International Economics: IB Economics

The US looks set to increase tariffs on the imports of certain Chinese metals, notably aluminium and steel. It seems as though popular political sentiment will trump economic sense, as it invariably does. 

Another example of why trade wars are so damaging: in this case, it's the US and Canada at loggerheads. 

The Americans imposed a10% tariff on Canadian aluminium - note, not aluminum - and the Canadians have matched this, imposing $3.6bn tariffs on American products.

So who gains? The relative price of Canadian aluminium has risen, and as Canada's Deputy Prime Minister points out, this will affect every American who buys canned beverages, consumer appliances, bikes and cars. But at least the 30,000 or so aluminium workers will be protected.

It just doesn't stake up - perhaps the President hopes that the average American's grasp of economics is about as economically literate as he is.

And here comes the EU retaliation against the US tariffs on steel and aluminium. Starting in July, on a High Street near you.

The Guardian on the prospect of a trade war between seeming allies - proof that the President appears to be keeping his friends close and his enemies even closer. 

Or that he does what he's told by President Putin.

Oh for certainty as regards trade policy.

Unfortunately, it seems that this isn't what we're going to get from US trade policy on steel and aluminium.

And it seems that US trade policy has become a little bit more pragmatic, in that proposed tariffs on Canadian aluminium have been dropped, in the light of evidence suggesting that the level of imports didn't represent much of a threat to US aluminium smelters.

Excellent BBC summary of the whys and wherefores of the EU retaliation to US tariffs on steel and aluminium, highlighting the delicate nature of the proposed protectionism.

I'd make this briefer. 

What you need to know? That it's economic lunacy. End.

Once again, President Trump's copy of "How to Win Friends and Influence People" remains unthumbed. The US is introducing tariffs on the steel and aluminium of its allies - the EU, Canada and Mexico. 

They have vowed to retaliate. Good news all round!