Trump firm on tariff plan, advisers state

No nations exempt, they say

President Donald Trump, with U.S. Trade Representative Robert E. Lighthizer, speaks in the Oval Office on Jan. 23.
President Donald Trump, with U.S. Trade Representative Robert E. Lighthizer, speaks in the Oval Office on Jan. 23.

WASHINGTON -- President Donald Trump's administration held firm Sunday to its plan to levy import tariffs on steel and aluminum despite broad domestic and international criticism.

White House trade adviser Peter Navarro said the president was not planning to exempt any countries from the new trade duties.

"As soon as [Trump] starts exempting countries, he has to raise the tariff on everybody else" to make up the difference, Navarro said on Fox News Sunday. "As soon as he exempts one country, his phone starts ringing with the heads of state of other countries."

Trump announced Thursday that he would impose tariffs of 25 percent and 10 percent, respectively, on imported steel and aluminum. While the tariffs are intended to punish China for what critics say is steel sold so cheaply as to drive other nations' industries out of business, the duties will also cover significant imports from Canada, Mexico, South Korea, Turkey, Japan and the European Union. Canada, the largest U.S. trading partner, is also the largest exporter of steel and aluminum to the United States, supplying $7.2 billion worth of aluminum and $4.3 billion of steel last year.

A formal announcement on the tariffs is expected by the end of this week, administration officials said Sunday. The Pentagon had recommended that Trump only pursue targeted tariffs, so as not to upset American partners abroad. The European Union has already threatened retaliatory tariffs on U.S. manufactured goods, including motorcycles and bluejeans.

But Trump reiterated his preference for tariffs Sunday night on Twitter, writing that the American "steel and aluminum industries are dead. Sorry, it's time for a change!"

The preservation of those industries was a key point for White House officials on Sunday. In several interviews, Navarro asserted that the cost to U.S. consumers from any retaliatory actions from other countries would be a penny or two on a "six-pack of beer or Coke," and that Americans would be willing to pay it to preserve domestic aluminum and steel production. He was challenged by interviewers on both his math and his premise, and he accused Fox host Chris Wallace of "fanning the flames" of a trade war.

On CNN, Navarro bristled when asked whether the Trump administration would consider pulling the United States out of the World Trade Organization.

"That's a provocative question," he said. "The best-case scenario here is that the World Trade Organization wakes up and realizes we're not going to take it anymore."

On NBC's Meet the Press, Commerce Secretary Wilbur Ross said the aluminum in a can of beer was worth about 3 cents, meaning a 10 percent tariff would add 0.3 of a cent to the cost.

"Retaliation isn't going to change the price of a can of beer," Ross said. "It isn't going to change the price of a car. It's just not going to. It can't."

When host Chuck Todd said Ross wasn't accounting for the retaliation on "every other industry," Ross replied, "Retaliation has nothing to do with the price of beer."

TRADE WAR FEARS

Sen. John Thune, R-S.D., feared the tariffs could spark a trade war that could shrink the global market for U.S. crops, eroding the president's base of support with rural America and even the blue-collar workers the president says he trying to help.

"There is always retaliation, and typically a lot of these countries single out agriculture when they do that," Thune said. "So we're very concerned."

Tim Phillips, president of Americans for Prosperity, noted that Trump narrowly won in Iowa and Wisconsin, two heavily rural states that could suffer if countries impose retaliatory tariffs on American agricultural goods.

"It hurts the administration politically because trade wars, protectionism, they lead to higher prices for individual Americans," Phillips said. "It's basically a tax increase."

Sen. Lindsey Graham, a South Carolina Republican, called the tariff decision wrongheaded and misdirected.

"Please reconsider," Graham said in a direct appeal to Trump on CBS' Face the Nation, saying the decision would hurt automobile manufacturing in his state while "letting China off the hook."

"You're punishing the American taxpayers and you are making a huge mistake," the senator said.

Ohio Gov. John Kasich, a Republican, on CNN, excoriated the president over the planned tariffs, which he said were announced with little warning.

"You just don't do things like that off the cuff," Kasich argued. "Trade wars that divide us from our allies make no sense."

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Gov. Scott Walker, R-Wis., asked the administration to reconsider its stance. He said American companies could move their operations abroad and not face retaliatory tariffs.

"This scenario would lead to the exact opposite outcome of the administration's stated objective, which is to protect American jobs," Walker said.

Trump is also facing criticism from some of the top economists who advised his campaign. Navarro brushed off the criticism, arguing that Trump was alone in the GOP on trade during the 2016 presidential campaign.

"All 16 of those candidates didn't agree with his policies, either," Navarro said on CNN. "They're dead wrong on the economics, there's no downstream effect here. There's only a president ... saving and defending our aluminum and steel industries."

As for speculation that White House economic adviser Gary Cohn might quit over the new policy, with which he apparently disagrees, Ross said Trump likes to hear opposing views before he makes decisions.

"Gary Cohn, as far as I know, is certainly not going to walk out," Ross said on ABC.

Navarro agreed that Trump likes to hear all sides of an argument, so Cohn "is a valued member of the team."

"It's up to Gary whether he goes or stays, but I like working with the guy," Navarro added.

RECONSIDER, MAY ASKS

British Prime Minister Theresa May was among the first international leaders to raise concerns directly with Trump, asking for a reconsideration of a policy that close allies say will start a global trade war.

May's office said she spoke with the president on Sunday morning and "raised our deep concern at the president's forthcoming announcement on steel and aluminum tariffs, noting that multilateral action was the only way to resolve the problem of global overcapacity in all parties' interests."

The White House did not immediately release its own statement on the call.

British Cabinet Office Minister David Lidington on Sunday also warned against the tariffs, telling the BBC that "the United States is not taking an advisable course in threatening a trade war."

Lidington said that when the U.K. tried to protect its car industry in the 1960s and '70s, "we lost all our export markets" because other countries were more competitive.

In China, Vice Foreign Minister Zhang Yesui, the spokesman for the National People's Congress, announced that China would host U.S. officials for a new round of dialogue on trade issues. He said lawmakers were preparing measures to promote and protect foreign investment.

Zhang said China doesn't want a trade war, but wouldn't allow its interests to be harmed. He gave no details on timing for the talks or who might be included.

A trade flare-up with the U.S. is one event that could complicate plans by China's policy makers to tackle domestic priorities without disrupting steady economic growth. Li is expected to kick off the legislative session by presenting his annual report, including this year's expected increase in gross domestic product. Economists have forecast 6.5 percent growth this year after 6.9 percent growth last year that beat the government's target.

DEMOCRATS BACK PLAN

But support for the measure came from many Democrats and labor unions who have previously been critical of the president.

Sen. Joe Manchin III, D-W.Va., said on CNN that the president's tariff plan was "welcome."

"In West Virginia, we've lost thousands and thousands of jobs," Manchin said. "When you look at who produces the steel in the world, 50 percent of the steel comes from China ... connect the dots."

Sen. Sherrod Brown, D-Ohio, simply responded, "Good, finally." Sen. Bob Casey of Pennsylvania, a Democrat who has called for Trump to resign, also supported the tariffs.

"I urge the administration to follow through and to take aggressive measures to ensure our workers can compete on a level playing field," Casey tweeted.

Both candidates in a March 13 U.S. House election in Pennsylvania -- a state famous for steel production -- have embraced the president's plans for tariffs. They addressed the topic Saturday in a debate that aired on WTAE in Pittsburgh.

"For too long, China has been making cheap steel and they've been flooding the market with it. It's not fair and it's not right. So I actually think this is long overdue," said Democratic candidate Conor Lamb.

"Unfortunately, many of our competitors around the world have slanted the playing field, and their thumb has been on the scale, and I think President Trump is trying to even that scale back out," said Republican candidate Rick Saccone.

Information for this article was contributed by Anne Gearan and Karoun Demirjian of The Washington Post; by Ken Wills, Peter Martin, Miles Weiss, Mark Niquette, Rich Miller and Dandan Li of Bloomberg News; and by Kevin Freking, and by Zeke Miller and staff members of The Associated Press.

A Section on 03/05/2018

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