U.S. allies brace for trade war as tariffs take effect
with the Dow Jones index dipping about 250 points.
But Commerce Secretary Wilbur Ross doubted there would be any long-lasting damage to the economy or to the ties between the U.S. and its allies.
“These are blips on the radar screen — I don’t think they change the fundamentals of the relationship,” he told CNBC. “Everybody has spats every now and again. Every family does, every country does with others — there’s nothing weird about that. I think everybody will get over this in due course.”
He also doubted that American consumers will feel the effects of the tariffs. As an example, he said they would raise the price of a can of beer by “a fraction of a penny.”
Mr. Trump, in proclamations announcing the tariffs, called them a matter of national security. He said the U.S. needed a steady supply of aluminum and steel to maintain its military strength and suggested that reliance on imports undercut that.
Political allies and opponents of Mr. Trump ridiculed that notion.
“This is dumb,” said Sen. Ben Sasse, Nebraska Republican. “Europe, Canada and Mexico are not China, and you don’t treat allies the same way you treat opponents. We’ve been down this road before — blanket protectionism is a big part of why America had a Great Depression. ‘Make America Great Again’ shouldn’t mean ‘Make America 1929 Again.’”
House Speaker Paul D. Ryan, Wisconsin Republican, was less florid but still clear in his break with a president he has generally supported.
“Today’s action targets America’s allies when we should be working with them to address the unfair trading practices of countries like China,” Mr. Ryan said. “There are better ways to help American workers and consumers. I intend to keep working with the president on those better options.”
Mr. Trump signaled earlier this year that the tariffs were coming but also invited targeted countries to make the case that they should be exempted. Brazil, Argentina and Australia reached what Mr. Trump called satisfactory deals to head off tariffs with quota limits.
Canada, Mexico and the European Union apparently fell short.
The administration has repeatedly used tariffs as part of get-tough trade policies, with a decision on automobile imports still looming. That could particularly hit China, though other nations were also preparing for a negative decision.
The U.S., Mexico and Canada are also engaged in negotiations to rewrite the 25-year-old North American Free Trade Agreement. Those talks also appear to be going badly.
Support for Mr. Trump’s tariffs decision was tough to find Thursday. Liberal-leaning labor unions, conservative free trade organizations, farmers, business organizations, and Democrats and Republicans in Congress all said the president’s decision was misguided.
“These tariffs are hitting the wrong target,” said Rep. Kevin Brady, Texas Republican and chairman of the House Ways and Means Committee. “When it comes to unfairly traded steel and aluminum, Mexico, Canada and Europe are not the problem — China is.”
He said he would hold hearings and make the administration defend its decisions.
The Commerce Department this year determined a need to ensure adequate U.S. steel production capacity to supply the military. Mr. Trump announced global tariffs as the official response to that determination.
He delayed the tariffs’ effective date for some of the country’s closest allies to make their cases. The announcement Thursday shows those appeals failed, and the tariffs will take effect Friday morning.
Mr. Trudeau was outraged by Mr. Trump’s claims of security. He said the decision was a betrayal of 150 years of partnerships in which Canadian troops fought and died alongside American troops against fascism and terrorism.
“That Canada could be considered a national security threat to the United States is inconceivable,” he said.
Canada’s retaliatory tariffs will take effect in a month, but Mr. Trudeau insisted that Americans shouldn’t take it personally.
“Americans remain our partners, our allies and our friends. This is not about the American people,” he said. “We have to believe that at some point common sense will prevail. But we see no sign of that in this action today by the U.S. administration.”