Trump Moving Ahead on Tariffs

President Sees Need for Fairness as Agriculture Fears Retaliation

Chris Clayton
By  Chris Clayton , DTN Ag Policy Editor
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President Donald Trump planned to sign tariffs on imports of steel and aluminum Thursday afternoon. (DTN photo of White House by Nick Scalise; Donald Trump courtesy photo)

WASHINGTON (DTN) -- President Donald Trump moved ahead Thursday with proclamations to impose global tariffs on steel and aluminum imports despite warnings from much of the business community and lawmakers in Congress.

According to the White House, the president planned to sign proclamations at an afternoon event setting a 25% tariff on steel and a 10% tariff on aluminum. For now, Canada and Mexico would be exempted from those tariffs pending the outcome of the current renegotiation of the North American Free Trade Agreement. The president said at a cabinet event regarding Canada and Mexico, "We're going to be quite flexible."

Trump tweeted earlier Thursday about a meeting with leaders in the steel industry when the proclamations were to be signed. "Looking forward to 3:30 p.m. meeting today at the White House. We have to protect & build our Steel and Aluminum Industries while at the same time showing great flexibility and cooperation toward those that are real friends and treat us fairly on both trade and the military," Trump tweeted.

The president also said he would have the flexibility to raise and lower those tariffs country-by-country as needed. The president also suggested he could also create a carve-out for Australia.

"I'll have a right to go up or down depending on the country," Trump said.

The tariffs caused an internal rift in the White House, leading economic adviser Gary Cohn to resign while another adviser, Peter Navarro, a trade protectionist, became more visible this week with television appearances defending the president's actions. Navarro said earlier in the week the U.S. actions would ideally force change in the way the U.S. is treated by the World Trade Organization.

"The best-case scenario is the world wakes up to the fact that we're not going to take it anymore," Navarro said on NBC's Meet the Press. "We want fair and reciprocal trade, and the World Trade Organization needs to adapt accordingly."

Trump imposed the tariffs despite 107 Republican lawmakers sending him a letter on Wednesday asking the president to reconsider his plan. The congressmen wrote the letter "to express deep concern" about the tariffs. The congressmen said tariffs are taxes that make U.S. businesses less competitive and any tariffs should be constructed in a way that minimizes the impact on businesses and consumers. Further, specific congressional delegations such as Iowa and Missouri also sent letters to the president expressing worries about specific impacts on their individual states.

China is the largest exporter of steel, and a target of the White House ire for dumping steel on the global market. Still, Canada is the largest exporter of steel to the U.S., accounting for 16% of imports and Brazil is the second-largest steel exporter to the U.S. at 13% of all imports. South Korea also exports 10% of U.S. steel imports while Mexico and Russia each send 9%, according to a report Thursday by the New York Times.

Agricultural groups have expressed varying levels of fear over retaliation. The National Grain and Feed Association, along with the American Soybean Association, both pointed to worries about how other trading partners will react.

"These tariffs are very likely to accelerate a tit-for-tat approach on trade, putting U.S. agricultural exports in the cross-hairs," said Brian Kuehl, executive director of Farmers for Free Trade, in a statement. "Already we have seen China discuss tariffs on sorghum. The EU and China have also indicated they will move forward with swift retaliation in the wake of these tariffs."

European Union officials on Wednesday threatened to impose counter-tariffs against the U.S. for as much as $3.52 billion in value on goods, including roughly $1 billion in agricultural imports from the U.S.

Agriculture Secretary Sonny Perdue has been among those expressing concerns about retaliation against agricultural products. He also said on Wednesday that retaliation isn't the only concern for agriculture.

"As you know, farm equipment is manufactured with steel and aluminum and we're concerned about not only retaliation but also the costs of other inputs as we go forward," Perdue said.

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Chris Clayton