Sun Sentinel Palm Beach Edition
Trump plans steel and aluminum tariffs
Markets, his own staff caught off guard by move
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 U.S. 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 the nation does business with the rest of the world. On Thursday, Trump told 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 tariffs on countries that he views as taking unfair advantage of the U.S. The shift appeared to reflect the recent rise in influence of more hawkish advisers who share Trump’s skepticism of trade, including Peter Navarro.
Trump’s declaration came after a chaotic 12 hours in which administration officials first said Trump would take action, then said he would wait. In the end, he made the announcement in an almost off-the-cuff manner, responding to a question from reporters at a meeting with steel industry officials.
Stocks sank sharply after his remarks, as investors, already nervous about rising inflation and interest rates, began calculating the risks of trade conflicts, particularly with China. The Dow Jones industrial average closed down 420.22 points, or 1.68 percent. The S&P 500 fell 36.16, or 1.33 percent, while the Nasdaq shed 92.45, or 1.27 percent.
Details of the tariffs were unclear, including whether they would apply to all countries, or just primary targets, such as China.
Trump himself added to the expectations by tweeting early Thursday: “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. We want free, fair and SMART TRADE!”
Administration officials did not give a reason for the back and forth, but some analysts speculated that the confused timing reflected “internal chaos” in the White House.
The president has been weighing various options to limit imported aluminum and steel, which accounts for about one-fourth of U.S. consumption and has left domestic mills running well below capacity. Imposing tariffs or quotas would represent Trump’s most consequential action to date to overhaul U.S. trade practices, which he has sharply criticized for causing industrial decline and loss of jobs.
The president has until mid-April to issue his decision on the tariffs under the U.S. trade law through which the administration is pursuing the punitive measures. Officials are invoking a rarely used and controversial provision of the law that grants the president wide discretion to restrict imports on the grounds of national security.
Domestic producers, along with unions and lawmakers in steel-producing states, have been pressuring Trump to act swiftly, but some in the administration have sought to restrain the president, arguing that such action will hurt some U.S. companies and consumers of steel, and possibly the U.S. economy, and is certain to raise the ire of allies and adversaries alike.
Analysts expect the Chinese will target U.S. agricultural exports like soybeans, whose farmers are a politically powerful lobby in Congress and are likely to put pressure on the administration.