President Donald Trump remains on course to impose tariffs on steel and aluminum imports from around the world by the end of the week, despite threats that other countries will retaliate and Republican warnings the move could hurt the U.S. economy, senior U.S. officials said on Sunday.
“I don’t know exactly what day because the lawyers are working away, but sometime this week,” Commerce Secretary Wilbur Ross said on ABC’s “This Week.”
Both Ross and White House trade officer Peter Navarro, who appeared on several Sunday news shows, said they had no reason to believe that Trump would exclude allies such as Canada, the European Union, Japan and South Korea from the proposed 25 percent tariff on steel and 10 percent tariff on aluminum.
“As soon as he starts exempting countries, he has to raise the tariff on everybody else,” Navarro said in a combative interview on “Fox News Sunday.” “As soon as he exempts one country, his phone starts ringing from the heads of state of other countries.”
However, Navarro said there would be a process through which companies could ask for a particular steel or aluminum product to be exempted from tariffs if they cannot get it from a domestic producer.
“There will be an exemption procedure for particular cases, where we need to have exemptions, so that business can — can move forward. But, at this point in time, there will be no country exclusions,” Navarro said on CNN’s “State of the Union.”
Trump is imposing the tariffs as a result of a nine-month investigation that found that current volumes of steel and aluminum imports are a threat to national security because they undermine the long-term viability of both industries. But most other nations see that as a thinly disguised excuse to take protectionist measures.
His announcement that he planned to impose tariffs came amid a bitter fight inside the White House between officials who believe in free trade, as many Republicans do, and those who want to aggressively crack down on what they see as unfair practices. Despite the strong commentary from Navarro and Ross on Sunday, the free-trade types inside the administration, led by National Economic Council director Gary Cohn, hope they still have time to change Trump’s mind, according to people close to them.
The officials believe the White House will ultimately allow significant exemptions and will not impose the tariffs across the board. Cohn threatened to quit last week if Trump entered a full-scale trade war but did not view the president’s brief remarks on Thursday as a final straw, according to a person familiar with his thinking.
Cohn and some other officials at the National Economic Council and inside the Treasury Department, are continuing to make to the case to Trump that blunt tariffs will damage the U.S. economy, tank the stock market and invite fierce retaliation from Europe, Mexico, Canada and other key U.S. allies.
British Prime Minister Theresa May discussed the issue in a phone call with Trump on Sunday 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,” a spokesperson for May’s office said.
The European Union has threatened to retaliate on 2.8 billion euros worth of American exports if Trump moves ahead with the steel and aluminum tariffs, targeting products such as bourbon made in the home state of Senate Majority Leader Mitch McConnell (R-Ky.) and Harley-Davidson motorcycles from the home state of House Speaker Paul Ryan (R-Wis.).
Trump upped the ante Saturday, threatening to raise tariffs on the EU’s auto exports to the United States if it retaliates against steel and aluminum tariffs.
The prospect of a trans-Atlantic trade war prompted two senators on Sunday to caution that Moscow and Beijing would be the prime beneficiaries.
“The president’s new enthusiasm for opening up a trade war with Europe is also a gift to Russia, which loves it when the United States and Europe start to split,” Sen. Chris Murphy (D-Conn.) said on “This Week.”
Sen. Lindsey Graham (R-S.C.) underscored that point, since the proposed tariffs would hit China relatively lightly, even though it is widely blamed for creating turmoil in global steel and aluminum markets by ramping up production over the past 20 years.
“You’re letting China off the hook. China wins when we fight with Europe,” Graham said on CBS’ “Face the Nation.”
Canada, which is a leading supplier of both steel and aluminum to the United States, has also threatened to take action if Trump curbs its exports. Many other countries, such as Mexico, are closely watching Trump and could follow the EU’s lead.
Ross brushed off that concern, saying any retaliation would barely make a dent in the $19-trillion-dollar U.S. economy.
“Sure, there may well be some sort of retaliation, but the amounts that they are talking about are also pretty trivial,” Ross said. “It’s some $3 billion-odd of goods that the Europeans have threatened to put something on. Well, in our sized economy, that’s a tiny, tiny fraction of 1 percent. So, while it might affect an individual producer for a little while, overall it’s not going to be much more than a rounding error.”
The commerce secretary also repeated the Trump administration’s frustration with the difference between overall tariff levels in the United States and other countries around the world.
Some of that disparity reflects the United States’ willingness to open its markets to foreign goods in the years after World War II to help other countries recover from the ravages of the war. That may have been good policy at the time, Ross said, but not anymore.
“Concessions that were perfectly reasonable to Germany in 1945 or China in 1945 don’t make sense anymore. Those are now very mature, big, strong economies, so there’s a lot of history that needs to be undone,” Ross said.
Senior Republicans, such as Ryan and Senate Finance Committee Chairman Orrin Hatch (R-Utah), have criticized Trump’s plan, which they believe hits too many friends and allies, when China is really to blame for global excess capacity in the steel sector.
Business Roundtable President and CEO Joshua Bolten, a chief of staff for former President George W. Bush, said on “Fox News Sunday” that the proposal was a “huge mistake” that would cause “huge damage across broad sectors of the economy.”
But both Ross and Navarro said critics were exaggerating the potential negative impact of higher steel and aluminum prices on other industries that rely on the products, such as automakers and beer and soft drink companies.
“On an average car, $175 worth of steel increase is the maximum that would come from a 25 percent tariff increase. That’s not much,” Ross said.
The combined cost of a 25 percent steel tariff and 10 percent aluminum tariff is “about $9 billion in a year,” Ross continued. “That’s a fraction of 1 percent of the economy. So, the notion that it would destroy a lot of jobs, raise prices, disrupt things, is wrong.”