Tariffs and the War on Terrorism

Tariffs and the War on Terrorism

In March 2002, the Administration of the President of the United States under George W. Bush placed a rigorous tariff on imported steel. The United States uses the protective tariffs important for two reasons, according to a press release by the Administration1. One reason is to expand the domestic economy that has, according to some experts been in a “slump” or “retraction” since spring 2001. (It was even more “aggravated” by the events of September 11) Second, to protect important-Union based steelworker jobs in the United States. The steelworker jobs are key to the “National Security of the United States”2, according to the Bush Administration. Despite Federal Reserve Chairman of the Board, Alan Greenspan, stating later in the month that the US economy was “well under way into expansion”3, the Bush Administration saw an absolute need to put into action the tariffs. The steel tariffs are going to largely affect many nations that are supporting the US in the “War against Terrorism”, as well as the US relations in these nations. By taking into account historical occurrences, expert analysis based on economics, and scholarly study it can be concluded that these tariffs have the potential to encompass diverse effects on the US and the alliance it has in the “War against Terrorism”.

History has witnessed tariffs to have varied affects on the events that are associated with conflicts and wars. Tariffs are designed to “protect domestically made products and for the state that uses them to collect specific commodities” 4. M.J Daunton, in a The English Historical Review article5, points to the conflict amongst the European alliances and the reasons for the First World War being indirectly based on tariffs. The pre-First World War alliances were based on both security and industrial purposes. When the alliance that was set up amongst the Central Powers of Germany, Austria-Hungary and the Ottoman Empire, it was largely because of the resources of production and the agreements that were arranged between corporations and industries in the countries. Germany, for example, had a highly advanced steel industry and used many resources that came from the Austrian-Hungarian Empire as well as the Asian-Mediterranean Ottoman Empire. Rivaled by the British and the France to their west, these countries saw “open-trade” with these competing countries as being harmful to their domestic economies and industries.