Trump Drops Hammer on Foreign Steel and Aluminum
President follows through on tariff pledge on Thursday but promises 'flexibility' for American allies; new levies take effect in 15 days
Surrounded by steelworkers in hardhats, President Donald Trump on Thursday signed papers putting long-promised tariffs into place.
The tariffs, which will take effect in 15 days, will hit some foreign-made steel with 25 percent levies and aluminum with a 10 percent tax. In a bow to aides favoring a more cautious approach, the president said the tariffs will — for now — exempt Canada and Mexico.
U.S. Trade Representative Robert Lighthizer will be charged with deciding other exemption requests on a case-by-case basis.
“Steel is steel. You don’t have steel, you don’t have a country,” Trump said, nearly repeating a line he has said earlier. “Our industries have been targeted for years and years — decades, in fact — by unfair foreign trade practices, leading to the shuttered plants and mills, the layoff of millions of workers and the decimation of entire communities. And that’s going to stop.”
Workers invited to the White House for the ceremony offered personal testimonials.
“My father worked in the industry, worked at that plant for 40 years. So this hits home for all of us in Hawesville,” said Dusty Stevens, who noted that his factory in Kentucky is running at a 40 percent capacity right now.
Scott Sauritch, a union leader from Pennsylvania, recalled how his father lost his job in the 1980s because of foreign imports.
“I never forgot that — looking into his eyes, my household, what that does to a family,” said Sauritch.
Ron Davis said his plant in Conshohocken, outside of Philadelphia, produced a majority of the armor for Humvees in 2009.
“It’s sad to say, [but] with all these imports coming into our country, our plant’s going to be idle in September,” he said. “At one time, our plant had 400 members. We’re gonna be down to about 71.”
Free-trade advocates slammed Trump, however. David Stockman, who served as former President Ronald Reagan’s budget director, told CNN that indiscriminate tariffs would raise prices for consumers and hurt the economy.
“The steel industry are the crybabies of the Beltway lobby farm,” said Stockman. “They gang-tackle every new president that comes in with their tale of woe. In this case, they’ve got the biggest sucker yet. And this whole thing is a giant mistake.”
But critics of America’s chronically large trade deficits offered praise.
“They’re a good first step but only a step,” said Kevin Kearns, president of the U.S. Business and Industry Council.
Kearns, who represents privately held manufacturing companies, called on the Federal Reserve Board to aggressively intervene in currency markets to prevent the dollar from becoming too strong. He said the United States also should adopt a border adjustment tax or a value-added tax, like many trade partners have, to counter a situation in which U.S. exports get hit with an extra tax while imports do not.
And the U.S. needs a well-developed industrial and technology policy as Japan and Germany have, Kearns said.
“We can’t leave it all to the free market,” he said.
Curtis Ellis, who served as a campaign adviser and Trump transition team official, called the tariffs “a tremendous step forward. It’s absolutely necessary and justified.”
Ellis, senior policy adviser for America First Policies — a group formed in 2017 to promote Trump’s agenda — said it makes sense to allow exceptions for countries like Mexico and Canada. But he downplayed concerns about the impact on consumers and domestic manufacturers that use steel and aluminum.
He said it makes no sense to rely on a free trade theory developed in the 18th century to set trade policy in the 21st.
The president’s decision comes after his Commerce Department conducted a nine-month review of America’s defense-industrial infrastructure.
“Here’s a newsflash: The world is complicated,” he said.
The president’s decision comes after his Commerce Department conducted a nine-month review of America’s defense-industrial infrastructure. Trump noted that America has lost six aluminum smelters since 2012 and now imports 90 percent of its aluminum.
Meanwhile, the president said, two-thirds of the country’s raw steel companies have gone out of business, and more than a third of steel jobs have evaporated.
“But the politicians never did anything about it … Our factories were left to rot and rust all over the place,” he said.
Trump said tough trade policies already are making a difference. He noted that Century Aluminum will reopen and upgrade its idled military-grade aluminum plant in Kentucky and hire 300 workers. Meanwhile, U.S. Steel Corp. said it would reopen a closed mill in Illinois.
The president offered some flexibility for trading partners, suggesting relief would be determined by both military and economic ties — including “who’s paying the bills, who’s not paying the bills,” a likely reference to past Trump complaints about North Atlantic Treaty Organization (NATO) alliance members that are not devoting enough money to defense.
As for Canada and Mexico, Trump said, the long-term prospects of tariffs hinge on a renegotiation of the North American Free Trade Agreement (NAFTA).
“If we don’t make the deal on NAFTA, and if we terminate NAFTA because they’re unable to make a deal that’s fair for our workers … then we’re going to terminate NAFTA and start all over again,” he said.
As for complaints from companies opposed to the tariffs, Trump delivered a simple message: “You don’t want to pay tax, bring your plant to the USA. There’s no tax.”