President Trump has stated his belief that having a strong steel industry is a National Security issue. His argument is based upon the idea of having a secure manufacturing industry and the necessary raw materials in the event of a war that would otherwise allow an enemy to shut off our supply of steel. This would make it impossible for us to build, repair or maintain military hardware. We would lose the war under those circumstances.
The broader truth is that no economy, even in peacetime, can survive without a manufacturing sector. Every economy has three basic sectors. The most essential is an agricultural sector. We have to eat and we need farmers to produce our food. The second tier of any economy is manufacturing. This sector produces everything else that we need including basics like housing. Importantly, it is the manufacturing sector that is responsible for all increases in productivity because this sector creates and produces all of the tools we use to be more productive. The third sector of the economy is the service sector. This sector includes everyone who does not directly support one of the other two sectors and includes the government. The most important thing to understand about the service sector is that it does not produce anything. The service sector requires that the economy must produce enough profits in the other two sectors to pay for the service sector.
In the context of trade wars, people in governments understand these basic concepts. Most citizens in the United States do not understand these basic relationships.
Hostile governments (China) have been using trade relationships to undermine our economy. By dumping steel at prices well below the cost of producing it, China has greatly weakened the steel industry in every other industrialized country.
The reason China can afford to do this is because we give them almost half a trillion dollars every year through our trade deficit with them. We are the enablers.
Taxing steel imports is the right thing to do. However, these taxes should be structured in a way that hurts China and not our allies. Those who call themselves our allies but who are selling us steel produced in China should not be exempt from the taxes.
China may retaliate, but it will not be like the liberals anticipate. Liberal administrations like Obama have always fallen prey to this notion that we have to have cheap goods from China for our economy to survive. The opposite is true. China needs us to buy their goods in order to execute their military ambitions.
Trump understands this and will do the right thing for America.
"Me? An Economic Expert"