Wilbur Ross has given Trump three choices on aluminum and steel imports: targeted tariffs; across-the-board tariffs; and import quotas. Option four, of course, would be to do nothing. Which will he choose?
Any of the first three options, of course, will probably start a trade war. It will drive up prices of American goods, damage our relationships with our allies, and invite retaliation, thereby costing jobs, not saving them. On the other hand, protectionism plays well with at least a large part of his base. In any battle between tribal loyalty and the national interest, you can be fairly sure that the former will prevail in this administration.
Trump has already shown that his favorite negotiating tactic is to take hostages and blame the other side when he shoots them. I would expect him to announce that import quotas will be imposed if the rest of the world doesn’t clean up its act, in his eyes, within a specified number of days. Then we will move to what I think is his end game–managed trade.