Trump to impose stiff steel tariffs
Stock markets take hit over fears of trade wars
WASHINGTON — President Donald Trump said Thursday that he will impose stiff tariffs on imports of steel and aluminum, making good on a key campaign promise and rattling stock markets as the prospect of a global trade fight appeared imminent.
In a hastily arranged meeting with industry executives that stunned many inside the West Wing, Trump said he would formally sign the trade measures next week and promised they would be in effect “for a long period of time.” The action, which came against the wishes of Trump’s pro-trade advisers, would impose tariffs of 25 percent on steel and 10 percent on aluminum, effectively placing a tax on every foreign shipment of those metals into the United States.
The president told more than a dozen executives that he wanted the tariffs to apply to all countries, one executive in attendance said. Trump argued that if one country was exempt, all other countries would line up to ask for similar treatment, and that metals could end up being shipped to the United States through exempted countries.
Trump’s authority to impose such sweeping tariffs stems from a Commerce Department investigation that concluded last month that imported metal threatened national security by degrading the U.S. industrial base. The administration has said it wants to combat cheap metals flooding into the United States, particularly from China, but a broad set of tariffs would fall most heavily on allies, especially Canada, which supplies steel and aluminum to U.S. companies as well as the military.
“People have no idea how badly our country has been treated by other countries,” Trump said Thursday. “They’ve destroyed the steel industry, they’ve destroyed the aluminum
industry, and other industries, frankly.”
“We’re bringing it all back,” he added.
Stocks fell in response to the potential tariffs, with declines in the industrial sector outpacing the overall market. The Standard & Poor’s 500 industrial sector was down 1.9 percent, compared with a decline of about 1.3 percent in the overall benchmark index. Shares of U.S. automakers, all large consumers of steel and aluminum, declined, as did shares of Boeing, a large exporter that could be hurt if other nations retaliate against U.S. tariffs.
Trump’s announcement came despite months of heavy pushback from U.S. companies that use metals in their products, like automakers and food packagers, and foreign officials, who warned that tariffs would strain relations and could prompt retaliatory trade actions. It also elicited a swift and severe response from Republican lawmakers, who said the action would ultimately hurt U.S. companies, workers, consumers and the economy.
The announcement capped a frenetic and chaotic morning as Trump summoned more than a dozen executives from the steel and aluminum industry to the White House, raising expectations that he would announce his long-promised tariffs.
Trump raised the specter of action with an early morning Twitter post, saying: “Our Steel and Aluminum industries (and many others) have been decimated by decades of unfair trade and bad policy with countries from around the world. We must not let our country, companies and workers be taken advantage of any longer.”
Yet the legal review of the trade measure had not been completed and, as of Thursday morning, White House advisers were still discussing various outcomes for tariff levels and which countries could be included, according to people familiar with the deliberations. Just an hour before Trump made his remarks, a White House spokeswoman said that no announcement was expected that morning.
Advisers have been bitterly divided over how to proceed on the tariffs, including whether to impose them broadly on all steel and aluminum imports, which would ensnare allies like the European Union and Canada, or whether to tailor them more narrowly to target specific countries.
Imposing tough sanctions would fulfill the president’s promises but could tip off trade wars around the world as other countries seek to retaliate against the United States. Foreign governments, multinational companies and the Pentagon have continued to push against broad tariffs, arguing that the measures could disrupt economic and security ties.
Brazil, Canada, Germany, Mexico and South Korea were the largest suppliers of steel to the United States in 2017, while Canada, Russia and the United Arab Emirates shipped the largest share of aluminum imports in 2016.
On Thursday, Canada, the European Union and other countries said they might have no choice but to retaliate in response.