This article appeared in the March 02, 2018 edition of the Monitor Daily.


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The moral question behind Trump’s plan on metal tariffs

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In proposing high tariffs on imports of steel and aluminum, President Trump cites several reasons (political, economic, and security) but one in particular – reciprocity in trade – might open a door for negotiations with opponents. Mr. Trump believes the tariffs will restore some reciprocity in trade relations. He cites “cheating” by China and other nations accused of selling steel abroad at below the cost of making it. He also cites past trade agreements that allow countries to block competition from American companies. Trump is hardly alone in demanding reciprocity. Humans have a deep desire for reciprocity in all relationships. It underlies notions of justice, equality, and the social contract. In trade agreements between nations, reciprocity is the moral foundation that helps decide how to reward each country’s abilities to produce goods and services. In demanding a new norm of fairness in trade, Trump is expressing a moral value. The probable practical effects of his proposal should be disputed. But the starting point of any negotiations needs to be a broader understanding of the intrinsic value of reciprocity. Commercial trade is not a zero-sum game in which some lose, some win. It is as much a social contract as an economic deal.

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The moral question behind Trump’s plan on metal tariffs

In proposing high tariffs on imports of steel and aluminum, President Trump has cited three reasons for his trade protectionism. One is political: It would fulfill a campaign promise to bring back metal-factory jobs. Another is economic: It would revive a lost piece of the total economy in the Rust Belt. A third is strategic: It would help retain a material supply for national defense.

All three reasons are widely disputed by many experts, including some in his own administration. More jobs will be lost than gained, they say. Metalmaking is not as vital to the economy as in the past. And, they add, such an arbitrary rule would damage national security by offending both allies and adversaries as well as ignite a global trade war.

So far, none of the arguments have turned Mr. Trump away from his plan. In fact, he responded by saying he welcomes a trade war because it would be “easy to win.” He threatened more import tariffs against any country that imposes a duty on United States goods or services.

Yet the president also offered a fourth reason for his proposal, one that might open a door for negotiations and a way to find common ground.

By his own moral sense, Trump believes the tariffs will restore some reciprocity in trade relations. He cites “cheating” by China and other nations that are accused of selling steel abroad below the cost of making it and of stealing key technologies. He also cites past trade agreements that allow countries to effectively block competition from American companies.

Trump is hardly alone in demanding reciprocity. “We are committed to free trade, but it must be reciprocal,” says German Chancellor Angela Merkel. Britain is in the throes of negotiations with the European Union over its trade relations as it prepares to exit the EU.

People have a deep desire for reciprocity in all relationships. It underlies notions of justice, equality, and the social contract. In trade agreements between nations, reciprocity is the moral foundation that helps determine how to reward each country’s abilities to produce goods and services. A society, wrote Plato in The Republic, “will be more abundant and the products more easily produced and of better quality if each does the work nature has equipped him to do....”

In demanding a new norm of fairness in trade, Trump is expressing a moral value as well as his economic, political, and strategic justifications for the tariffs. The probable practical effects of his proposal should be disputed. But the starting point of any negotiation needs to be a broader understanding of the intrinsic value of reciprocity.

Such a discussion goes beyond defining tit-for-tat fairness. It involves the greater good available when all sides accept reciprocity as a moral foundation, one that requires each side to acknowledge the other’s interests. Commercial trade is not always a zero-sum game in which some lose, some win. It is as much a social contract as an economic deal. At the least, the president deserves a hearing on his moral concern.

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This article appeared in the March 02, 2018 edition of the Monitor Daily.

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