WASHINGTON -- The White House said Wednesday that Mexico, Canada and other countries may be spared from President Donald Trump's planned steel and aluminum tariffs under national-security "carve-outs."
If it comes to pass, it is seen as a way to soften the blow as threats of retaliation by trading partners and dire economic warnings from lawmakers and business groups spread.
Trump's trade and manufacturing adviser, Peter Navarro, said Wednesday night on Fox Business that the tariffs would go into effect within 15 to 30 days and that the proclamation the president intends to sign would include a clause that would not immediately impose tariffs on Canada and Mexico.
Earlier, press secretary Sarah Huckabee Sanders told reporters that the exemptions would be made on a "case-by-case" and "country-by-country" basis.
The comments were a reversal from the policy articulated by the White House just days ago that there would be no exemptions from Trump's plan.
Trump was expected to announce the tariffs by the end of the week, White House officials said.
Congressional Republicans and business groups meanwhile braced for the impact of expected tariffs of 25 percent on imported steel and 10 percent on aluminum, appearing resigned to additional protectionist trade actions as Trump signaled coming economic battles with China.
The looming departure of White House economic adviser Gary Cohn, a former Goldman Sachs executive who has opposed the promised tariffs, set off anxiety among business leaders and investors worried about a potential trade war.
"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 in a letter to Trump.
At the White House, officials were working to include language in the tariffs that would give Trump the flexibility to approve exemptions for certain countries.
"He's already indicated a degree of flexibility, I think a very sensible, very balanced degree of flexibility," Commerce Secretary Wilbur Ross told CNBC. "We're not trying to blow up the world."
As Navarro suggested, the tariffs may not go into effect immediately. Under the statute that gives Trump authority to impose the measure, he has up to 15 days to take action. That period could give countries or companies a chance to submit input and try to sway the administration's plan, according to the people familiar with the deliberations.
Still, Trump appears committed to pushing through the type of sweeping tariffs that rankled Cohn and that have been touted by advisers who have urged the president to follow through with the protectionist pledges he made during his campaign.
Trump signaled that other trade actions could be in the works. In a tweet, he said the "U.S. is acting swiftly on Intellectual Property theft." A White House official said Trump was referring to an ongoing investigation of China in which the U.S. trade representative is studying whether Chinese intellectual-property rules are "unreasonable or discriminatory" to American business.
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The official, who spoke on the condition of anonymity to discuss internal deliberations, said an announcement on the findings of the report -- and possible retaliatory actions -- was expected within the next three weeks.
Business leaders, meanwhile, continued to sound the alarm about the potential economic fallout from tariffs, with the president and CEO of the U.S. Chamber of Commerce raising the specter of a global trade war. That scenario, Tom Donohue said, would endanger the economic momentum from the GOP tax cuts and Trump's rollback of regulations.
"We urge the administration to take this risk seriously," Donohue said.
A possible U.S. trade war with China could pose immediate and long-term risks to shipments of soybeans, the second-most-valuable American crop, as competitors like Brazil would stand to gain more control over the market. That's according to the head of the commodity's main American trade group.
"Action by China to restrict imported U.S. soybeans would be the beginning of a long tail," Ryan Findlay, chief executive officer for the American Soybean Association, a St. Louis-based trade group, said in an email. "If China doesn't buy from the U.S., they buy from one of our competitors. If they establish a good relationship with our competitor they may be more apt to buy from them in the future reducing our exports more not only short-term but long term. From a historical perspective, U.S. farmers don't win in these scenarios."
Grower groups, including the American Farm Bureau Federation, the largest domestic farm organization, have warned that soybeans may be on the front line of any retaliation by China against U.S. tariffs on aluminum and steel. The Asian nation bought more than a third of the total $41 billion U.S. crop in the 12 months that ended Aug. 31, according to government data. But Brazil has already started to grab market share from U.S. shippers.
The president has said the tariffs are needed to reinforce lagging American steel and aluminum industries and protect national security. He has tried to use the tariffs as leverage in ongoing talks to revise the North American Free Trade Agreement, suggesting that Canada and Mexico might be exempted from tariffs if they offer more favorable terms under NAFTA.
Lawmakers opposed to the tariffs, including House Speaker Paul Ryan and Senate Majority Leader Mitch McConnell, have suggested more narrowly focused approaches to target Chinese imports. But members of Congress have few tools at their disposal to counter the president, who has vowed to fulfill his campaign pledge.
"I don't think the president is going to be easily deterred," said Sen. John Cornyn, R-Texas, who has suggested hearings on the tariffs.
Sen. Lamar Alexander, R-Tenn., said Trump had listened to him and others who disagree with the direction of the trade policies. "I thank him for that and he's been a good listener. The difficulty is so far I haven't persuaded him," Alexander said.
Republicans in Congress have lobbied administration officials to reconsider the plan and focus the trade actions on China, warning that allies such as Canada and members of the European Union would retaliate.
The EU said it was prepared to respond to any tariffs with countermeasures against U.S. products such as Harley-Davidson motorcycles, Levi's jeans and bourbon. EU Trade Commissioner Cecilia Malmstroem said the EU was circulating among member states a list of U.S. goods to target with tariffs so it could respond quickly.
The president plans to rally Republicans in western Pennsylvania on Saturday in support of Rick Saccone, who faces Democrat Conor Lamb in a Tuesday special House election. Trump has told associates that the tariffs could be helpful to the GOP cause in the election in the heart of steel country.
Billionaire investor Carl Icahn said Wednesday that he had no knowledge of Trump's tariff plans when he sold down a major position in a company that would be hit by the tariffs.
In a statement posted to his website, Icahn said the sale of shares in Manitowoc Co. was for "legitimate investment reasons" and had nothing to do with the tariff proposals, which were announced on March 1.
Icahn, 82, sold stock worth about $30 million in the Manitowoc, Wis., crane-maker, which has a sizable exposure to U.S. steel imports, according to a regulatory filing. The transactions took place from Feb. 12-22, the filing showed.
"Any suggestion that we had prior knowledge of the Trump administration's announcement of new tariffs on steel imports is categorically untrue," Icahn said Wednesday.
Information for this article was contributed by Zeke Miller, Matthew Daly, Alan Fram and Lorne Cook of The Associated Press; by Ana Swanson of The New York Times; and by Alan Bjerga and Elizabeth Fournier of Bloomberg News.
Business on 03/08/2018