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, with the notable exception of chief White House economic adviser Gary Cohn, who recently announced his resignation.
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.
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.
“If the same goals can be accomplished by other means, American will remain open to modifying or removing tariffs for individual nations, as long as we can agree on a way to ensure that their products no longer threaten our security,” Trump said.
“Some of the countries we’re dealing with are great partners, great military allies and we’re going to be looking at very strongly,” Trump said, noting the tariffs won’t go into effect for at least another 15 days. “We’re going to see who’s treating us fairly, who’s not treating us fairly. Part of that’s going to be military. Who’s paying the bills. Who’s not paying the bills. We subsidize many rich countries with our military. They pay not 100 cents on the dollar, in cases not 50 cents on the dollar and they’re massively wealthy countries.”
It was not immediately clear if the offer of talks would dissuade the European Union from going ahead with retaliation on around $3.5 billion worth of American goods in response to higher steel and aluminum tariffs. The list targets agriculture products such as kidney beans, bourbon whiskey, rice, cranberries, orange juice, peanut butter, tobacco and cheroots and manufactured goods such as grills, sinks, ventilators and ladders.
Trump, at a separate event earlier in the day, indicated he could exclude Australia and other countries from the duties based on their military cooperation and whether the U.S. maintains a positive trade balance with the nations.
“We’ll be making a decision as to who they are,” Trump said. “We have a very close relationship with Australia. We have a trade surplus with Australia. Great country, long-term partner. We’ll be doing something with them. We’ll be doing something with some other countries.”
“We’re going to be very flexible,” he said. But he added that the U.S. has both friends and enemies that have treated America unfairly in trade.
The news last week that Trump was prepared to impose the tariffs set off a global panic, with key U.S. allies like the European Union threatening to retaliate. Meanwhile, 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 upcoming midterm election.
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.
“Walking right to the brink of a trade war is dangerous,” Sen. Ben Sasse of Nebraska said in a statement. “As the anti-trade nonsense in Washington gets louder, our trading partners are getting ready to retaliate against Nebraska agriculture.”