USA starts a trade war with allies

[ksako8]

Apparently steel and aluminum from The Netherlands are a threat to US national security?

[Jeff Kuta]

"Trade wars are good, and easy to win."

- Republican POTUS

[Randomizer]

Trump isn't building as much and doesn't need that cheap Chinese steel he used to buy.

[Jeff Kuta]

Tax returns, please.

[eturnage]

The USG is one of the few in the world that taxes the income of Citizens even when that income is earned in a foreign nation. Totally AFU, IMO. You have to give up US Citizenship to avoid the federal taxes. The USG also makes it very hard for a citizen to obtain an overseas banking account. Most banks will not open an account for a US Citizen because of the USG policies of disclosure and regulation that we impose unilaterally on the rest of the world. In short, the USG sucks.

[Condescension]

As a US/Canadian dual citizen... yes, this fucking sucks.

[Randomizer]

The USG allows for the deduction of taxes paid in foreign countries on income earned in those countries. So that's not totally true about taxing foreign income.

[CroakandDagger]

Even if it were true, it'd be a reasonable measure to stop people abusing dual citizenship tax loopholes.

[peterlund]

Well we in the EU will retaliate soon enough with counter measures. See how well it goes then for Ronald McDonald and his lunitic regime. So how many more American jobs this will create. Good luck I guess is in place.

[Incrementalist]

Trump for some unfathomable reason deployed this at least a year too early, but it could be an effective re-election strategy, if he makes it that far.

It steals some thunder from left-leaning Democrats who might conceivably propose the same sort of thing, and although most genuine Republicans are against it, what are they going to do, vote Democratic next time? The only way that Republicans might conceivably bolt is if the Democrats ran another committed neoliberal in 2020, which is unlikely considering how that played out in 2016.

[ksako8]

It can become very ugly. The EU and China will retaliate and then it could scalate fast.

[Ogion]

how is it a loophole? If a Canadian and an American earn income in France, say, they both pay French taxes, but the American ALSO pays taxes on what ever is left over. Naturally, anyone hiring foreign nationals to do work (say, any third world country wanting foreign expertise) would not hire an American because htey cost more.

[Octavious]

Does the EU export much steel to the US? And if so who in the US is choosing to buy expensive foreign steel over cheap foreign steel?

It strikes me that these are the opening plays in long-term negotiations rather than a trade war. Parking your trade gunboat in the port whilst your negotiation team gets ready for a chat. And the US trade gunboat is rather more impressive than its rivals.

[Incrementalist]

"ut the American ALSO pays taxes on what ever is left over."

Is there anything left over after the French collect their taxes? I would assume that the US has a lower income tax rate, so after the foreign taxes paid to France are deducted, there isn't anything owed to the US.

Someone has to know this concretely though, anyone?

"Naturally, anyone hiring foreign nationals to do work (say, any third world country wanting foreign expertise) would not hire an American because htey [sic] cost more."

In reality more than zero Americans work abroad, so this is not the case.

[Incrementalist]

Sorry, I didn't mean to boldface that.

[Wusti]

Trump is an idiot - the sooner you Americans quietly shunt him off to the retirement village the better for everyone. Trade Wars, for a trading nation are about as stupid as you can get.

[Foxcastle]

It strikes me that these are the opening plays in long-term negotiations rather than a trade war. Parking your trade gunboat in the port whilst your negotiation team gets ready for a chat. And the US trade gunboat is rather more impressive than its rivals.

Except trade negotiations are long, drawn out, tedious, technical, bureaucratic arguments. So you can't negotiate trade like you can negotiate other international situations, where the president can make big threats to get everyone to the table. The thing that makes this a trade war is that the best response to this action from other countries is a trade war.

Also there are unique threats to the WTO with how Trump is doing this, either of which lead to chaos... These tariffs would normally be illegal under WTO rules, but there's an exception for national security, which Trump is invoking on some pretty thin pretexts. Which means that another country can sue the US under WTO rules. If the US prevails, other nations simply invoke the same clause for their own tariffs, effectively gutting the WTO and unleashing a flurry of protectionism and retaliation. If they US loses, do you think Trump backs down? I doubt it, and so the WTO falls apart because if the US won't abide, then why should anyone else, unleashing a flurry of protectionism and retaliation.

That could take years, though, for that case to be resolved. So it's better for other countries to just retaliate, either with legal provisions under existing rules, or with illegal countertariffs that also won't be resolved for years.

[TrPrado]

Trade wars always mean higher prices and therefore always hurt consumers.

[Condescension]

The best way to negotiate is to establish relationships so both sides don't defect in cooperation dilemmas. Ethics 101. This race-to-the-bottom shit is only conceivably profitable in the short term and leads to lower net benefit overall.

[ksako8]

@Octavious: the EU sells mostly specialized steel to the US. Some of it is not even made in the US. Hence trade.