Trump tar­iffs give Mex­ico, Canada time to ne­go­ti­ate

Taxes on for­eign steel, alu­minum for ‘se­cu­rity’

The Washington Times Weekly - - Politics - BY DAVE BOYER

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.

AS­SO­CI­ATED PRESS

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.

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