Table Stakes - February 10th

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I’m Daniel, and welcome to Table Stakes!

Here’s a look at today’s topics:

• Trump Takes More (Tariffs)

• Kim Jong Un States A New Threat

• South Africa Gets A Wakeup Call

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Trump Takes More

_{By: Daniel Murrah, Staff Writer for Atlas}

Beginning February 10, 2025, President Donald Trump plans to declare a broad 25% tariff on imports of steel and aluminum. Made on February 9, the declaration marks a significant change in trade policy, especially impacting important U.S. trading allies Mexico and Canada. The step fits into a larger plan as Trump also intends to implement "reciprocal tariffs" later in the week, a dollar-for- dollar matching scheme aimed at nations imposing hefty taxes on American goods.

Nothing New, In Principle

This most recent revelation is strikingly similar to Trump's first-term actions, when he applied like tariffs in 2018 under Section 232 of the Trade Expansion Act of 1962. The difference now is in the more aggressive posture and wider reach, especially towards old friends. Trump had previously announced 25% tariffs on imports from Canada and Mexico earlier this month, excluding energy products, and 10% duties on Chinese goods. The administration's thinking covers several angles: national security issues, economic policy, and leverage to handle problems including fentanyl trafficking and illegal immigration.

With the government stressing the need of lowering reliance on foreign suppliers, the national security case revolves around safeguarding sectors of military and infrastructure. Economically, Trump's approach seems three-pronged: increasing American manufacturing, producing federal income, and building leverage for negotiating what his government deems fair trade accords. Including immigration and drug control into the trade policy equation marks a clear shift in conventional tariff rationale.

Economic Implications

These additional taxes are expected to have effects on world trade ties as well as the American economy. Industries mostly dependent on imported steel and aluminum— automobile manufacturing, building, and aerospace sectors—are probably going to have higher running expenses. As companies pass along the extra costs, economic analysts estimate these expenses will finally result in higher consumer prices.

Past data on Trump's earlier tariffs offers some understanding of possible results. While local production showed only a slight increase, U.S. steel imports dropped 27% between 2017 and 2019. Given the state of the world's economy right now and the larger breadth of the policies, this time the influence could be more noticeable. Mexico, contributing 12%, and Canada, which makes 25% of U.S. steel imports, are expected to enact punitive acts that would set off a domino effect of reciprocal actions possibly aggravating trade tensions.

Particularly with relation to the use of the International Emergency Economic Powers Act (IEEPA), the legal basis for these tariffs may come under pressure. Critics contend that this strategy avoids conventional trade inquiry procedures, therefore perhaps creating a troubling precedent for next trade decisions. Legal experts and trade partners both have already questioned the government's broad interpretation of national security reasons to support trade restrictions.

Future Implications

Trump's fresh adoption of tariffs as a main trade policy instrument demonstrates the constant dedication of his government to a "America First" agenda. The approach targets additional industries including electronics, pharmaceuticals, oil, gas, and copper, hence transcending steel and aluminum. Though experts caution the dangers may be higher given current global economic circumstances, this all-encompassing approach to trade protection reflects a development of Trump's first-term promises.

Pointing out possibly negative results, the economic community has mainly opposed these policies. The far higher number of steel-consuming jobs than steel-producing occupations points to the possibility for major employment losses in downstream sectors.

The reaction from around the world has also been equally negative; traditional allies see these unilateral acts as belligerent and maybe harmful to long-standing economic alliances. Though they are close trading partners, Canada and Mexico's inclusion in these policies marks a dramatic change in U.S. trade diplomacy. China's quick application of counter-tariffs in response to recent policies points to a readiness among trading partners to take retaliatory actions, thereby maybe triggering more general trade disputes.

Trump's revived tariff approach adds further complication to an already complex international trade scene as the global economy negotiates post-pandemic obstacles and geopolitical concerns. The next months will probably show whether this robust strategy meets its declared goals of safeguarding home businesses and ensuring more favorable trade conditions or whether it results in growing trade disputes and economic disturbance both locally and abroad.

Beyond the short-term financial effects, these policies might fundamentally alter world supply chains and international trade ties for years to come. The ultimate success or failure of Trump's trade strategy will probably rely on several elements as businesses and trading partners adjust to this new reality: the resilience of domestic industries, the response of international partners, and the capacity of the global economy to absorb and adjust to these major changes in trade policy.

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