Could there be some far-sighted political justification for President Donald Trump’s proposed steel and aluminium tariffs? Could it be that whatever immediate economic harm the measures will do, they could serve to boost the credibility of the overall trading system and Americans’ faith in it? The obvious answer, “No”, is the correct one. But it may be worth looking at how similar actions have been used in less-than-catastrophic ways in the past.
The ostensible economic justification for trade defence instruments is usually to counter unfair actions by foreign exporters or by governments, or to prevent disruptions to markets by cushioning domestic producers from the immediate shock of a sudden flood of imports. (The justification for the Trump tariffs is national security, which is transparently bogus.)
However, their often unspoken function is as a political pressure relief valve, to give companies and workers the impression that even binding international agreements can be mitigated in the light of pressing circumstance. Thus, so the argument goes, they can help keep markets open by furthering political legitimacy for the system.