President Donald Trump brushed off concerns raised by fellow Republicans and signed a pair of proclamations on Thursday setting new tariffs on steel and aluminum imports and potentially triggering a destructive trade war with the European Union and other nations.
“Today, I’m defending America’s national security by placing tariffs on foreign imports of steel and aluminum,” Trump said at a White House ceremony with steel and aluminum workers, Vice President Mike Pence and senior members of his economic team. Chief White House economic adviser Gary Cohn, who recently announced his resignation, was also present, but did not appear on camera.
Trump’s authority to impose the tariffs is based on a rarely used provision that gives the president the power to restrict trade because of national security interests. After a monthslong investigation, the Commerce Department found that imports of steel and aluminum threaten national security by undermining the long-term viability of those industries.
Trump’s authority to impose the tariffs is based on a law that gives the president the power to restrict trade on the basis of national security interests. After a monthslong investigation, the Commerce Department found that imports of steel and aluminum threaten national security by undermining the long-term viability of those industries.
The president’s decision to move forward with the tariffs comes after a chaotic week in which even senior administration officials were unsure what Trump would ultimately decide. As of Thursday morning, a person familiar with the issue said White House lawyers had not yet finalized the proclamation that would put the tariffs into effect — and many aides were unclear if an announcement would even happen Thursday.
But the White House ultimately decided to move forward with the announcement, which establishes tariffs of 25 percent on steel and 10 percent on aluminum brought cheers from the steel industry and organized labor.
“Wall Street’s hair is on fire over these tariffs because wealthy investors enrich themselves by closing mills and factories in the United States and moving them overseas,” AFL-CIO President Richard Trumka said in a statement. “Using tariffs isn’t going to start a trade war. There’s been a war on working people for decades, and we have been getting our butts kicked. Just look at southwestern Pennsylvania if you want proof.”
Canada and Mexico, which are in the midst of talks with the United States on renegotiating NAFTA, would be initially excluded from the tariffs that go into effect in 15 days. However, to maintain that exclusion, they must negotiate some agreement to address the threat to U.S. national security caused by their steel and aluminum exports to the United States, a senior administration official said.
The United States imports steel and aluminum from dozens of nations around the world and Canada is one of the biggest foreign suppliers of both metal products.
Other countries, including the 28-nation European Union, that want to be excluded from new tariffs will have to negotiate deals to address U.S. national security concerns about their steel and aluminum exports to the United States, the official said today.
U.S. Trade Representative Robert Lighthizer, who will be in Brussels on Saturday to meet with his EU and Japanese counterparts, will take the lead in the steel and aluminum talks.
For its part, EU said it will seek to be exempted from the new tariffs.
“The EU is a close ally of the US and we continue to be of the view that the EU should be excluded from these measures,” EU Trade Commissioner Cecilia Malmström said in a tweet. “I will seek more clarity on this issue in days to come. Looking forward to meeting USTR Lighthizer in Brussels on Sat to discuss.”
Mainstream business groups recoiled at the measures, which they fear will make it more expensive for manufacturers who rely on steel and aluminum to compete in world markets.
“Higher production costs will make American-made products more expensive and less competitive around the world — putting tens of thousands of American jobs at risk,” Joshua Bolten, president and CEO of the Business Roundtable said in a statement. “Our nation’s trading partners can and will retaliate by imposing new tariffs of their own. Furthermore, using ‘national security’ as an excuse to unilaterally impose tariffs opens the door for other countries to do the same – allowing them to bypass long-established international trade rules to gain an unfair advantage over American businesses and workers.”
Agriculture groups were also alarmed at the prospect of getting caught in the crossfire. China is a big importer of commodity crops like soybean, and farmers in the U.S. have already felt strained by a downturn in prices.
“We expect that these tariffs will cause retaliation that will come out of the pockets of American farmers. History shows that these types of tariff fights escalate with our trading partners and result in farmers paying the price in the form of higher tariffs on the products we export,” Farmers for Free Trade said in a statement.
The decision to move forward with the tariffs comes after a chaotic week in which even senior administration officials were unsure what Trump would ultimately decide. As of Thursday morning, a person familiar with the issue said White House lawyers had not yet finalized the proclamation that would put the tariffs into effect — and many aides were unclear if an announcement would even happen Thursday.
Republicans in Congress have urged Trump to moderate his position, raising concerns the tariffs could hurt the economy and threaten the GOP’s chances in the midterm elections.
Some Republicans praised Trump for stepping back from initial plans to impose an across-the-board tariff without any exceptions.
“Exempting Canada and Mexico is a good first step, and I urge the White House to go further to narrow these tariffs so they hit the intended target — and not U.S. workers, businesses, and families,” House Ways and Means Committee Chairman Kevin Brady said.
But others were more blistering.
“Simply put: This is a tax hike on American manufacturers, workers and consumers. Slapping aluminum and steel imports with tariffs of this magnitude is misguided. It undermines the benefits that the new tax law provides and runs counter to our goal of advancing pro-growth trade policies that will keep America competitive in the 21st century global economy,” Senate Finance Committee Chairman Orrin Hatch said.
Sen. Jeff Flake (R-Ariz.) told reporters he would introduce legislation to nullify the tariffs if the end result looked like what Trump has floated publicly.
Despite pressure from his own party, Trump has largely resisted efforts to abandon the tariffs altogether, according to people who have spoken to him in recent days
GOP leaders issued warnings again Thursday on the economic ramifications if trading partners retaliate against the tariffs. American agricultural exporters are particularly worried that they will suffer.
“We’re on the verge of a painful and stupid trade war, and that’s bad,” Sen. Ben Sasse (R-Neb.) said in a statement. “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.”
Adam Behsudi contributed reporting.