Some mental images are especially vivid. One phrase stands out in the war of words preceding the brewing U.S.-EU trade war. “Global trade is not a gunfight at the O.K. Corral,” said French finance minister Bruno Le Maire last Thursday, after President Trump imposed new tariffs on steel and aluminum.
The most famous shoot-out in the Old West has been immortalized in the 1957 film of the same name, as well as numerous other Hollywood vehicles. To my mind, none captured the sheer brutality of the firefight as well as Doc, starring Stacy Keach (who gave a captivating performance in what was an otherwise middling film). The massacre lived up to Hobbes’ view of life: nasty, brutish, and short.
We may hope the trade war with the EU and our NAFTA trading partners will likewise be brief. In March, President Trump imposed 25 percent tariffs on imported steel and 10 percent on aluminum on the grounds of national security, largely aimed at Chinese excess capacity. Last week, he extended the import taxes to the EU, Canada, and Mexico.
Le Maire pledged that the European response would be “united and firm.” The EU and Canada will place reciprocal tariffs – and then some – on U.S. imports beginning no later than July 1; Mexico already has retaliated.
“We will also impose import tariffs,” said European Commission President Jean-Claude Juncker in March. “This is basically a stupid process – the fact that we have to do this – but … we can also do stupid.”
Others have picked up Le Maire’s martial metaphor. “Guns should be pointed at enemies, not at allies,” said Obama’s ambassador to the EU, Anthony Gardner.
One of the leading arguments offered for freer trade is that lower trade barriers lessen other international tensions. Calling a truce in the trade wars decreases the chance of shooting wars. “[T]rade motives are essential to avoiding wars and sustaining stable networks,” wrote Stanford professor Matthew O. Jackson and Stephen Nei.
If nations pursue parative advantage and goods move across borders with relatively little friction, the argument goes, then nations will see one another as partners and think twice before launching a war that will cost them imports and e. “[T]he larger the trade gains, the larger the opportunity cost of a war and therefore the more useful a FTA [free trade agreement] is to secure peace,” wrote European scholars Philippe Martin,Thierry Mayer, and Mathias Thoenig in 2010.
A few have even connected trade to the most cherished rule of Christianity. Condy Raguet, a U.S. diplomat to Brazil under President John Quincy Adams, said the golden rule applies to international trade as much as to interpersonal conduct.
“It is to us one of the most prehensible things that so many persons, who profess to be advocates of religion and good will to man, should be the disciples of a philosophy which teaches that the selfish principle is paramount to the principle of neighbourly love,” he wrote.
He continued:
Now what does the restrictive philosophy teach? Why, that individuals, pursuing particular branches of industry, should consult their own interests, without any regard whatever to the interests of their neighbours; that sections or districts of country should unite together in a scheme calculated to render others tributary to them; and, carrying the principle still further out, that nations should study their own selfish interests, without regard to the interests of other nations. The consequences of such a course of conduct cannot be other than to produce private enmities and heart-burnings between those who benefit and those who suffer, as is visible, every day, to our own eyes – civil war between different sections of the same country, as we may see before another year – and foreign wars of which we have witnessed an abundance within the last half-century, growing out mercial restrictions. If it were true that the Christian religion enjoined one sort of duty from man to man, and another sort of duty from nation to nation, there might be some ground for the adoption of one rule as applicable to one case, and another rule as applicable to the other. But no distinction is made between them, and peace on earth, and good will to men, are every where inculcated.
One can hope all weapons in the trade war will be holstered soon, and the transatlantic may e pacific again.
Silvercloud. CC BY-SA 2.0.)