Rolled steel at a plant in Dearborn, Mich. The prospect of approaching tariffs on steel and aluminum has tipped off furious lobbying from governments around the world, and led to fears of a trade war.
By ANA SWANSONMARCH 7, 2018
WASHINGTON — More than 100 Republican lawmakers implored President Trump to drop plans for stiff and sweeping steel and aluminum tariffs as the White House prepared to formalize the measures on Thursday afternoon. Officials said late Wednesday that the plan would initially exempt Canada and Mexico and could ultimately exclude other allies.
Peter Navarro, a top White House trade adviser, said on Wednesday night that the president would hold a signing ceremony on Thursday afternoon in the Oval Office. He said the tariffs would go into effect in 15 to 30 days.
“The proclamation will have a clause that does not impose these tariffs immediately on Canada and Mexico,” Mr. Navarro said in an interview on Fox Business Network. A permanent exclusion will hinge on those countries agreeing to a “great” trade deal in the ongoing renegotiation of the North American Free Trade Agreement, he said.
“We’re going to open this up for our allies to just see if we can work through this problem,” Mr. Navarro added.
Mr. Trump has said the tariffs would apply to countries across the board and that any exemptions could open a Pandora’s box of requests for special treatment. That has prompted stiff blowback from trading partners, Republicans and the financial markets, which sank over fears that across-the-board tariffs would incite retaliatory action that stunts the United States’ economic growth. It also prompted the resignation of Mr. Trump’s top economic adviser, Gary D. Cohn, who had argued against broad tariffs and said on Tuesday he would leave the White House in the coming weeks.
“We are committed to acting with you and our trading partners on meaningful and effective action,” the letter said. “But we urge you to reconsider the idea of broad tariffs to avoid unintended negative consequences.”
The administration began talking more openly on Wednesday about exemptions for countries that satisfy certain conditions, backing away from the bazookalike approach Mr. Trump announced last Thursday in a hastily arranged meeting with steel and aluminum executives.
In an interview on Wednesday afternoon with Fox Business, Wilbur Ross, the secretary of commerce, said countries would be exempted if it served American national security interests. “It’s defined to include effect on employment. It’s defined to include effect on individual industries. It’s not the conventional definition of national security,” he said.
Mr. Trump appears to be taking advantage of the vacuum created by the resignation of Mr. Cohn, who was the plan’s loudest opponent, to push the tariffs through. Mr. Cohn, who argued that tariffs would create a global trade war, found himself overshadowed by a group of more protectionist-minded advisers who have urged the president to follow through with the get-tough pledges he made during his campaign.
That group has a much more binary view of trade, seeing it as a zero-sum game in which the United States is losing. The advisers have pushed the president to withdraw from trade deals like Nafta and to carry out the type of stiff tariffs that Mr. Trump seems poised to impose on steel and aluminum imports. They see the United States’ ballooning trade deficit, which hit a nine-year high on Wednesday, as evidence that more needs to be done to put the country on the winning end of global trade.
The rise of the populist faction is already fanning fears on Wall Street and among foreign officials that Mr. Trump could start and escalate a global trade war or take a more combative stance toward trading partners and international groups like the World Trade Organization. Foreign officials viewed Mr. Cohn as a reliable ally on global economic issues and as someone who could express their views to the president.
The prospect of approaching tariffs has set off furious lobbying from governments around the world, who have tried to sway the administration with offers of friendship and threats of retaliation. On Wednesday, the European Union released a list of American-made goods it would penalize if the tariffs went through.
China cautioned that it was prepared to “make an appropriate and necessary response” should the United States impose the tariffs.
“Choosing a trade war is surely the wrong prescription,” the foreign minister, Wang Yi, said during a news conference on Thursday in Beijing. “In the end, you will only hurt others and yourself.”
Many companies and unions, including the United Steelworkers, have pushed for Canada to be exempted from the plan. The country is the largest source of both steel and aluminum for the United States, and many companies have operations stretching across its border. Jim Mattis, the defense secretary, has also urged Mr. Trump to proceed
cautiously, particularly with regard to allies.
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