Northwest Arkansas Democrat-Gazette
Trump faces backlash over import tariffs
He calls trade wars ‘good,’ but criticism of plan grows
WASHINGTON — President Donald Trump on Friday insisted that “trade wars are good, and easy to win,” a claim that prompted threats of retaliation against U.S. exports such as bluejeans and motorcycles.
“Make no mistake: If the president goes through with this, it will kill American jobs — that’s what every trade war ultimately does,” said Sen. Ben Sasse, R-Neb.
Trump has long railed against what he deems unfair trade practices by China and others. This week, he summoned steel and aluminum executives to the White House and declared he would levy penalties of 25 percent on imported steel and 10 percent on aluminum imports. The tariffs, he said, would remain for “a long period of time,” but it was not immediately clear if certain trading partners would be exempt.
That’s good for U.S. manufacturers. But it’s bad for companies that use the metals, and it prompted red flags from industries ranging from tool and die makers to beer distributors to manufacturers of air conditioners. The American International Automobile Dealers Association warned it would drive prices up “substantially.”
Markets tumbled in Asia, where China already had expressed a “grave concern” about U.S. trade policy. And the European Union
promised retaliation against American exports if Trump follows through. In the United States, the S&P 500 dropped as much as 1.1 percent before paring its decline.
“None of this is reasonable, but reason is a sentiment that’s very unevenly distributed in the world,” said Jean-Claude Juncker, president of the EU’s executive body.
Asked if a trade war is brewing, he said: “I can’t see how this isn’t part of warlike behavior.”
Early Friday, Trump took to Twitter to defend himself: “When a country (USA) is losing many billions of dollars on trade with virtually every country it does business with, trade wars are good, and easy to win. Example, when we are down $100 billion with a certain country and they get cute, don’t trade anymore-we win big. It’s easy!”
He later tweeted: “Our steel industry is in bad shape. IF YOU DON’T HAVE STEEL, YOU DON’T HAVE A COUNTRY!”
Sasse echoed a sentiment of many U.S. lawmakers when he issued a statement in response: “Kooky 18th century protectionism will jack up prices on American families.”
“This is going to have fallout on our downstream suppliers, particularly in the automotive, machinery and aircraft sectors,” said Wendy Cutler, a former U.S. trade official who is now vice president of the Asia Society Policy Institute. “What benefits one industry can hurt another. What saves one job can jeopardize another.”
Steel-consuming companies said steel tariffs imposed in 2002 by President George W. Bush ended up wiping out 200,000 U.S. jobs.
Commerce Secretary Wilbur Ross went on CNBC to dismiss as overblown any fears that steel-consuming companies stand to suffer in any meaningful way.
“It’s trivial,” Ross said. The commerce secretary argued that the tariffs would add only about $175 to the cost of a $35,000 car — one-half of 1 percent.
The official response in China, the world’s largest steel producer and the main target of the tariffs, was muted. Foreign Ministry spokesman Hua Chunying said in Beijing on Friday that China urges the U.S. to follow trade rules.
Industry insiders were less restrained. The U.S. measures “overturn the international trade order,” Wen Xianjun, vice chairman of the China Nonferrous Metals Industry Association, said in a statement. “Other countries, including China, will take relevant retaliatory measures.”
Li Xinchuang, vice chairman of the China Iron and Steel Association, called the move “stupid.”
China has already begun an investigation into U.S. imports of sorghum and is studying whether to restrict shipments of U.S. soybeans. While China accounts for just a fraction of U.S. imports of the metals, it’s accused of flooding the global market and dragging down prices.
U.S. allies, seeing their industries threatened, responded with bafflement and dismay. Some also panned the idea that metal imports pose a threat to national security.
“Steel and aluminum imports from Japan, which is an ally, do not affect U.S. national security at all,” Japan’s Trade Minister Hiroshige Seko told reporters Friday in Tokyoy. “I would like to convey that to the U.S. when I have an opportunity.”
Trump’s tariffs “would by themselves have only a small macroeconomic impact,” said Mark Zandi, the chief economist at Moody’s Analytics and a vocal critic of Trump’s trade agenda during the 2016 presidential campaign. Zandi said they were likely to add not quite 0.1 percentage point to inflation, which is currently hovering just under 2 percent, and to reduce economic growth by only a few hundredths of a percentage point.
The decision had been strenuously debated within the White House, with top officials such as economic adviser Gary Cohn and Defense Secretary James Mattis raising concerns.
The tariffs were pushed by Ross and White House trade adviser Peter Navarro, an economist who has favored taking aggressive action.
Mattis, in a memo to the Commerce Department, said U.S. military requirements for steel and aluminum represent about 3 percent of U.S. production and that the department was “concerned about the negative impact on our key allies” of any tariffs. He added that targeted tariffs would be preferable to global quotas or tariffs.
Plans for Trump to make an announcement were thrown into doubt for a time because of the internal divisions. The actual event caught some top White House officials off guard and left aides scrambling for details. Key Senate offices also did not receive advance notice.
Sasse wasn’t the only Republican in Congress who was upset.
Sen. Pat Roberts, R-Kan., chairman of the Senate Agriculture Committee, said, “Every time you do this, you get a retaliation and agriculture is the No. 1 target.” House Speaker Paul Ryan, R-Wis., said through a spokesman that he hoped Trump would “consider the unintended consequences of this idea and look at other approaches before moving forward.”
Trump met with more than a dozen executives, including representatives from U.S. Steel Corp., Arcelor Mittal, Nucor, JW Aluminum and Century Aluminum. The industry leaders urged Trump to act, saying they had been unfairly hurt by a glut of imports.
“We are not protectionist. We want a level playing field,” said Dave Burritt, president and chief executive officer at U.S. Steel.
Trump’s billionaire friend Carl Icahn dumped $31.3 million in steel-related stock days before the White House announced his intentions with the tariffs.
In a recent Securities and Exchange Commission filing, Icahn disclosed that he sold off nearly 1 million shares of Manitowoc Co. Inc., a Wisconsin-based global crane manufacturer.
The liberal-leaning Think Progress policy website first reported on the filing Friday.
Information for this article was contributed by Ken Thomas, Paul Wiseman, Lolita C. Baldor, Zeke Miller, Darlene Superville, Tom Krisher and Kevin Freking of The Associated Press; by Denis Slattery of the New York Daily News; by Jim Tankersly of The New York Times; and by Joe Deaux, Andrew Mayeda, Toluse Olorunnipa and Erik Wasson of Bloomberg News.