Updated at 4:22 p.m. | President Donald Trump on Thursday set in motion tariffs that will slap fees on many imports of steel and aluminum, moving ahead with a major part of his “America first” philosophy above the loud objections of Republican lawmakers.
“People are starting to realize how important it is,” Trump said just before signing in the Roosevelt Room. He said a “strong steel and aluminum industry” is “absolutely vital” for national security, predicting his action will trigger the reopening of American production facilities.
The president said he was fulfilling a campaign promise and predicted his action will create steel and aluminum sector jobs inside the United States.
“We want, frankly, our companies to be protected,” he said, adding his view that other countries’ trade practices have amounted to “an assault on our country.
He was flanked by a group of steelworkers holding hard hats. He invited several to the presidential podium to speak, with some saying the tariffs could allow their facilities to ramp back to 100 percent capacity. One worker said his plant is operating at 40 percent.
Watch: Trump Signs Steel and Aluminum Tariffs
Trump, who dealt with changes in the steel sector as a New York real estate developer, said American workers in that sector were “betrayed” by past U.S. presidents and officials. With his action, Trump declared, “that betrayal is now over.”
Trump pointed to the policies of the 1890s while defending his actions, saying former President William McKinley would have approved. The protectionist McKinley, then an Ohio Republican chairman of the House Ways and Means Committee, shepherded a tariff bill through Congress.
The so-called “McKinley Tariff” raised fees on imports to nearly 50 percent with the aim of protecting U.S. companies against foreign competition. It was later amended to lower rates, and McKinley later denounced “commercial wars” as “unprofitable.”
Trump signed two proclamations that ordered the import fees to go into effect in 15 days (March 23). By imposing the tariffs, Trump followed through on a campaign promise to “protect” the U.S. steel and aluminum industries, which he earlier this week declared “a fraction” of what they once were. On Tuesday and again on Thursday, the president declared what has become a mantra for him: “If a country doesn’t have have steel, it doesn’t have a country,” although it is unclear exactly what that means.
“I’m just not a fan of broad-based tariffs,” Speaker Paul D. Ryan said Thursday during a question-and-answer session with Home Depot employees in Georgia.
Asked how Congress can convince the president Donald Trump to take a more targeted approach, Ryan said, “We’re working on that right now.”
Notably, the Senate Finance Committee, which has trade policy jurisdiction and is run by Republicans, was not briefed ahead of President Donald Trump’s trade announcement, according to a senior Senate aide.
The speaker’s comments came roughly half an hour before Trump’s White House event.
A senior administration official claimed there will be no “downstream” effect on consumer goods like a six-pack of beer canned in aluminum or automobiles. He labeled such “hair on fire” predictions “fake news,” using one of the president’s signature phrases. Most GOP lawmakers and virtually all mainstream economists disagree.
The tariffs will establish a 25 percent fee on imported steel and a 10 percent fee on imported aluminum, levels officials contend were purposely set to allow U.S. steel and aluminum companies to “earn a reasonable rate of return.”
Unmoved by such claims, senior Republican lawmakers like Ryan have been warning this will spark a trade war and result in higher consumer prices on a swath of goods, as well as undo benefits of the recent GOP tax break law. They were echoed by influential voices in conservative circles.
“Tariffs are a tax increase on American workers and their families,” Heritage Foundation President Kay Coles James said. “The president’s decision today to impose tariffs on steel and aluminum imports is disappointing, economically regressive and counterproductive.” And Grover Norquist, president of Americans for Tax Reform, tweeted this: “Tariffs are Taxes on American consumers.”
Tariffs are Taxes Tariffs are Taxes Tariffs are Taxes Tariffs are TaxesTariffs are Taxes on American consumers. — Grover Norquist (@GroverNorquist) March 8, 2018
The president contends his action will not spark a global trade conflict, and if it does, he has said “trade wars are good” and “easy” to win.
“So this is more than just pure economics,” Trump said Tuesday, hours before his chief economic adviser, Gary Cohn, resigned party due to his opposition. “This is about defense. This is about the country itself.”
Trump on Thursday told reporters he intends to be “quite flexible” on enforcing the import fees.
Canadian and Mexican goods will be initially exempted as North American Free Trade Agreement renegotiation talks continue, the senior administration official said. Any country is “welcome” to discuss with the administration why the tariff levels should be eliminated or reduced, the official said.
Trump also said he will have the authority to “go up or to go down” on the levels for individual countries.
“Just want fairness,” he said. “We have not been treated fairly by other countries.”
The United States will likely face legal action from its partners in the World Trade Organization, who will argue that the president’s stated reasoning for the tariffs, and his exemption of some countries, is a violation of U.S. commitments to the WTO and other trade agreements.
Led by Ryan, House Ways and Means Chairman Kevin Brady of Texas and Senate Finance Chairman Orrin G. Hatch of Utah, Republicans mounted a charge this week to convince Trump to either scrap the tariffs or tailor them to target trade abusers while shielding longtime American allies.
“There is clearly abuse occurring; clearly there is overcapacity, dumping and transshipping of steel and aluminum by some countries, particularly China,” Ryan told reporters Tuesday. “But I think the smarter way to go is to make it more surgical and more targeted.” A day later, more than 100 House Republicans wrote Trump pleading with him to reconsider; ultimately, he largely ignored them.
Some House Republicans tried to get a face-to-face meeting with Trump before he signed the tariffs to make their case against them. But Republican Study Committee Chairman Mark Walker of North Carolina said he, Brady and some other GOP lawmakers were unable to get a meeting with the president.
“I think they’re solidified in their position,” he said Thursday morning, two days after the president said he welcomes hearing all sides of a policy matter before making the final call.
“I like conflict. I like having two people with different points of view, and I certainly have that,” Trump said. “And then I make a decision.”
European Union officials could soon have a decision of their own to make. That’s because the tariffs would impact its member countries, prompting its leaders to craft a list of American-made goods like blue jeans, bourbon and motorcycles on which it might impose retaliatory tariffs.
Senior White House officials have confirmed Trump did not consider possible retaliation by other countries and global entities when he decided last week to impose the steel and aluminum import fees.
Of the EU — which is composed of many close U.S. allies — Trump said this on Tuesday: “They make it almost impossible for us to do business with them, and yet they send their cars and everything else back into the United States. And they can do whatever they'd like, but if they do that, then we put a big tax of 25 percent on their cars.”
“And believe me, they won’t be doing it very long. The European Union has not treated us well, and it’s been a very, very unfair trade situation,” the president said. “One of the reasons I was elected is I’m protecting our workers, I’m protecting our companies.”
Many Democrats support some import fees, especially ones intended to alter China’s trade practices of “dumping” and over-producing steel to affect global prices to its advantage — but they have concerns about Trump’s approach.
“Mr. President, don’t swing blindly and wildly at our foe, China, establish a well-placed jab at China,” Senate Minority Leader Charles E. Schumer said Thursday. “Set them back. Let them know we mean business.”
Trump is using the rarely invoked Section 232 of the Trade Expansion Act of 1962 to impose the import fees. That provision allows a sitting president to implement unlimited tariffs on imports if a federal investigation determines a threat to national security exists.
The Commerce Department led a study on steel and aluminum practices of other countries, especially China, and advised Trump those tactics — and the prices of both commodities — posed a threat to America’s security.
Commerce Secretary Wilbur Ross acknowledged during a Wednesday cable news interview that the administration used its own prism through which to study the steel and aluminum situation.
“It’s defined to include effect on employment,” Ross said. “It’s defined to include effect on individual industries. It’s not the conventional definition of national security.”
That led Heather Hurlburt, a former senior Clinton White House and State Department official, to advise her fellow “security wonks” via a tweet they need to “wake up &understand that our definition of our field [is] gone, goodbye.”
Wilbur Ross's definition of security exemption=another chance for security wonks to wake up &understand that our definition of our field gone, goodbye: “defined to include effect on employment...on individual industries. It’s not the conventional definition of national security”— Heather Hurlburt (@natsecHeather) March 8, 2018