Finance

Trump Tariffs Used To Justify Pillaging Local Natural Resources, To Profit Foreign Companies

We shouldn’t be digging up natural resources to feed an artificial demand we created out of whole cloth and could do away with just as easily.

By  
on

(Image via Getty)

The Boundary Waters Wilderness area is a sprawling expanse of forests, lakes, and hundreds of miles of rivers and streams along the U.S.-Canada border in northeastern Minnesota. It is the largest remaining area of uncut forest in the eastern half of the United States, first set aside in 1926 to preserve its “primitive character.” Every year, thousands of visitors make the trek to Minnesota’s Arrowhead Region, to canoe, to observe the area’s gray wolves, black bears, and moose, and to otherwise enjoy nature in the Boundary Waters Wilderness area. More than 12,000 people are employed in outdoor recreation in the $44.5 million recreational economy flowing through the Boundary Waters. The site brings in more visitors than any other U.S. wilderness area.

Trump Administration Opening Boundary Waters Area To Mining By Chilean Company

Despite uproarious local opposition, in mid-May, the Trump Administration took a major step in opening the area up to copper-nickel mining. The Bureau of Land Management of the U.S. Department of the Interior renewed two long-shelved hardrock mineral leases inside the nearby Superior National Forest. The leases cover land alongside lakes and rivers that flow into the Boundary Waters. Copper-nickel mining can create acid mine drainage, which contaminates nearby watersheds with heavy metals.

In 2016, the Obama Administration had placed a moratorium on new mineral extraction efforts in the Boundary Waters Wilderness area while it extensively studied whether thousands of acres of the surrounding watershed should be withdrawn from availability for mining. But when Trump took office, his Administration reversed course.

The holder of the newly renewed mineral leases is Twin Metals Minnesota LLC, a deceptively local-sounding name for a subsidiary that is in fact owned by the Chilean mining conglomerate Antofagasta. Sitting on the board of the Luksic-family-controlled Antofagasta is Chilean national Andrónico Luksic. In a classic expression of the festering swamp the Trump family is cultivating in Washington, D.C., shortly after Trump was elected, Andrónico Luksic purchased a $5.5 million mansion in Washington, which he now rents to Ivanka Trump and Jared Kushner for $15,000 a month (apparently this is a good rental rate for a 7,000-square-foot home in the nation’s capital). Javanka and Luksic claim their rental arrangement is merely a meaningless coincidence.

Tariffs Helped Create Supply Constraints Being Used To Justify Domestic Mining

Sponsored

There’s a lot to say on this whole situation, and I’m probably not going to say any of it better than the people who did in the more than 39,000 public comments they submitted to the Bureau of Land Management during its Environmental Assessment review. But an interesting aspect of this is revealed in what the Interior Department’s assistant secretary Joe Balash said in his statement about the lease renewals: “Mining strategic metals in the United States is beneficial to national security, national and local economies, and job creation.”

That’s on-message. Mr. Balash offered testimony before the Senate Energy and Natural Resources Committee on S. 1317, the so-called American Mineral Security Act, in which he said a lot of similar things. Mr. Balash discussed the “critical minerals list,” a delineation of 35 commodities deemed essential “for our economy or our national security.” He said this list “forms the foundation of the full strategy” of the Administration, said the list “will be updated periodically to reflect current data on supply, demand, and concentration of production,” and basically emphasized the Trump Administration’s commitment to domestic production of commodities. He also noted that China “supplied the largest number of nonfuel mineral commodities to the United States.”

But wait a minute — with a handful of exceptions, most of the 35 minerals on the critical minerals list are now subject to the U.S. tariffs on Chinese goods. This is rather roundabout logic. Because these minerals are critical for our economy or our national security, we need to focus on mining more of them domestically (to the detriment of our environment), since we created an artificial clamp on the inexpensive supply of them we were importing from China. Hmm.

For the record, copper is not on the critical minerals list, but it is widely used in consumer goods hit by Trump’s tariffs. The reasoning being used to justify the likely poisoning of the Boundary Waters Wilderness area is remarkably similar to that being employed to develop more projects like this around the country based on the critical minerals list. We need these commodities, of course. But the Trump Administration is artificially creating supply constraints in order to encourage domestic production, local environmental consequences be damned, even when the biggest beneficiaries are foreign companies.

The (undisturbed) Boundary Waters Wilderness area, and any number of wild places like it, are natural resources in their own right. We shouldn’t be digging them up to feed an artificial demand we created out of whole cloth and could do away with just as easily. We certainly should not be doing it to profit foreign mining conglomerates, not in return for a handful of temporary mining jobs. It’s shortsighted. It’s not worth it.

Sponsored

Jonathan Wolf is a litigation associate at a midsize, full-service Minnesota firm. He also teaches as an adjunct writing professor at Mitchell Hamline School of Law, has written for a wide variety of publications, and makes it both his business and his pleasure to be financially and scientifically literate. Any views he expresses are probably pure gold, but are nonetheless solely his own and should not be attributed to any organization with which he is affiliated. He wouldn’t want to share the credit anyway. He can be reached at jon_wolf@hotmail.com.

Topics

, , ,