Experts indicated that tariffs and trade wars are costly for regional and global stability
On April 10, THO hosted a teleconference on “The Trump Administration’s Tariffs on Steel Imports: What’s Next for U.S.-Turkey Trade Relations.”
The teleconference was moderated by THO Executive Director Yenal Kucuker and featured the following speakers:
Kerem Cakir – Spokesperson for the Turkish Steel Exporters Association
Dr. Gary Clyde Hufbauer – Nonresident Senior Fellow at the Peterson Institute for International Economics
What President Trump’s tariffs mean for the U.S. economy
The teleconference began with Dr. Gary Hufbauer’s explanation of the Trump administration’s steel tariffs and the expected impact that they will have for both the U.S. economy and the average American consumer. Dr. Hufbauer explained that one of President Trump’s stated purposes for the tariffs is to protect national security; however, Dr. Hufbauer noted that in actuality, President Trump expects these tariffs to raise steel prices and establish a stronger base in steel producing states. Dr. Hufbauer explained that the tariffs would lead to higher prices paid for by consumers, along with helping the protected steel industry at the expense of the American economy. Commenting on President Trump’s plan for job creation through these tariffs, Dr. Hufbauer stated, “These are very costly job-producing policies.”
A trade war with China: Its impact on regional and global stability
Dr. Hufbauer indicated that President Trump’s adversarial position toward China and his willingness to start a trade war would be costly for both the American and Chinese publics. Dr. Hufbauer warned that American consumers will pay higher prices during a trade war. He stated his belief that trade negotiations will prevail, but he also denounced President Trump’s tariffs plan, stating that “the U.S. has benefited tremendously from increased trade with China over the last 20 years.”
The impact of the tariffs on the U.S. trade deficit
According to the Congressional Budget Office’s most recent report, the U.S. budget deficit is expected to top $1 trillion in 2020 despite healthy economic growth. Dr. Hufbauer stated his belief that the tariffs will raise the U.S. trade deficit considerably. He further explained that it is unusual for such a healthy economy to have this high of a budget deficit, and that this current state cannot be blamed on previous administrations or the unfairness of global markets.
U.S.-Turkey trade relations: How will they be affected?
Yenal Kucuker underlined that Turkey is the world’s 8th-largest steel producer and 10th-largest exporter of steel to the U.S., setting the stage for the threat of a negative impact on U.S.-Turkey trade from President Trump’s steel tariffs. Kerem Cakir explained that there was a sense of heartbreak in Turkey when the tariffs were revealed given the normally close relationship between the U.S. and Turkey. He noted that the tariffs came as a shock to the Turkish steel industry.
Cakir tied the U.S.-Turkey trade dispute to the current security dispute between both countries, explaining that the NATO alliance carries over into trade as well. He defined the U.S.-Turkey relationship as closely aligned on both security and economic issues. Cakir made clear that of the 126 complaints filed against the U.S. through the World Trade Organization (WTO), only one was from Turkey. Furthermore, Cakir noted that Trump's isolationist policies would undermine American interests, stating, “America can be first, but it cannot be alone.”
Kucuker mentioned that President Trump’s decision to bypass the WTO in order to impose these tariffs angered G20 economies, causing them to appeal to the WTO. Dr. Hufbauer explained that thanks to the Trump administration’s actions, the WTO “is on the bench, not playing field.”
Kucuker stated that the Trump administration’s tariffs are causing concern that the European economies will edge closer to China. However, Cakir expressed his belief that this will not be the case for Turkey. He noted that Turkey’s automotive industry is currently strong and that Turkey is not dependent on exports.