Picture: AFP
Picture: AFP

A week ago, the world breathed a sigh of relief after the end of an unexpected round of volatility that rocked equity markets.

Then came a second shock wave, this time emanating from the mouth of US president Donald Trump.

Trump proposed slapping tariffs on the import of steel and aluminium to the US in an effort to protect the domestic industry against alleged "dumping".

As Trevor Kincaid wrote for Reuters: "With the stroke of a pen, he could unravel the global trading system, raise prices on basic goods, make American businesses less competitive, drive a wedge between the US and its European allies and open the door for China to construct new national security based trade barriers."

Even for Trump, this would represent a new level of policy chaos.

It didn’t take economists long to figure out that the ban, while protecting US steel companies, would lead to higher costs being passed on to consumers and threaten more jobs than it set out to protect.

Justin Fox, author of The Myth of the Rational Market, wrote for Bloomberg: "There are many, many more US manufacturing workers who would be adversely affected by tariffs than workers who would benefit from them. Also, employment in the metal-using industries, apart from aerospace, has held up much better over the past few decades than employment in primary metals manufacturing."

Perplexing (for Americans) was that the countries that would be hardest hit would be US allies Canada, South Korea, Mexico and the EU, which were the biggest exporters of steel to the US.

China, apparently the real target of the measures, is not even among the top 10 exporters to the US.

And then there are countries such as SA which export to the US. Though a tiny portion of US imports, these are a sizeable part of the exporting countries’ economies. The maths is simple: very little trade gain for the US, generating a lot of global bad will.

Hang on a second. That line more or less sums up the Trump presidency.