Trump tariffs give Mexico, Canada time to negotiate
Taxes on foreign steel, aluminum for ‘security’
President Trump ordered tariffs Thursday on foreign steel and aluminum, brushing aside objections in his own party but sparing Canada and Mexico temporarily while the U.S. pushes its neighbors for a more favorable free trade deal.
In a meeting with factory workers at the White House, Mr. Trump said the tariffs of 25 percent on steel and 10 percent on aluminum keep his campaign pledge to rescue domestic industries and to protect national security. The new taxes on imports will take effect March 23.
“The actions we are taking today are not a matter of choice; they are a matter of necessity for our security,” Mr. Trump said as he signed two proclamations in the Roosevelt Room.
The president spurned strenuous opposition from Republicans in Congress, who argue that tariffs will spark a retaliatory trade war aimed at other U.S. sectors such as agriculture, and will make U.S. businesses less competitive.
“I disagree with this action and fear its unintended consequences,” said House Speaker Paul D. Ryan, Wisconsin Republican, who urged the president to narrow the focus of tariffs. “Our economy and our national security are strengthened by fostering free trade with our allies and promoting the rule of law.”
Conservative groups and several business associations objected to the move. They predicted that the tariffs will jeopardize the economic gains spurred by Mr. Trump’s tax cuts and deregulation from his first year in office.
Joshua Bolten, a former Obama administration official who is president and CEO of the influential Business Roundtable, called the tariffs “a major unforced error by President Trump, putting America’s economic progress at risk.”
The steelworkers invited by the White House to attend the signing ceremony said the move would give their plants a chance to rebound.
Ron Davis, a steelworker at ArcelorMittal’s Conshohocken, Pennsylvania, mill thanked Mr. Trump, saying steel imports have led to closed mills in the U.S.
“Our plant’s going to be idled in September,” Mr. Davis told the president. “At one time, our plant had 400 members; we’re going to be down to about 71. So these tariffs definitely have an impact.”
Mr. Trump, who has consistently hammered away at previous administrations’ weak trade deals, said he was placing the focus on restoring good manufacturing jobs that have been lost through foreign dumping of steel and aluminum.
“Our industries have been targeted for years and years — decades, in fact, by unfair foreign trade practices, leading to the shuttered plants and mills, the laying-off of millions of workers, and the decimation of entire communities,” Mr. Trump said. “And that’s going to stop. We want our workers to be protected.”
Seemingly referring to other proposed trade actions, Mr. Trump said, “This is only the first stop.”
The president said the U.S. could use the tariffs against nations that are not paying their fair share of security alliances.
“We’re going to see who’s treating us fairly, who’s not treating us fairly — who’s paying the bills, who’s not paying the bills,” Mr. Trump said.
The exemptions for Mexico and Canada are aimed at pressuring those countries in the renegotiation of the North American Free Trade Agreement, which Mr. Trump has threatened to scrap unless the U.S. obtains more favorable trading terms.
“If we reach a deal, it’s most likely that we won’t be charging those two countries the tariffs,” Mr. Trump said.
Some of the largest steel manufacturers, including ArcelorMittal and Nucor, operate in both Canada and the U.S. Canada is the top supplier of steel to the U.S. and buys more U.S. steel than any other country.
The most vocal opposition to the president’s action came from his own party, which is traditionally home to free-traders and agricultural interests.
“I am very, very concerned about the tariff policy that we see coming out right now, because we do export so much of our commodities, our soybeans, our corn, beef, pork,” Sen. Joni Ernst, Iowa Republican, told radio host Hugh Hewitt. “I think retaliation, especially against states like Iowa, is going to be very, very heavy.”
Sen. Ben Sasse, a Nebraska Republican who met Thursday with Mexico’s ambassador to the U.S. and agricultural officials from his home state to promote NAFTA, said, “We’re on the verge of a painful and stupid trade war, and that’s bad.
“This isn’t just bad for farmers and ranchers in Nebraska who need to buy a new tractor; it’s also bad for the moms and dads who will lose their manufacturing jobs because fewer people can buy a more expensive product,” Mr. Sasse said. “Temporary exceptions for Canada and Mexico are encouraging, but bad policy is still bad policy, and these constant NAFTA threats are nuts.”
The president received a letter this week from 107 House Republicans urging him to reconsider the tariffs. Mr. Ryan and Senate Majority Leader Mitch McConnell, Kentucky Republican, also have raised concerns.
Sen. Mike Lee of Utah said he would work with other Republican lawmakers “to make sure these tax hikes are never enforced.”
Senate Minority Leader Charles E. Schumer, New York Democrat, said Mr. Trump’s “instincts on China are correct, but his execution is poor.”
“Go after China, and do it in a smart, focused but sharp-edged way,” Mr. Schumer said.
Some critics warned that the tariffs will cause job losses in domestic industries that depend on lower-cost foreign steel and aluminum to manufacture products such as cars, beer cans and candy wrappers.
A senior administration official said the consumer costs from the tariffs will be “very, very small,” adding at most 2 cents to the cost of a six-pack of beer.
“There will be no significant price effects or inflationary effects or job effects downstream from the steel and aluminum industries,” the official said. “This is simply fake news.”
Other top exporters of steel to the U.S. are the European Union, Brazil, South Korea, Japan and Mexico. They have threatened to retaliate against the tariffs by taxing such U.S.-made goods as bluejeans, bourbon and motorcycles.
The broad action gives the president flexibility to remove or add countries that are subject to the tariffs, or to change the tariffs, depending on which countries offer the U.S. sweeter trade deals in return. An administration official said the other possible exemptions will focus on countries with national security ties to the U.S.
“I’ll have a right to go up or down, depending on the country, and I’ll have a right to drop out countries or add countries,” Mr. Trump said. “We just want fairness. Because we have not been treated fairly by other countries.”
Mr. Trump took the action based on Section 232 of the Trade Expansion Act of 1962 on the premise that further decline of the domestic steel and aluminum industries will harm national security. The senior administration official said the Defense Department needs U.S.-made steel and aluminum to build equipment such as Bradley fighting vehicles, Tomahawk missiles and Navy ships.
The official said the U.S. steel industry has lost 50,000 jobs since 2000 and the domestic aluminum industry has lost six smelters since 2013, leaving just five. Only one makes the military-grade aluminum that the Pentagon needs.
“Our aluminum and steel industries are severely, severely under threat of being weakened or, in case of aluminum, driven to extinction,” the official said. “This is a significant vulnerability. This is an industry that is in serious condition.”
The Alliance for American Manufacturing said the glut of steel on global markets has increased, mainly because of overcapacity from China, causing imports to rise more than 15 percent last year.
“The results have been predictable: Layoffs in the United States, steelworker marches across Europe,” the group said. “China’s response has been to acknowledge the problem, agree to reductions — and has repeatedly failed to follow through on its commitments.”
The group said the tariff will allow U.S. producers to hire back more workers and regain market share.
Gathered around President Trump for the signing ceremony were factory workers, who said his tariffs would give their plants a chance to rebound. Mr. Trump pledged during his campaign to rescue domestic industries and to protect security.