Canada and Mexico exempt for now; for rest of world tariffs go into effect in 15 days

From The Hill

President Trump on Thursday officially announced steep tariffs on imported steel and aluminum, defying his own party and delivering on a campaign promise to fight what he sees as unfair practices by U.S. trading partners.

Trump ended a week of uncertainty by signing paperwork enacting tariffs of 25 percent on steel and 10 percent on aluminum during a hastily arranged event at the White House.

“Today, I am defending America’s national security by placing tariffs on foreign imports of steel and aluminum,” Trump said in the Roosevelt Room, flanked by steel and aluminum workers.

Trump called the struggles of domestic steel and aluminum industry a “travesty.” “This has been an assault on our country,” he said.

The president temporarily exempted Canada and Mexico from the tariffs, a move designed to deter trading partners from retaliating with tariffs of their own. But the tariffs against others nations will take effect in 15 days, officials said.

Canada and Mexico, two of the nation’s largest trading partners, each threatened to retaliate against across-the-board tariffs that would sweep them into the mix.

The official also said that with Canada and Mexico excluded, the president may have to “modestly” raise tariffs on everyone else to make up the difference.

Trump alluded earlier there could be additional carve-outs for Australia, though it’s unclear what that will entail.

“We’ll be doing something with them,” the president said during a Cabinet meeting. “We’ll be doing something with some other countries.”

White House officials said that all other countries will be able to make their case as to why they should be exempt from the tariffs and what they will do to shore up their national security relationship with the United States.

The president will have the discretion to add or subtract countries and raise and lower the tariffs at any time, a senior administration official said.

Administration officials said the length of the exemptions for Canada and Mexico would depend on progress in renegotiating the North American Free Trade Agreement (NAFTA).

Earlier this week, trade negotiators from all three countries wrapped up the seventh round of NAFTA talks without a final agreement. All three face political pressures to complete the deal, with upcoming elections likely to change the negotiating dynamics.

Republican lawmakers, business groups and overseas allies spent all week trying to persuade the president to scrap or curtail the tariffs, worrying that they could spark a global trade war.

But Trump could not be convinced, determined to deliver on his campaign promise to take a tougher approach on trade.

“It’s a promise made and a promise kept,” said a senior administration official, who added there should not be “any kind of surprise at any kind of actions we are taking.”

Trump has long argued that tariffs are needed to revive the U.S. steel and aluminum industries. He enacted the steel and aluminum measures using a rarely used legal provision that allows the president to impose tariffs unilaterally if imports are determined to pose a national-security risk.

The administration official argued that the president’s tariff policy will actually strengthen the global rules-based trading system by clearing out “all the market distortions” created by China’s steel overcapacity and the “burdensome and discriminatory trade practices of so many of our trading partners.”

Critics have called it a thinly veiled excuse to enact protectionist policies and gain leverage over Canada and Mexico in the ongoing renegotiation of NAFTA.

The tariffs were the subject of an intense debate within the White House, pitting protectionists like trade adviser Peter Navarro against free traders like National Economic Council Director Gary Cohn, who argued that the measures could anger allies and hurt the economy.

Cohn announced Tuesday he was resigning from the White House after losing the tariff debate, adding to the turmoil that has wracked the West Wing. Trump has seen a number of top aides leave in the past month as morale among his staff has plummeted.

Congressional Republicans also expressed deep concern over the moves, voicing fear that Trump could be poised to take even more aggressive actions on trade in the future, including ripping up NAFTA.

“We urge you to reconsider the idea of broad tariffs to avoid unintended negative consequences to the U.S. economy and its workers,” 107 House Republicans wrote on Wednesday in a letter to Trump.

Trump has indicated he is ready to go even further on trade. He tweeted Wednesday that “the U.S. is acting swiftly on Intellectual Property theft,” referring to an ongoing probe into whether China’s practices are hurting American businesses.

He also called on Beijing to reduce its trade surplus with the U.S. by $1 billion, a figure that was adjusted up to $100 billion, less than one-third of the $375.2 billion trade deficit the U.S. had with China last year.

“Our relationship with China has been a very good one, and we look forward to seeing what ideas they come back with. We must act soon!” he tweeted.



Legal Notice