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Trump orders stiff trade tariffs, unswayed by grim warnings

By Ken Thomas, Associated Press | Posted - Mar. 8, 2018 at 6:49 p.m.


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WASHINGTON (AP) — Unswayed by Republican warnings of a trade war, President Donald Trump ordered steep new tariffs on steel and aluminum imports to the U.S. on Thursday, vowing to fight back against an "assault on our country" by foreign competitors. The president said he would exempt Canada and Mexico as "a special case" while negotiating for changes to the North American Free Trade Agreement.

The new tariffs will take effect in 15 days, with America's neighbors indefinitely spared "to see if we can make the deal," Trump said. He suggested in an earlier meeting with his Cabinet that Australia and "other countries" might be spared, a shift that could soften the international blow amid threats of retaliation by trading partners.

Those "other countries" can try to negotiate their way out of the tariffs, he indicated, by ensuring their trade actions do not harm America's security.

Surrounded by steel and aluminum workers holding hard hats, Trump cast his action as necessary to protect industries "ravaged by aggressive foreign trade practices. It's really an assault on our country. It's been an assault."

His move, an assertive step for his "America First" agenda, has rattled allies across the globe and raised questions at home about whether protectionism will impede U.S. economic growth. The president made his announcement the same day that officials from 11 other Pacific Rim countries signed a sweeping trade agreement that came together after he pulled the U.S. out of the Trans-Pacific Partnership last year.

Though he focused on workers and their companies in his announcement, Trump's legal proclamation made a major point that weakened steel and aluminum industries represent a major threat to America's military strength and national security.

The former real estate developer said U.S. politicians had for years lamented the decline in the steel and aluminum industries but no one before him was willing to take action.

Despite a week of furious lobbying against his plan by Republican lawmakers and some of his own advisers, Trump said he would go ahead with penalty tariffs of 25 percent on imported steel and 10 percent on aluminum. But he also said the penalties could "go up or down depending on the country, and I'll have a right to drop out countries or add countries. I just want fairness."

Century Aluminum Chief Executive Michael Bless said the tariffs would allow his company, which produces high-purity aluminum used in military aircraft, to recall about 300 workers and restart idled production lines at its smelter in eastern Kentucky by early 2019. And Trump took note of U.S. Steel's announcement that it planned to ramp up activity at its plant in Granite City, Illinois, and recall about 500 employees because of the new tariffs.

But there was political criticism aplenty, especially from Trump's own Republican Party.

House Speaker Paul Ryan, appearing with Home Depot employees in Atlanta, warned of "unintended consequences." And Sen. Ron Johnson of Wisconsin called the tariffs "a very risky action" that could put agricultural and manufacturing jobs at risk.

"I'm not sure there are any winners in trade wars," said Johnson, who once ran a plastics manufacturing business in his home state.

Democratic Sen. Dick Durbin of Illinois said Trump's action was "like dropping a bomb on a flea" and could carry "huge unintended consequences for American manufacturers who depend on imported materials."

Business leaders, too, sounded their alarm about the potential economic fallout, warning that American consumers would be hurt by higher prices. They noted that steel-consuming companies said tariffs imposed in 2002 by President George W. Bush ended up wiping out 200,000 U.S. jobs.

"Tariffs are taxes, and the American taxpayer will pay the cost of a trade war," said Cody Lusk, president and CEO of the American International Automobile Dealers Association. "Even with limited exemptions, tariffs will raise the sale prices of new vehicles."

Stocks ended the day higher after the announcement, with investors relieved by the carved out exceptions for key allies.

At the White House, an upbeat Trump chatted with the steelworkers, invited them to the Oval Office and autographed a hard hat. He invited some of the workers to speak from the presidential podium, and several said that excessive "dumping" of foreign steel and aluminum had negatively affected their jobs and families.

Nations around the globe that were not excluded from the tariffs reacted with dismay.

The European Union warned before the announcement that it was ready to retaliate with counter-measures against iconic U.S. products such as Harley Davidson motorcycles, Levi's jeans and bourbon.

EU Trade Commissioner Cecilia Malmstrom tweeted after Trump's announcement that "the EU should be excluded from these measures." Malmstrom said she would be meeting with U.S. Trade Representative Robert Lighthizer in Brussels on Saturday.

The British government said tariffs "are not the right way to address the global problem of overcapacity" and said it would work with EU partners "to consider the scope for exemptions outlined today." Japanese Foreign Minister Taro Kono called the decision "extremely regrettable," predicting it could have a major impact on the economy and the relationship between the U.S. and Japan, as well as the global economy.

Canadian Foreign Minister Chrystia Freeland, meanwhile, called the announcement a "step forward" and said Canadian officials had exerted tremendous efforts to get the exemption. "That Canada could be seen as a threat to U.S. security is inconceivable," she said.

The exemptions for Canada and Mexico could be ended if talks to renegotiate NAFTA stall, the White House said. The talks are expected to resume early next month.

The run-up to Thursday's announcement included intense debate within the White House, pitting hard-liners against free trade advocates such as outgoing economic adviser Gary Cohn. Recent weeks have seen other departures and negative news stories that have left Trump increasingly isolated, according to senior officials speaking on the condition of anonymity to discuss internal discussions.

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Associated Press writers Lisa Mascaro, Darlene Superville, Jill Colvin, Zeke Miller, Martin Crutsinger and Alan Fram in Washington, Scott Bauer in Madison, Wisconsin, and Rob Gillies in Toronto contributed to this report.

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Follow Ken Thomas on Twitter at https://twitter.com/KThomasDC

Copyright © The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

"We're going to be very fair, we're going to be very flexible but we're going to protect the American worker as I said I would do in my campaign," Trump said during a Cabinet meeting.

The president reiterated that he would levy tariffs of 25 percent on imported steel and 10 percent on aluminum but would "have a right to go up or down depending on the country and I'll have a right to drop out countries or add countries. I just want fairness."

The president indicated Canada and Mexico's treatment would be connected to the ongoing NAFTA talks, which are expected to resume in early April.

The people briefed on the plans said all countries affected by the tariffs would be invited to negotiate with the Trump administration to be exempted from the tariffs if they can address the threat their exports pose to U.S. manufacturers. The people said the exclusions for Canada and Mexico could be ended if talks to renegotiate NAFTA stall.

The process of announcing the penalties has been the subject of an intense debate and chaotic exchanges within the White House, pitting hard-liners against free trade advocates such as outgoing economic adviser Gary Cohn aiming to add more flexibility for U.S. trading partners.

The fight over tariffs comes amid intense turmoil in the West Wing, which has seen waves of departures and negative news stories that have left Trump increasingly isolated in the Oval Office, according to two senior officials speaking on the condition of anonymity to discuss internal thinking. Trump was still hearing last-minute pleas from opponents of the tariff plan, and White House officials said they couldn't predict how the day would shake out.

Steel and aluminum workers were invited to the White House for the afternoon announcement with Trump.

Congressional Republicans and business groups are bracing for the impact of the tariffs and the departure of Cohn, a former Goldman Sachs executive who has opposed them.

House Speaker Paul Ryan, appearing at a session with Home Depot employees in Atlanta, said ahead of Trump's announcement, "I'm just not a fan of broad-based, across-the-board tariffs." He pointed to the store's many products that rely on steel and aluminum.

More than 100 House Republicans wrote Trump on Wednesday, asking him to reconsider "the idea of broad tariffs to avoid unintended negative consequences" to the U.S. economy and workers.

Arizona Sen. Jeff Flake, a Republican, said he plans to introduce legislation next week to nullify the tariffs though he has acknowledged that finding the votes to stop the president's actions could be difficult.

Business leaders, meanwhile, continue 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.

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 renegotiate NAFTA, suggesting Canada and Mexico might be exempted from tariffs if they offer more favorable terms under the trade agreement.

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Associated Press writers Lisa Mascaro, Darlene Superville, Zeke Miller, Matthew Daly and Alan Fram in Washington and Lorne Cook in Brussels contributed to this report.

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Follow Ken Thomas on Twitter at https://twitter.com/KThomasDC

Copyright © The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

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