USA TODAY International Edition
For metal makers, quotas may be worse than tariffs
Industry experts wary of Trump’s shifting plan
WASHINGTON – Industries that rely on steel and aluminum that have been lobbying for weeks against President Trump’s proposed tariffs are increasingly shifting their focus to the administration’s plan to pursue trade quotas instead.
In announcing its decision this week to delay a 25% tariff on steel and a 10% tariff on aluminum, the White House signaled it would seek quotas to protect domestic metal makers that would also potentially raise the price of cars and household goods.
“We simply cannot allow government policies to stand in the way of our growth, and quotas would do that,” said Jeff Henderson with the Aluminum Extruders Council.
Henderson’s trade association opposes both tariffs and quotas. But quotas, Henderson stressed, present a unique challenge: They not only increase the price of metals, they could also limit supply if the caps are reached early in the year.
That possibility, he said, has already led to “panic buying,” in which manufacturers are seeking to scoop up certain kinds of aluminum in anticipation of trade barriers.
Thom Dammrich, president of the Chicago-based National Marine Manufacturers Association, said it is hard to decide whether tariffs or quotas would be more damaging to the recreational boating industry.
“The inevitable increases in price that come with tariffs are a grave concern,” he said. “But choosing quotas over tariffs would threaten to disrupt supply, which is also problematic for manufacturers ... who often have trouble sourcing the materials they need.”
Trump has vowed to reset trade relations with much of the world, arguing U.S. manufacturers have suffered from the “terrible” agreements his predecessors signed. His administration is renegotiating the 1994 trade pact among the U.S., Canada and Mexico, and it walked away from a trade deal with Pacific Rim nations last year.
On steel and aluminum, the focus has been on the tariffs the president announced in March. At the time, he offered temporary exemptions to the European Union, Canada, Mexico and other allies. The White House said Monday it extended those exemptions by a month for some countries and that it is nearing longer agreements with others.
Trade officials did not disclose details of the new agreements, but the White House has made clear it wants quotas in exchange for relaxing tariffs. White House trade adviser Peter Navarro reiterated that point Tuesday.
“The guiding principle of this administration, from the president down to his team, is that any country or entity like the European Union which is exempt from the tariffs will have a quota and other restrictions,” he said.
It’s not yet clear how an increased reliance on quotas would impact consumers. But some analysts say it could have a pronounced effect on industries that rely on raw metals, such as automakers.
“We’re against anything that drives up the cost of a vehicle,” said Libby Newman with the American International Automobile Dealers Association. “Call it a quota, call it a tariff — it’s all a tax on consumers.”
Quotas limit the amount of metal a country may export, which creates an incentive for overseas steelmakers to craft more expensive products.