Why you should care
Will making peace with the E.U. and a nice bailout appease aggrieved farmers?
When the AFL-CIO labor union coalition held its annual meeting in St. Louis in November last year, it took a visiting delegation of international labor leaders to the steel mill in nearby Granite City, Illinois. At the time, both of the mill’s blast furnaces were idle. U.S. Steel had shut them down in 2015, blaming cheap imports. “We had some trepidation about how this would go,” says Celeste Drake, a trade policy expert for the AFL-CIO. “Would this meeting and tour come off as protectionist?” Instead, it became a rallying point. Visitors from Jordan and Turkey spoke out, saying they too had been screwed over by Chinese steel dumping.
This week, President Donald Trump visited the same plant to tout the benefits of his steel and aluminum tariffs. Granite City reopened one of its blast furnaces earlier this year, and hundreds of jobs flooded back. “Thanks to our tariffs, idle factories throughout our nation are roaring back to life,” Trump said. The move earned him a rare, qualified thumbs-up from the labor movement — a stalwart of Democratic politics for generations. “It really is a problem that affects working people around the world,” Drake says of Chinese steel dumping. “None of the governments have really effectively stood up and done anything. So it’s interesting. There are complaints about how Trump has done this. But if it works — great.”
As steel wins, agriculture loses from Chinese retaliation. Farm state Republicans are at the core of a Capitol Hill revolt against Trump’s reorienting of the GOP on trade. Trump’s response on Tuesday: a one-time $12 billion farm bailout, which did not go over well. The policies are “just going to make it 1929 again,” said Sen. Ben Sasse, R-Neb. While the salty Sasse is a frequent presidential critic, even Trump-friendly Republicans saw little value in Trump creating an agriculture crisis and then throwing money at it.
So on Wednesday, Trump hosted European Commission President Jean-Claude Juncker and announced a détente in his trade war with the E.U. The U.S. would cool down the tariffs, while Europe would buy more American soybeans. Their agreement was creeping toward the Transatlantic Trade and Investment Partnership that President Barack Obama was working on — though of course we can’t call it that, because Trump loathes multilateral trade deals and anything that whiffs of his predecessor.
The pattern is familiar: Trump puts the world on edge with a radical demand or threat — in this case, a 20 percent tariff on E.U. auto imports — then backs off and claims he’s a peacemaker. So far, the strategy appears to have been more successful with Juncker than, say, Special Counsel Robert Mueller.
The president finished his week by puffing out his chest at robust new economic growth numbers. The U.S. economy is roaring, with 3 percent growth possible for the year. Gloomy market predictions when the tariffs began have not yet come to pass; the stock market is up for the year. Still, real wages for those “forgotten men and women” Trump loves to talk about remain stalled.
The boom allows Trump to negotiate from a position of strength. As the AFL-CIO’s Drake points out, getting the E.U. on his side can only help Trump push China, so he’s better off not picking fights with close allies. From Canada to attorney turned witness Michael Cohen, Trump would benefit from treating his friends a little better.