By GREGORY ZELLER //
Over the objections of his chief economist (who quit) and virtually all U.S. trade partners (NAFTA members are spared, for now), President Donald Trump got his tariffs Thursday.
On Friday, a professor in Adelphi University’s Robert B. Willumstad School of Business warned the president is “inviting retaliation” from economic allies.
Add former Dean Rakesh Gupta, now an associate professor of Decision Sciences and Marketing at the Adelphi business school, to the long list of domestic and international critics lambasting Trump’s controversial tariffs plan, which the president executed Thursday.
Citing a bevy of bad trade deals for the United States – the North American Free Trade Agreement is among his favorite targets – the president imposed a 25 percent tariff on steel imports and a 10 percent tariff on aluminum imports, both set to take effect March 23.
Trump, who is reported to have demanded tariffs at any cost in Oval Office meetings, invoked a rarely used section of the Trade Expansion Act of 1962 to authorize two tariff proclamations. Essentially, he claimed a national security rationale for protecting domestic steel and aluminum industries, which according to the president suffer from unfair trade practices.
Mexico and Canada, U.S. partners in NAFTA, were spared by Thursday’s proclamations. But a global roster of critics has still responded, from heads of state to leading U.S. Republicans (Speaker of the Houser Paul Ryan warned of “unintended consequences”) to top Trump economic advisor Gary Cohn (who quit his White House job over the plan) – all of whom say the tariffs will do anything but strengthen U.S. security, economic or otherwise.
Among the heavier criticisms: Chinese Foreign Minister Wang Yi warned Thursday that “choosing a trade war is a mistaken prescription” and promised China would “make a justified and necessary response.” Those sentiments were backed by the China Iron and Steel Association, which noted, “Trump’s actions are a challenge to the global steel sector and must be met with even broader opposition.”
Farther east, the Japan Steel Information Center “looks forward to educating the Trump administration on the vital role the Japanese steel industry plays in the American marketplace,” according to Chairman Tadaaki Yamaguchi. To the west, Mario Draghi, president of the European Central Bank, mused, “If you put tariffs against your allies, one wonders who the enemies are.”
And Jyrki Katainen, the European Union’s vice president for jobs and competitiveness, suggested the very real possibility of a “worst-case scenario” in which the EU drags the United States before the World Trade Organization court.
Trump, who earlier this month tweeted that “trade wars are good, and easy to win,” has been undeterred by the early fallout from his tariff strategy (global markets don’t share his enthusiasm for trade wars) or the criticism (which is not quite unanimous – the proclamation signing was attended and cheered by representatives of the U.S. steel industry).
But the critics are not wrong, according to Gupta, who told Innovate LI that “a unilateral imposition of tariffs invites retaliation.”
These are familiar matters to the Willumstad School professor and former dean, who holds three bachelor’s degrees – in physics, chemistry and mathematics – from the University of Delhi, an MBA from CUNY’s Baruch College and ABD status (“all but dissertation,” a step short of a PhD) from the City University of New York.
An expert in strategic management, business ethics, management of technology and financial literacy, Gupta boasts 20 years of higher-education administration experience and a 40-year-plus teaching record, with instructional stints at Adelphi University, LIU Post and Baruch College.
After all that teaching, he’s learned a thing or two. And in his assessment, Trump’s “intemperate action … reverses years of progress towards freer world trade, which most economists agree is good for the world economy.”
Even if the president is correct about imbalances in international trade pacts resulting in unfair results for U.S. industry and markets, there are better ways to address the problem, according to Gupta.
“It seems that the Trump administration has chosen to forgo existing international mechanisms to air trade grievances,” the professor said Friday. “Those mechanisms, such as the WTO or bilateral discussions, could perhaps have led to mutually agreeable realignment of existing tariffs.”
Instead, Trump wanted and got stiff new duties on aluminum and steel imports – a decision that has quickly pushed the global economy to the brink of a dangerous trade war.
“If other countries respond with tariffs of their own, the consequences would be negative for the world economy,” Gupta said, noting the effects would be felt by “financial markets, consumers and eventually the labor markets.”