Peter Coy, Columnist

Trump’s Hard-Line Take on Trade Plays Into China’s Hands

U.S. steel and aluminum need help, but tariffs are a Game of Thrones approach to the problem.

March 8, 2018 at 9:01 AM UTC

Peter Coy is the economics editor for Bloomberg Businessweek and covers a wide range of economic issues. He also holds the position of senior writer. Coy joined the magazine in December 1989 as telecommunications editor, then became technology editor in October 1992 and held that position until joining the economics staff. He came to BusinessWeek from the Associated Press in New York, where he had served as a business news writer since 1985. Before that, Coy worked as a correspondent in the AP Rochester bureau. He began his career at the AP in 1980 as an editor in the Albany bureau. Prior to that, Coy was a reporter for the Waterbury (Conn.) Republican. Coy holds a BA in history from Cornell University.

Photo Illustration: 731: Photographer: Alamy; AP Photo

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This article is part of the March 12, 2018 issue of businessweek.

Gary Cohn had one of the toughest jobs in Washington: restraining an impulsive president from waging a trade war he’s been itching to fight. Now that Cohn is leaving as director of Trump’s National Economic Council, the way is clear for the president to slap hefty tariffs on steel and aluminum imports from around the world. Trump also has a freer hand to punish China for its alleged theft of intellectual property. The U.S. is weighing restrictions on Chinese investments and tariffs on a broad range of Chinese imports, people familiar with the matter told Bloomberg News on March 6.

Trump and the nationalists who have his ear, such as Commerce Secretary Wilbur Ross and trade adviser Peter Navarro, have a point. The U.S. steel and aluminum industries really have been devastated by unfair Chinese competition. China has begun closing some of its steel mills under international pressure, but its production capacity remains twice as high as it was in 2006, the year the country issued the State Council Notice Promoting Structural Adjustment for Overcapacity. The pattern with aluminum is similar.