Steve Taggart

Steve Taggart

Last week’s release of the U.S. employment number for May showed a surge of 223,000 in new American jobs. That dropped the unemployment rate to 3.8 percent, the lowest in 18 years. Also, U.S. automobile sales in May demonstrated considerable strength, ticking up a bit. Wages have been slow to rise but are showing some advancement.

Since the trough of the last recession, the American economy has now grown for a record 92 consecutive months. Idaho has been one of the U.S. leaders, with lots of new construction and people are flocking to the Gem State. But two Trump announcements last week put the economy at risk and could, at worst, trigger an overdue recession. Idaho could be one of the big losers.

The first announcement imposed 25 percent and 10 percent tariffs, respectively, on steel and aluminum shipped from an array of countries, including neighboring Mexico and Canada but also U.S. allies in Europe.

The response was swift with multiple countries imposing punishing tariffs on particular American agriculture products and manufactured goods.

The sharpest response was by our ally to the north, Canada. Canadian Prime Minister Justin Trudeau announced: “We are imposing dollar for dollar tariffs for every dollar levied against Canadians by the U.S.”

He also revealed that talks between the United States, Canada and Mexico over the North American Free Trade Agreement have broken down over a demand, conveyed by Vice President Mike Pence, that any deal would have to sunset in only five years.

News reports also indicate that Trump is planning to clamp down on German automobile exports to the U.S. (despite the fact that many are built here).

This is a very, very dangerous course. And it is an odd one in that Trump is being gentle with U.S. foes but targeting our allies. Trump just overturned his Commerce Secretary’s effort to squelch Chinese telecom giant ZTE for its ties to North Korea and Iran.

Idaho is uniquely vulnerable to trade disruption. Idaho has been a big winner under NAFTA, with vastly expanded trade exports to both Canada and Mexico. Idaho agriculture, including Idaho’s large dairy industry, has heavily benefited from growing exports to both countries. Multiple Idaho industries could be sharply impacted by the blooming trade war.

Both Sen. Crapo and Sen. Risch know the risk. Both weighed in on NAFTA a bit more than a week ago in a letter that urged: “the Administration [to] employ a strategy that emphasizes collaboration, rather than conflict.”

Many other Republicans are recoiling from the Trump policies on trade. Powerful Sen. Orrin Hatch, R-Utah, stated last week: “Tariffs on steel and aluminum imports are a tax hike on Americans and will have damaging consequences for consumers, manufacturers and workers ... In light of the mounting evidence that these tariffs will harm Americans, I will continue to push the administration to change course.”

The danger is very real. The Great Depression was amplified by the trade restricting Smoot-Hawley Act. At the very least, the U.S. should not be targeting allies.

President Reagan’s words on this topic are particularly pertinent. In November of 1988, as he was leaving office, he presciently warned:

“[T]he American people have stayed true to our heritage by rejecting the siren song of protectionism. Protectionism is being used by some American politicians as a cheap form of nationalism.

Our peaceful trading partners are not our enemies; they are our allies. We should beware the demagogues who are ready to declare a trade war against our friends — weakening our economy, our national security, and the entire free world — all while cynically waving the American flag.”

Steve Taggart is an Idaho Falls attorney specializing in bankruptcy with considerable real estate experience. He was previously a political consultant and ran a congressional office in Washington, D.C. This column first appeared on