With two actions yesterday, America lost its post-World-War-II position as the world’s leading advocate of free trade, and became the most prominent antagonist.
President Trump followed through on his threat to impose stiff tariffs on imported steel and aluminum, but softened the measure by temporarily sparing Canada and Mexico, and left the door open to excluding other countries for national security reasons. The tariffs will take effect in 15 days. China’s foreign minister, Wang Li, vowed a “justified and necessary response.”
Meanwhile, in Santiago, Chile, 11 U.S. allies signed the Trans-Pacific Partnership, which was once seen by the U.S. as a counterweight to China, but has now morphed into an alliance against the Trump administration’s anti-globalist rhetoric and action.
Some CEO Daily readers have taken me to task for being too tepid on this dramatic swing in the U.S. trade stance. Here’s J.G. in response to Monday’s post:
“Really disappointed you let…the president off the hook on his disastrous trade policy. From every conceivable angle—economic, foreign policy, governance—this is a low point in post-World-War-II history. It’s shameful to be even handed, or pretend to be hopeful, as you ended the piece. Better not to write about the issue at all.”
But J.C. had a different angle on the same post. His critique:
“I really enjoy your posts, and like the value you bring. But please consider that not all your readers are Democrats!”
The irony, of course, is that a free-trade view is now seen as tilting toward Democrats!
As I wrote Monday, Trump’s tweet that “trade wars are good, and easy to win” flies in the face of both economics and history. (One wonders how his alma mater, Wharton, is viewing its most prominent graduate!) But the president clearly sees everything as a negotiation, and hopes his actions will lead not to a tit-for-tat trade war, but to more favorable trade deals in the future. Like J.G., I’m skeptical. But Trump is the president, so let’s hope he’s right. He seems to be making some progress with his North Korea tactics, if that’s any indication.
I’m flying home from Singapore this morning, and will be on vacation next week. Fortune digital editor Andrew Nusca has offered to stand in. I’ll be back, rested and ready, in a week.
North Korea Talks
The diplomatic world is agog after North Korean leader Kim Jong-un invited U.S. President Donald Trump to bilateral talks, and Trump agreed. Just months ago, the two were threatening to launch nuclear attacks on each other’s countries. The timing and location of the meeting is yet to be determined. “We look forward to the denuclearization of North Korea. In the meantime, all sanctions and maximum pressure must remain,” said White House Press Secretary Sarah Sanders. CNN
Republican Tariff Pushback
Republican Senator Orrin Hatch believes the party will be able to stop Trump’s controversial steel and aluminum tariffs in Congress. House Speaker Paul Ryan is maintaining his opposition to the move, as is Senate Majority Leader Mitch McConnell, who is not placated by the temporary exemptions for Canada and Mexico. Senator Jeff Flake has introduced legislation to nullify the tariffs, and Senator Mike Lee has introduced legislation to force the president to have to go through a congressional approval process on trade issues. NBC
France’s centrist president, Emmanuel Macron, has been heading for a clash with labor unions since he was campaigning. Now, he is moving to curb the unions’ policy- and money-making powers with a plan to reform the French professional training system. Unions and business groups have controlled the system for four decades, but now Macron has angered them with a proposal to take it out of their hands. Get ready for protests on March 22. Financial Times
Fortune Brainstorm Tech
Fortune has some very big names lined up for this year’s Brainstorm Tech conference in Aspen, Colo. Uber chief Dara Khosrowshahi will be making his Fortune event debut, and rivals Lyft (president John Zimmer) and Grab (co-founder Hooi Ling Tan) will also be represented. Walmart’s U.S. digital chief Marc Lore will be there, as will Richard Liu, the founder of Chinese e-commerce giant JD.com. Former Yahoo boss Marissa Mayer will be a co-chair at the event. Fortune
Around the Water Cooler
The Bitcoin cryptocurrency is tumbling again. So far, it’s not quite as bad as the drops seen a few months ago, but Bitcoin has lost around 24% of its value in the last week. The reasons for Bitcoin’s moves are rarely entirely clear, but it may have something to do with the Securities and Exchange Commission insisting that cryptocurrency exchanges register with the agency, and/or regulatory crackdowns in Japan. CNBC
The bull market is nine years old as of today. This is the second-longest bull run in U.S. history. Since the financial crisis took the stock market to its nadir, the S&P 500 is up more than four-fold, unemployment has reached a 17-year low and global economic growth is up. There’s a case for saying the run will continue, thanks to strong corporate earnings, though—of course—many say a turning point must be coming soon. Wall Street Journal
The Obama Show(s)
Former first couple Barack and Michelle Obama are reportedly in talks with Netflix about a “production partnership” that could see them either in front of the camera or behind the scenes on a couple of shows. Barack Obama’s show would apparently see him moderate discussions about his favorite subjects, such as healthcare and immigration, while Michelle’s would cover the topics closest to her, such as nutrition. Fortune
Dozens of Iranian women have been protesting against the Islamic Republic’s rules by removing their headscarves in public squares. A heavy police presence on Thursday reportedly pre-empted planned protests on International Women’s Day, and Ayatollah Khamenei used the occasion to attack Western countries for “deviant lifestyles” that he said are best warded off with a hijab. But some women have been nonetheless protesting by taking off the headscarf and brandishing it, sometimes leading to arrests and harassment. Washington Post