[Annotated] The Trump administration imposes tariffs on America's closest allies

This will leave everyone poorer

President Donald Trump is about to find out how easy trade wars are to win. In the name of America's national security, on May 31st he announced tariffs on steel and aluminum from Canada, Mexico and the European Union. From midnight that same day, trade flows worth $23bn in 2017 faced duties of up to 25%.

Tariffs are a tax. These ones are supposed to hand market power to^[각주:1] America metal producers^[각주:2], allowing them to raise prices. In that respect^[각주:3], so far they seem to be succeeding. Over recent months, premiums for American steel and aluminium over metal bought in Europe or Asia have surged. But in this case, help for one industry harms others. Business lobby-groups from the American Beer Institute to the American Petroleum Institute, whose members use aluminium and steel, respectively^[각주:4], have lined up to denounce the tariffs^[각주:5]. Even the United Steelworkers Union (USW), previously supportive of^[각주:6] trade restrictions^[각주:7], has criticized the action. (In North America some unions as well as many supply chains are^[각주:8] integrated; the USW has members in both Canada and the United States.)

Although the tariffs will be a blow to^[각주:9] steel- and aluminium- consuming industries, their direct effect on America's economy will not be large. Goldman Sachs, a bank, estimates that the latest round of tariffs could boost one measure of inflation by 0.01 percentage points. But the retaliation is^[각주:10] likely to sting^[각주:11]. The EU has been preparing for retaliation for months. And on the day of the Trump administration's announcement, Canada and Mexico each published tariff lists detailing plans to hit^[각주:12] American exports of steel, aluminium, sausages, pizza and whiskey, among other things. Chrystia Freeland, Canada's minister for foreign affairs, pointed out that proposed duties on C$16.6bn ($12.8bn) of American exports (4.5% of the bilateral total) would constitute^[각주:13] the largest trade measure^[각주:14] the Canadians had undertaken since^[각주:15] the second world war. 

The indirect effects of the tariffs are likely to have a bigger impact. Under Mr Trump, American trade policy has become highly uncertain, as he demonstrates to the world that he is willing to inflict harm on his own supporters to^[각주:16] get his way^[각주:17]. The American market is big, perhaps big enough for a policy of intimidation to^[각주:18] work in persuading companies to make things closer to their consumers. But though this might seem to serve the president's agenda of protecting and repatriating manufacturing jobs^[각주:19], scaring companies away from global supply chains will leave America poorer in the long run^[각주:20]. 

Beyond steel, the bigger question is what the metal tariffs mean for^[각주:21] the North American Free-Trade Agreement (NAFTA), which links America, Canada and Mexico together for production of many goods, and which Mr Trump is seeking to renegotiate^[각주:22]. Neither Canada nor Mexico has walked away yet, at least. (Indeed, the Canadians are boldly planning to^[각주:23] use the original deal to launch an official dispute^[각주:24].) But talks are in a hiatus^[각주:25]. On May 31st Justin Trudeau, Canada's prime minister, spoke of his offer to meet Mr Trump to resolve their differences^[각주:26] and finalize a NAFTA deal^[각주:27]. But after he was told that a precondition for the meeting was that^[각주:28] the Canadians accept a five-year sunset clause for^[각주:29] NAFTA, he refused. Then came the tariffs. 

Mr Trump may think tariffs on steel and aluminium will make his trade counterparts more likely to agree a new NAFTA deal. If so, he is playing a dangerous game. Mr Trudeau must think of his own political standing^[각주:30]. And Mexico is in the middle of an election campaign, where looking tough against the yanquis^[각주:31] plays well. In frustration, Mr Trump may decide to escalate the situation^[각주:32]. On May 31st he said, "The United States will agree to a fair deal, or there will be no deal at all." But if he were to pull America out of^[각주:33] NAFTA he would face a huge domestic backlash^[각주:34], opening up yet another front in his war on free trade. 

So far, it looks as though America's trading partners are at least trying to preserve the rules-based trading order. Both the EU and Canada are planning tariff retaliation on the basis that America's actions are a "safeguard" action^[각주:35]; in such cases the rules allow for^[각주:36] near-immediate compensation. America, however, claims its tariffs are in the name of national security and that retaliation is therefore unjustified. So there is a risk that it may retaliate in turn^[각주:37]. 

As talk of tariffs on America's imports escalated over the past few months - from $50bn of steel and aluminium, to $150bn on goods from China, to $350bn of American car and car parts imports - observers could be forgiven for assuming that calmer heads would eventually prevail. Some became inured to^[각주:38] the Trump administration's repeated threats and reversals, and therefore complacent^[각주:39]. This latest action on steel and aluminium could be a gambit to show that^[각주:40] Mr Trump is not bluffing when^[각주:41] he threatens to erect trade barriers^[각주:42]. His opponents will be hoping that this is the action that convinces him of the high cost of doing so. 

1. hand ; 1. 직접 건네주다, 넘겨주다; 인도(引渡)하다(deliver); (선물·보수로서) 보내다, 주다(give) ((to)); <음식이 담긴 접시 등을> 집어 주다, 돌리다(pass); <편지 등을> 보내다(send); <타격·놀라움 등을> 주다; [구어] <쓸데없는 일을> 전하다; 거뜬히 건네다 [본문으로]
2. producer ; 1. 생산자, 생산 회사[국가] ;; 참고 ; consumer [본문으로]
3. in that respect ; 그 점에 있어서 ;; …이라는 것을 생각할 때, …을 고려해서, …이라는 사실 때문에, …이므로 [본문으로]
4. respectively ; [보통 문장 끝에 둠] 각각, 저마다, 제각기, 각자 [본문으로]
5. denounce ; [vn], (참고: denunciation) 1. ~ sb/sth (as sth) 맹렬히 비난하다 ;; 2. ~ sb (as sth) (불법적인 정치 활동에 대해) 고발하다 [본문으로]
6. be supportive of ; ~을 지원하다, 지지하다 [본문으로]
7. trade restrictions ; 무역 제한, 무역 장벽 [본문으로]
8. supply chain ; [주로 단수로] (상업) (상품의) 연쇄적인 생산 및 공급 과정 ;; 공급망 ((제품이 공급자에서 생산자·도매업자·소매 상인·소비자에게 이동되는 일련의 과정)) [본문으로]
9. blow ; 2. ~ (to sb/sth) (슬픔・절망을 가져온) 충격 ;; 참고 ; body blow [본문으로]
10. retaliation ; [U] ~ (against sb/sth) (for sth) 보복, 앙갚음 [본문으로]
11. sting ; [자동사] 4. 괴롭히다, (정신적인) 고통을 주다; 괴로워하다, 짜증내다. [본문으로]
12. detail ; 1. GIVE FACTS/INFORMATION | [타동사][VN] 상세히 알리다[열거하다] [본문으로]
13. constitute ; 2. 제정하다, 설립[설치]하다 [본문으로]
14. measure ; 1. OFFICIAL ACTION | [C] ~ (to do sth) (특정 목적을 달성하기 위한) 조치[정책] ;; 참고 ; half measures [본문으로]
15. undertake ; (-took[-túk]; -tak·en[-téikən]) 1. <일·책임 등을> 맡다, 떠맡다, 책임 맡다 ;; 2. 착수하다, 시작하다; 기도하다 [본문으로]
16. inflict harm on ; ~에 해를 끼치다, 가하다 [본문으로]
17. get[have, be] one's (own) way ;; 바라던 것을 얻다, 마음대로 하다 ;; 생각대로 하다, 제멋대로 하다, 자기 길을 가다 [본문으로]
18. intimidation ; [명사] 협박, 위협 [본문으로]
19. repatriate ; 〔포로·망명자 등〕을 본국으로 송환하다, 귀환시키다; 〔이익·자산 따위〕를 본국으로 보내다. ;; 미국식 [|ri:|peɪtrieɪt] 영국식 [|ri:|pӕtrieɪt] [본문으로]
20. in the long run ; (앞으로 길게 보았을 때) 결국에는, 오래 달려간 끝에, 장기적으로는 [본문으로]
21. mean for ; …을 위해 계획하다, 꾀하다. [본문으로]
22. renegotiate ; [타동사, 자동사] 재교섭하다; <계약·조약 등을> 재조정하다 [본문으로]
23. boldly ; [부사] 대담하게; 뻔뻔스럽게; 뚜렷이 [본문으로]
24. launch ; 3. (기업 등을) 시작하다, 착수하다, 일으키다(set going) ; (공격 등을) 개시하다(begin, start). ;; 5. (비난 등을) 퍼붓다(utter with force). [본문으로]
25. hiatus ; [sing.], (격식) 1. (행동의) 중단 ;; 2. (특히 말이나 글에서 무엇인가가 빠진) 틈[사이] ;; 미국∙영국 [haɪ|eɪtəs] [본문으로]
26. resolve ; (격식) 1. [타동사][VN] (문제 등을) 해결하다 ;; 3. (위원회・회의 등에서) 의결[결의(決議)]하다 [본문으로]
27. finalize ; [타동사][VN] 마무리짓다, 완결하다 [본문으로]
28. precondition ; [명사] ~ (for/of sth) 전제 조건 [본문으로]
29. sunset clause ; (시사) <사회>일몰조항 ;; [NOUN] a provision of a law that it will automatically be terminated after a fixed period unless it is extended by law [본문으로]
30. standing ; 1. [UC/] (훌륭한) 신분, 지위; 격식; 명성, 명망 [본문으로]
31. Yankee ; 1. (美) 양키(미국 북부, 특히 뉴잉글랜드 지방 사람) ;; 3. (英 비격식) ; 동의어 Yank ;; (英 비격식 흔히 못마땅함) 미국인(약간 낮잡아 이르는 말) [본문으로]
32. escalate ; ~ (sth) (into sth) 확대[증가/악화]되다[시키다] ;; escalate the situation ; 상황을 크게만들다, 일이 크게 번지다, 상황을 악화시키다 [본문으로]
33. pull (sth) out of ; ~에서 철수하다 [본문으로]
34. backlash ; [sing.] ~ (against sth) | ~ (from sb) (사회 변화 등에 대한 대중의) 반발 [본문으로]
35. safeguard ; 5. 보호 조항[규약]; [경제] 긴급 수입 제한 조처 [본문으로]
36. allow for ; ~을 감안하다[참작하다] ;; to include something when you are calculating something or planning something [본문으로]
37. in turn ; 1. 차례차례 ;; 2. 결국[결과적으로] [본문으로]
38. inure ; [타동사] [수동형·재귀용법으로] …을 (…하도록) 단련하다[to do]; (어려움 따위에) 익숙하게 하다[to]. [본문으로]
39. complacent ; [형용사] ~ (about sb/sth) (보통 못마땅함) 현실에 안주하는, 자기만족적인 [본문으로]
40. gambit ; 1. (대화 등의 초반에 우세를 확보하기 위한) 수[말/행동] ;; 2. (장기・바둑의) 초판 수 [본문으로]
41. bluff ; 허세를 부리다, 엄포를 놓다 [본문으로]
42. trade barrier ; 무역 장벽 [본문으로]