Thursday, March 01, 2018 5:40:08 PM
Trump Plans Tariffs on Steel and Aluminum and Markets Slump
"For Americans, Trump’s tariffs on imports could be costly"
By ANA SWANSONMARCH 1, 2018
A steel furnace in Germany. At a White House meeting on Thursday, President Trump said that he did
not want any nation to be exempted from the order.
Credit Alexander Koerner/Getty Images
WASHINGTON — President Trump said on Thursday that he will impose stiff tariffs on imports of steel and aluminum, thwarting some of his top pro-trade advisers and rattling stock markets as the prospect of a global trade fight loomed.
Mr. Trump said he would formally sign the trade measures next week and promised they would be in effect “for a long period of time.” The measures would impose tariffs of 25 percent on steel and 10 percent on aluminum.
The tariffs are expected to apply to all countries, according to an industry executive briefed on the president’s plans. At a White House meeting on Thursday, Mr. Trump told a group of executives that he did not want any nation to be exempted from the order, arguing that if one country was exempt, all other countries would be in line to ask for similar treatment, the executive who attended the meeting said. The president also argued that metals could end up being shipped to the United States through exempted countries.
The trade action stems from a Commerce Department investigation that concluded imported metal threatens national security by degrading the American industrial base.
“People have no idea how badly our country has been treated by other countries,” Mr. Trump said as he made the announcement. “They’ve destroyed the steel industry, they’ve destroyed the aluminum industry, and other industries, frankly.”
“We’re bringing it all back,” he added.
Stocks fell as Mr. Trump made his comments about tariffs, with declines in the industrial sector outpacing the overall market. The Standard & Poor’s 500 industrial sector was down more than 2 percent, compared with the overall benchmark index, which was down a bit less than 1 percent as of around 1:30 p.m. Shares of Boeing and of American automakers, all large consumers of steel and aluminum, declined. Sales for Boeing, the country’s largest exporter, could be hurt as other nations retaliate against tariffs from the United States.
The announcement capped a frenetic and chaotic morning inside the White House as Mr. Trump summoned more than a dozen executives from the steel and aluminum industry to the White House, raising expectations that he would announce his long-promised tariffs.
-
Donald J. Trump
@realDonaldTrump
Our Steel and Aluminum industries (and many others) have
been decimated by decades of unfair trade and bad policy with
countries from around the world. We must not let our country,
companies and workers be taken advantage of any longer. We
want free, fair and SMART TRADE!
11:12 PM - Mar 1, 2018
-
However, the legal review of the trade measure was not yet complete and, as of Thursday morning, White House advisers were still discussing various scenarios for tariff levels and which countries could be included, according to people familiar with the deliberations. Just an hour before Mr. Trump made his remarks, a White House spokeswoman said that no announcement was expected that morning.
Advisers have been bitterly divided over how to proceed on the tariffs, including whether to impose them broadly on all steel and aluminum imports, which would ensnare allies like the European Union and Canada, or whether to tailor them more narrowly to target specific countries.
Imposing tough sanctions would fulfill one of the president’s key campaign promises, but it could tip off trade wars around the globe as other countries seek to retaliate against the United States. Foreign governments, multinational companies and the Pentagon have continued to push against the trade measures, arguing that the proposed tariffs could disrupt economic and security ties .. https://www.nytimes.com/2018/02/25/business/trump-trade-sanctions-aimed-at-china-could-ensnare-canada.html?rref=collection%2Fbyline%2Fana-swanson .
Gary D. Cohn, the director of the National Economic Council, had been lobbying for months alongside others, including Defense Secretary Jim Mattis and Rob Porter, the staff secretary who recently resigned under pressure from the White House, to kill, postpone or at least narrow the scope of the measures, people familiar with the discussions said.
But in recent weeks, a group of White House advisers who advocate a tougher posture on trade has been in ascendance, including Robert E. Lighthizer, the country’s top trade negotiator, and Peter Navarro, a trade skeptic and former steel industry lawyer who had been sidelined but is now in line for a promotion .. https://www.nytimes.com/2018/02/25/us/politics/peter-navarro-trade.html?rref=collection%2Fbyline%2Fana-swanson&action=click&contentCollection=undefined®ion=stream&module=stream_unit&version=latest&contentPlacement=5&pgtype=collection .
The departure of Mr. Porter, who organized weekly trade policy meetings and coordinated the trade advisers, has helped fuel a chaotic situation in which opposing trade factions are no longer kept in check. The situation had descended into an all-out war between various trade advisers, people close to the White House said.
The White House has come to the brink of announcing steel and aluminum tariffs several times in the past eight months, including last June. In recent days, the president appears to have grown impatient for action.
In the past few days, supporters of the tariffs have also begun airing televised ads during programs that Mr. Trump has been known to watch. One such ad ran on Fox News just minutes before the president’s tweet on Thursday morning.
The tariffs have also divided industries, workers and policymakers. American manufacturers of steel and aluminum are among those pushing the White House to take action against cheap imports, which they say have hurt their ability to compete. But American companies that use steel and aluminum in their products, including automakers and food packagers, say that tariffs would raise their costs, eating into their profits or forcing them to raise prices for consumers or lay off workers.
Scott Paul, the president of the Alliance for American Manufacturing, which represents steel companies and workers, said the president made “an encouraging show of support” on Thursday morning but that now was the time for him to act.
“The president’s enforcement action must be broad, robust and comprehensive,” Mr. Paul said. “We urge the president to stand by our nation’s steel communities.”
Roy Hardy, the president of the Precision Metalforming Association, which represents metalworking companies, said the tariffs would imperil “the U.S. manufacturing sector, and particularly downstream U.S. steel and aluminum consuming companies.” He argued that companies that use steel to make their products employ many times more Americans than the domestic steel industry.
Mr. Trump’s announcement seemed likely to tip off a period of fierce lobbying by foreign governments and multinational companies who will argue that their products should be exempted from any sanctions.
The tariff could have very different economic and political consequences, depending on which countries are ultimately affected. Though the president has often criticized China for dumping cheap metals, American restrictions on Chinese steel and aluminum mean the country actually exports little of the products to the United States currently.
Instead, the bulk of American metal imports are supplied by allies. Canada, Brazil, South Korea and Mexico were the largest suppliers of steel to the United States in 2016, while Canada, Russia and the United Arab Emirates shipped the largest share of aluminum imports.
Tadaaki Yamaguchi, a Japanese steel executive and the chairman of the Japan Steel Information Center, called a 25 percent across-the-board tariff “ill-advised and naïve.”
“It will inevitably invite retaliation from America’s most reliable allies, ultimately hurting American non-manufacturing industries as well,” he said.
Mr. Trump’s announcement came on the same day that senior administration officials were scheduled to meet .. https://www.nytimes.com/2018/02/28/us/politics/china-envoy-seeks-to-defuse-tensions-with-us-as-a-trade-war-brews.html .. with China’s top economic adviser, Liu He. The White House has been eager to clamp down on Chinese imports and has several trade measures underway.
The Commerce Department investigation, which was started under an obscure measure of the trade law called Section 232, has focused on whether imports were compromising American national security by degrading the industrial base. In a report released to the public in February, the department concluded that imports were a national security threat.
The Trump administration has already issued tariffs — it imposed restrictions on foreign washing machines and solar panels .. https://www.nytimes.com/2018/01/22/business/trump-tariffs-washing-machines-solar-panels.html?rref=collection%2Fbyline%2Fana-swanson .. in January — but trade analysts said the announcement on steel and aluminum could be the broadest and most significant measure yet from an administration that has vowed to take a substantially different tack on trade.
Trade lawyers have been particularly concerned about the tariffs because they revolve around national security concerns, which legal experts describe as the “nuclear option” of trade. The United States has not used Section 232 to carry out a trade investigation since 2001, and those investigations have only resulted in trade barriers twice in the law’s nearly 40-year history .. https://piie.com/commentary/op-eds/trump-new-kind-protectionist-he-operates-stealth-mode .
The World Trade Organization provides substantial leeway for countries to pursue trade measures in their national security interest, but few countries have tested the extent of those permissions.
Trade experts worry that other countries could follow the United States’ lead and begin using national security concerns to justify a variety of protectionist measures aimed at shutting their industries off from foreign competition. China also uses national security as a justification for trade measures that American industry opposes, like requiring technology companies to store consumer data within Chinese borders.
Alternately, the World Trade Organization could end up ruling against the measures. That might feed an opinion already popular in the Trump administration that the organization seeks to compromise American sovereignty, and lead to its ultimate demise.
Eswar Prasad, a professor of international trade at Cornell University, said the action portended “a period of open and aggressive trade hostilities with some of America’s major trading partners” and threatened to undercut the rules of the World Trade Organization, which the United States itself was instrumental in forming.
------
Follow Ana Swanson on Twitter: @AnaSwanson.
Related Coverage
Trump Administration Proposes Stiff Penalties on Steel and Aluminum Imports FEB. 16, 2018
https://www.nytimes.com/2018/02/16/us/politics/trump-administration-recommends-stiff-penalties-on-steel-and-aluminum-imports.html
Peter Navarro, a Top Trade Skeptic, Is Ascendant FEB. 25, 2018
https://www.nytimes.com/2018/02/25/us/politics/peter-navarro-trade.html
Trump Trade Measures Set Off a Global Legal Pushback FEB. 9, 2018
https://www.nytimes.com/2018/02/09/us/politics/trump-trade.html
https://www.nytimes.com/2018/03/01/business/trump-tariffs.html
See also:
Trump’s Trade Pullout Roils Rural America
https://investorshub.advfn.com/boards/read_msg.aspx?message_id=134604425
To link Krugman's Trump, Trade and Workers .. bits ..
Donald Trump .. http://www.nytimes.com/interactive/2016/us/elections/donald-trump-on-the-issues.html?inline=nyt-per .. gave a speech ..
http://www.politico.com/story/2016/06/full-transcript-trump-job-plan-speech-224891 .. on economic policy last week. Just about every
factual assertion he made was wrong, but I’m not going to do a line-by-line critique. What I want to do, instead, is talk about
the general thrust: the candidate’s claim to be on the side of American workers.
[...]
In fact, even as he tried to pose as a populist he repeated the same falsehoods usually used to justify anti-worker policies.
We are, he declared, “one of the highest taxed nations in the world.” Actually, among 34 advanced countries, we’re No. 31 ..
https://stats.oecd.org/Index.aspx?DataSetCode=REV . And, regulations are “an even greater impediment” to our
competitiveness than taxes: Actually, we’re far less regulated than, say, Germany, which runs a gigantic trade surplus.
http://investorshub.advfn.com/boards/read_msg.aspx?message_id=124973814 ..
to your .. Trump’s Trade War May Have Already Begun
http://investorshub.advfn.com/boards/read_msg.aspx?message_id=128351888
https://investorshub.advfn.com/boards/read_msg.aspx?message_id=128438795
Trump’s Pox Americana
https://investorshub.advfn.com/boards/read_msg.aspx?message_id=128183780
"For Americans, Trump’s tariffs on imports could be costly"
By ANA SWANSONMARCH 1, 2018
A steel furnace in Germany. At a White House meeting on Thursday, President Trump said that he did
not want any nation to be exempted from the order.
Credit Alexander Koerner/Getty Images
WASHINGTON — President Trump said on Thursday that he will impose stiff tariffs on imports of steel and aluminum, thwarting some of his top pro-trade advisers and rattling stock markets as the prospect of a global trade fight loomed.
Mr. Trump said he would formally sign the trade measures next week and promised they would be in effect “for a long period of time.” The measures would impose tariffs of 25 percent on steel and 10 percent on aluminum.
The tariffs are expected to apply to all countries, according to an industry executive briefed on the president’s plans. At a White House meeting on Thursday, Mr. Trump told a group of executives that he did not want any nation to be exempted from the order, arguing that if one country was exempt, all other countries would be in line to ask for similar treatment, the executive who attended the meeting said. The president also argued that metals could end up being shipped to the United States through exempted countries.
The trade action stems from a Commerce Department investigation that concluded imported metal threatens national security by degrading the American industrial base.
“People have no idea how badly our country has been treated by other countries,” Mr. Trump said as he made the announcement. “They’ve destroyed the steel industry, they’ve destroyed the aluminum industry, and other industries, frankly.”
“We’re bringing it all back,” he added.
Stocks fell as Mr. Trump made his comments about tariffs, with declines in the industrial sector outpacing the overall market. The Standard & Poor’s 500 industrial sector was down more than 2 percent, compared with the overall benchmark index, which was down a bit less than 1 percent as of around 1:30 p.m. Shares of Boeing and of American automakers, all large consumers of steel and aluminum, declined. Sales for Boeing, the country’s largest exporter, could be hurt as other nations retaliate against tariffs from the United States.
The announcement capped a frenetic and chaotic morning inside the White House as Mr. Trump summoned more than a dozen executives from the steel and aluminum industry to the White House, raising expectations that he would announce his long-promised tariffs.
-
Donald J. Trump
@realDonaldTrump
Our Steel and Aluminum industries (and many others) have
been decimated by decades of unfair trade and bad policy with
countries from around the world. We must not let our country,
companies and workers be taken advantage of any longer. We
want free, fair and SMART TRADE!
11:12 PM - Mar 1, 2018
-
However, the legal review of the trade measure was not yet complete and, as of Thursday morning, White House advisers were still discussing various scenarios for tariff levels and which countries could be included, according to people familiar with the deliberations. Just an hour before Mr. Trump made his remarks, a White House spokeswoman said that no announcement was expected that morning.
Advisers have been bitterly divided over how to proceed on the tariffs, including whether to impose them broadly on all steel and aluminum imports, which would ensnare allies like the European Union and Canada, or whether to tailor them more narrowly to target specific countries.
Imposing tough sanctions would fulfill one of the president’s key campaign promises, but it could tip off trade wars around the globe as other countries seek to retaliate against the United States. Foreign governments, multinational companies and the Pentagon have continued to push against the trade measures, arguing that the proposed tariffs could disrupt economic and security ties .. https://www.nytimes.com/2018/02/25/business/trump-trade-sanctions-aimed-at-china-could-ensnare-canada.html?rref=collection%2Fbyline%2Fana-swanson .
Gary D. Cohn, the director of the National Economic Council, had been lobbying for months alongside others, including Defense Secretary Jim Mattis and Rob Porter, the staff secretary who recently resigned under pressure from the White House, to kill, postpone or at least narrow the scope of the measures, people familiar with the discussions said.
But in recent weeks, a group of White House advisers who advocate a tougher posture on trade has been in ascendance, including Robert E. Lighthizer, the country’s top trade negotiator, and Peter Navarro, a trade skeptic and former steel industry lawyer who had been sidelined but is now in line for a promotion .. https://www.nytimes.com/2018/02/25/us/politics/peter-navarro-trade.html?rref=collection%2Fbyline%2Fana-swanson&action=click&contentCollection=undefined®ion=stream&module=stream_unit&version=latest&contentPlacement=5&pgtype=collection .
The departure of Mr. Porter, who organized weekly trade policy meetings and coordinated the trade advisers, has helped fuel a chaotic situation in which opposing trade factions are no longer kept in check. The situation had descended into an all-out war between various trade advisers, people close to the White House said.
The White House has come to the brink of announcing steel and aluminum tariffs several times in the past eight months, including last June. In recent days, the president appears to have grown impatient for action.
In the past few days, supporters of the tariffs have also begun airing televised ads during programs that Mr. Trump has been known to watch. One such ad ran on Fox News just minutes before the president’s tweet on Thursday morning.
The tariffs have also divided industries, workers and policymakers. American manufacturers of steel and aluminum are among those pushing the White House to take action against cheap imports, which they say have hurt their ability to compete. But American companies that use steel and aluminum in their products, including automakers and food packagers, say that tariffs would raise their costs, eating into their profits or forcing them to raise prices for consumers or lay off workers.
Scott Paul, the president of the Alliance for American Manufacturing, which represents steel companies and workers, said the president made “an encouraging show of support” on Thursday morning but that now was the time for him to act.
“The president’s enforcement action must be broad, robust and comprehensive,” Mr. Paul said. “We urge the president to stand by our nation’s steel communities.”
Roy Hardy, the president of the Precision Metalforming Association, which represents metalworking companies, said the tariffs would imperil “the U.S. manufacturing sector, and particularly downstream U.S. steel and aluminum consuming companies.” He argued that companies that use steel to make their products employ many times more Americans than the domestic steel industry.
Mr. Trump’s announcement seemed likely to tip off a period of fierce lobbying by foreign governments and multinational companies who will argue that their products should be exempted from any sanctions.
The tariff could have very different economic and political consequences, depending on which countries are ultimately affected. Though the president has often criticized China for dumping cheap metals, American restrictions on Chinese steel and aluminum mean the country actually exports little of the products to the United States currently.
Instead, the bulk of American metal imports are supplied by allies. Canada, Brazil, South Korea and Mexico were the largest suppliers of steel to the United States in 2016, while Canada, Russia and the United Arab Emirates shipped the largest share of aluminum imports.
Tadaaki Yamaguchi, a Japanese steel executive and the chairman of the Japan Steel Information Center, called a 25 percent across-the-board tariff “ill-advised and naïve.”
“It will inevitably invite retaliation from America’s most reliable allies, ultimately hurting American non-manufacturing industries as well,” he said.
Mr. Trump’s announcement came on the same day that senior administration officials were scheduled to meet .. https://www.nytimes.com/2018/02/28/us/politics/china-envoy-seeks-to-defuse-tensions-with-us-as-a-trade-war-brews.html .. with China’s top economic adviser, Liu He. The White House has been eager to clamp down on Chinese imports and has several trade measures underway.
The Commerce Department investigation, which was started under an obscure measure of the trade law called Section 232, has focused on whether imports were compromising American national security by degrading the industrial base. In a report released to the public in February, the department concluded that imports were a national security threat.
The Trump administration has already issued tariffs — it imposed restrictions on foreign washing machines and solar panels .. https://www.nytimes.com/2018/01/22/business/trump-tariffs-washing-machines-solar-panels.html?rref=collection%2Fbyline%2Fana-swanson .. in January — but trade analysts said the announcement on steel and aluminum could be the broadest and most significant measure yet from an administration that has vowed to take a substantially different tack on trade.
Trade lawyers have been particularly concerned about the tariffs because they revolve around national security concerns, which legal experts describe as the “nuclear option” of trade. The United States has not used Section 232 to carry out a trade investigation since 2001, and those investigations have only resulted in trade barriers twice in the law’s nearly 40-year history .. https://piie.com/commentary/op-eds/trump-new-kind-protectionist-he-operates-stealth-mode .
The World Trade Organization provides substantial leeway for countries to pursue trade measures in their national security interest, but few countries have tested the extent of those permissions.
Trade experts worry that other countries could follow the United States’ lead and begin using national security concerns to justify a variety of protectionist measures aimed at shutting their industries off from foreign competition. China also uses national security as a justification for trade measures that American industry opposes, like requiring technology companies to store consumer data within Chinese borders.
Alternately, the World Trade Organization could end up ruling against the measures. That might feed an opinion already popular in the Trump administration that the organization seeks to compromise American sovereignty, and lead to its ultimate demise.
Eswar Prasad, a professor of international trade at Cornell University, said the action portended “a period of open and aggressive trade hostilities with some of America’s major trading partners” and threatened to undercut the rules of the World Trade Organization, which the United States itself was instrumental in forming.
------
Follow Ana Swanson on Twitter: @AnaSwanson.
Related Coverage
Trump Administration Proposes Stiff Penalties on Steel and Aluminum Imports FEB. 16, 2018
https://www.nytimes.com/2018/02/16/us/politics/trump-administration-recommends-stiff-penalties-on-steel-and-aluminum-imports.html
Peter Navarro, a Top Trade Skeptic, Is Ascendant FEB. 25, 2018
https://www.nytimes.com/2018/02/25/us/politics/peter-navarro-trade.html
Trump Trade Measures Set Off a Global Legal Pushback FEB. 9, 2018
https://www.nytimes.com/2018/02/09/us/politics/trump-trade.html
https://www.nytimes.com/2018/03/01/business/trump-tariffs.html
See also:
Trump’s Trade Pullout Roils Rural America
https://investorshub.advfn.com/boards/read_msg.aspx?message_id=134604425
To link Krugman's Trump, Trade and Workers .. bits ..
Donald Trump .. http://www.nytimes.com/interactive/2016/us/elections/donald-trump-on-the-issues.html?inline=nyt-per .. gave a speech ..
http://www.politico.com/story/2016/06/full-transcript-trump-job-plan-speech-224891 .. on economic policy last week. Just about every
factual assertion he made was wrong, but I’m not going to do a line-by-line critique. What I want to do, instead, is talk about
the general thrust: the candidate’s claim to be on the side of American workers.
[...]
In fact, even as he tried to pose as a populist he repeated the same falsehoods usually used to justify anti-worker policies.
We are, he declared, “one of the highest taxed nations in the world.” Actually, among 34 advanced countries, we’re No. 31 ..
https://stats.oecd.org/Index.aspx?DataSetCode=REV . And, regulations are “an even greater impediment” to our
competitiveness than taxes: Actually, we’re far less regulated than, say, Germany, which runs a gigantic trade surplus.
http://investorshub.advfn.com/boards/read_msg.aspx?message_id=124973814 ..
to your .. Trump’s Trade War May Have Already Begun
http://investorshub.advfn.com/boards/read_msg.aspx?message_id=128351888
https://investorshub.advfn.com/boards/read_msg.aspx?message_id=128438795
Trump’s Pox Americana
https://investorshub.advfn.com/boards/read_msg.aspx?message_id=128183780
It was Plato who said, “He, O men, is the wisest, who like Socrates, knows that his wisdom is in truth worth nothing”
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