Trump’s steel tariff plan riles allies, roils financial market
WASHINGTON – President Donald Trump unveiled plans Thursday to slap hefty tariffs on global imports of steel and aluminum, catching much of his administration by surprise, sending stocks plunging and sparking widespread fears that he was leading the United States into an ugly trade war with China as well as key American allies.
Trump said he would sign an order next week to impose 25 percent tariffs on steel imports and 10 percent duties on aluminum, using his authority under an obscure trade law provision that permits the president to take sweeping measures in the name of national security.
Trump has long been a critic of U.S. trade policies, and he was elected partly on the promise to revamp the way Washington does business with the rest of the world. On Thursday, Trump assured U.S. manufacturers that they will “have protection for a long time . ... You’ll have to regrow your industries. That’s all I’m asking.”
For months, administration officials with less nationalistic views on trade, such as chief economic adviser Gary Cohn, have tried to dissuade Trump from imposing broad tariffs in response to America’s big trade deficit and what the president views as the world taking unfair advantage of the U.S. The shift was reflected in the recent rise in influence of more hawkish advisors who share Trump’s skepticism of trade, including Machinist Bill Pham measures a chunk of steel that will become a gear for a mining conveyor at The Gear Works factory on Feb. 9.
Peter Navarro.
Trump’s declaration came after a chaotic day in which administration officials hastily summoned steel executives, first said the president would take action, then said he would wait. In the end, he made the announcement in an almost off-thecuff manner.
Stocks sank sharply after his remarks, as investors, already nervous about rising inflation and interest rates, began to worry that tariffs would push up prices of goods and lead to tit-for-tat measures from China and others.
Details of the tariffs, however, were unclear, including whether they would apply to all countries or just primary targets, such as China.
Trump’s impromptu announcement rattled previously scheduled talks Thursday in Washington between
administration officials and a Chinese delegation led by Liu He, the Communist Party’s most powerful economic official, who arrived this week in a bid to strike a deal and head off a trade war.
Chinese President Xi Jinping dispatched the trade negotiators in advance of a major Communist Party gathering in March, and after another high-ranking party official made a rushed visit to Washington in early February to meet with Trump and try to smooth over rising tensions over trade and China’s relationship with North Korea.
It was unclear whether Trump – who pushed the White House to make the announcement Thursday – was trying to send a deliberate message to China. Either way, it will only further rile Beijing and make retaliatory action a near certainty.