the University of Kent. His key book (with Ilkka Ronkainen) is “International Marketing” (10th ed., CENGAGE).

The views and opinions expressed in this commentary are those of the author and do not reflect the official position of The Daily Caller.