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Trump Signs off on U.S. Metals Tariffs, Exempts Canada and Mexico

VOA News | March 09, 2018 08:07

U.S. President Donald Trump on Thursday signed companion proclamations slapping 25 percent tariffs on steel coming into the country and 10 percent tariffs on imported aluminum.

The across-the-board taxes are to go into effect in 15 days.

Amid fears that his action would ignite a trade war, Trump declared the dumping of steel and aluminum in the United States as "an assault on our country," suggesting foreign producers relocate their facilities to America.

"If you don't want to pay tax, bring your plant to the USA," he said.

Trump was flanked in the Roosevelt Room by workers from those metals industries, some with hard hats in hand, as he signed the documents. Vice President Mike Pence, Treasury Secretary Steve Mnuchin, Commerce Secretary Wilbur Ross, U.S. Trade Representative Robert Lighthizer, and Trade and Industrial Policy Director Peter Navarro were also among those in the room.

After an outcry from lawmakers, some industry executives and foreign governments, Canada and Mexico are being given specific exemptions from the tariffs for an indefinite period while negotiations continue on the North American Free Trade Agreement (NAFTA).

"We're giving Canada and Mexico sufficient time to address these issues at the request of the governments, but it's not open-ended," said a senior U.S. administration official. "The focus is on the broader security relationship, where we can address ensuring national security and eliminate any impairment whatsoever."

Other countries which are considered allies of the United States — such as Australia — will also be given "satisfactory alternative means to address the threat" the Trump administration perceives to American steel and aluminum manufacturers, the official said.

"This is not a softening of our position in any way whatsoever," insisted the administration official in a call with reporters that was conducted on the condition of not being named.

President Donald Trump signs a proclamation on steel imports during an event in the Roosevelt Room of the White House in Washington on March 8, 2018. /AP

◆ 'Freest-Trading Nation'

Opponents of Trump's action see it as undermining the rules-based global trading system and using national security disguised as protectionism that will encourage other countries to resort to the same premise to protect their domestic markets.

The White House official rejected that argument Thursday, contending that the United States "is the freest-trading nation in the world" and arguing that the rules-based trading system, under the 23-year-old World Trade Organization with 164 member states, "is not working very well for the American people."

Trump signed the proclamations just hours after 11 other countries formalized a revised agreement in Chile that reduces tariffs and cuts trade barriers among the member countries.

Known as the Comprehensive and Progressive Agreement (CPTPP), it replaces the Trans-Pacific Partnership (TPP) from which Trump withdrew the United States. The countries joining in the TPP successor are Australia, Brunei, Canada, Chile, Malaysia, Mexico, Japan, New Zealand, Peru, Singapore and Vietnam.

Trump boasted last week that trade wars "are good and easy to win" after his surprise announcement to levy the tariffs on the two metals. "It's a promise made, a promise kept," the senior administration official said Thursday. "Nobody... should express any kind of surprise."

◆ National Security Argument

The Trump administration said that retaining a domestic steel and aluminum manufacturing capacity is a matter of national security to build everything from tanks to rockets, as well as critical infrastructure such as water treatment plants.

"This kind of action will maintain a workforce of skilled workers," according to the administration official, adding, "the national security rationale is unassailable." The country's "aluminum and steel industries are severely under threat, being weakened or, in the case of aluminum, being driven to extinction," said the official.

The White House also is rebutting arguments the tariffs will lead to higher prices for American consumers and layoffs of workers in factories that will have to use higher-priced steel and aluminum.

Such reports are "hair-on-fire rhetoric" emanating from "lobbyists, politicians and swamp creatures," the U.S. official said.

According to the White House, the tariffs will add up to 2 cents to a six-pack of soda or beer and increase the cost of a $330-million Boeing 777 jetliner by a mere $25,000.

The tariffs, according to the White House official, will see steel and aluminum makers restarting factories, significantly increasing production and hiring hundreds of workers.

◆ China Issue

As far as China, it is "not a significant exporter to the U.S. at this time," according to the official. "The China problem is simply a massive, massive overcapacity that China has built up in both aluminum and steel."

In planned U.S. discussions with Canada, Mexico and all other countries that produce steel, "we need to address global excess capacity," the official said. "This is going to be a key part of one of the long-term objectives that the president has."

Trump said trade discussions are ongoing with Beijing, but "I don't know that anything's going to come of that."

At the end of the event, a reporter asked Trump about steel trans-shipments from China. He replied, "We're going to stop the trans-shipping," but then quickly added that if any such shipments are to continue, "it'll cost a lot more money."

Democratic Senator Sherrod Brown, from the Midwestern state of Ohio, told VOA, "China has continued to cheat by subsidizing land and energy and water and capital, and they will continue if we don't draw a line." Trump should "have focused more on China and less on Canada and our trading partners that have played more fair," Brown added.

Republican Senator John Cornyn of Texas told VOA he believes Trump has heard the voices who expressed concern about imposing the tariffs, but "the president's got some pretty fixed ideas about trade, and obviously he ran on those and, I think, feels obligated to follow through on his campaign promises."

Republican Senator Jeff Flake of Arizona said he is introducing a law to nullify the tariffs.

The chairman of the Senate's finance committee, Republican Orrin Hatch of Utah, also criticized the presidential action, but expressed hope of working with the Trump administration to "mitigate the damage."

House Speaker Paul Ryan, a Republican from Wisconsin, says he fears "unintended consequences" from the tariffs -- namely, retaliation by targeted countries.

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