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President Donald Trump listens during a meeting with steel and aluminum executives in the Cabinet Room of the White House on Thursday in Washington. Trump’s announcement that he will impose stiff tariffs on imported steel and aluminum has upended political alliances on Capitol Hill. (AP Photo/Evan Vucci)
By ZEKE MILLER and KEVIN FREKING
Associated Press
WASHINGTON (AP) — President Donald Trump said on Monday that the U.S.’s North American neighbors Canada and Mexico will get no relief from his new tariffs on steel and aluminum imports unless a “new and fair” free trade agreement is signed.
The Trump administration says the tariffs are necessary to preserve the U.S. steel and aluminum industries — and that doing so is imperative for national security. But Trump’s latest tweets suggest he’s also using the tariffs as leverage in ongoing talks to revise the North American Free Trade Agreement. The latest round of a nearly year-long renegotiation effort is concluding this week in Mexico City.
“Tariffs on Steel and Aluminum will only come off if new & fair NAFTA agreement is signed,” Trump tweeted. “Also, Canada must treat our farmers much better. Highly restrictive. Mexico must do much more on stopping drugs from pouring into the U.S. They have not done what needs to be done. Millions of people addicted and dying.”
The tariffs will be made official in the next two weeks, White House officials said Monday, as the administration defended the protectionist decision from critics in Washington and overseas.
Speaking on “Fox and Friends,” White House trade adviser Peter Navarro said: “25 percent on steel, and the 10 percent on aluminum, no country exclusions — firm line in the sand.”
Trump’s pronouncement last week that he would impose tariffs on imported steel and aluminum, roiled markets and rankled allies.
The across-the-board proposal breaks with a recommendation made by the Pentagon, which had pushed for more targeted tariffs on metals imports from countries like China and which warned that a wide-ranging move would jeopardize national security partnerships. But Commerce Secretary Wilbur Ross, whose agency oversaw reviews of the industries that recommended the tariffs, said on Sunday on ABC’s “This Week” that Trump is “talking about a fairly broad brush.”
Republican South Carolina Sen. Lindsey Graham, a Republican, said the sweeping proposal would let China “off the hook,” adding the tariffs would drive a wedge between the U.S. and its allies.
“China wins when we fight with Europe,” he said on CBS’s “Face the Nation.” ”China wins when the American consumer has higher prices because of tariffs that don’t affect Chinese behavior.”
Trump has threatened to tax European cars if the EU boosts tariffs on American products in response to the president’s plan to increase duties on steel and aluminum.
British Prime Minister Theresa May raised her “deep concern” at the tariff announcement in a phone call with Trump on Sunday.
May’s office says she noted that “multilateral action was the only way to resolve the problem of global overcapacity.”
But Ross rejected threats of retaliation from American allies as “pretty trivial” and not much more than a “rounding error.”
And Navarro argued on Monday that “there are virtually no costs here.”
“If you put a 10 percent tariff on aluminum, it’s a cent and a half on a six pack of beer and it’s $25,000 on a $330 million (Boeing 777),” Navarro said.
Trade politics often cut along regional, rather than ideological, lines, as politicians take up the interests of hometown industries and workers. But rarely does a debate open so wide a rift between a president and his party — leaving him almost exclusively with support from his ideological opposites.
Labor unions and liberal Democrats are in the unusual position of applauding Trump’s approach on the grounds it will bolster jobs in a depleted industry, while Republicans and an array of business groups are warning of dire economic and political consequences if he goes ahead with the tariffs.
Trump’s criticism of trade agreements and China’s trade policies found support with white working-class Americans whose wages had stagnated over the years. Victories in big steel-producing states such as Ohio, Pennsylvania and Indiana demonstrated that his tough trade talk had a receptive audience.
Both candidates up for election on March 13 for a House seat representing Pennsylvania have embraced the president’s plans for tariffs. They discussed the topic on Saturday in a debate that was aired on WTAE in Pittsburgh.
“For too long, China has been making cheap steel and they’ve been flooding the market with it. It’s not fair and it’s not right. So I actually think this is long overdue,” said the Democratic candidate, Conor Lamb.
“Unfortunately, many of our competitors around the world have slanted the playing field, and their thumb has been on the scale, and I think President Trump is trying to even that scale back out,” said the Republican candidate, Rick Saccone.
But Trump’s GOP allies on Capitol Hill have little use for tariffs. They argue that other industries that rely on steel and aluminum products will suffer. The cost of new appliances, cars and buildings will rise if the president follows through, they warn, and other countries might retaliate. The end result could erode the president’s support in rural America, even among the blue-collar workers the president says he trying to help.
“There is always retaliation, and typically a lot of these countries single out agriculture when they do that. So, we’re very concerned,” said Sen. John Thune, R-S.D.
Gov. Scott Walker, R-Wis., asked the administration to reconsider its stance. He said American companies could move their operations abroad and not face retaliatory tariffs.
“This scenario would lead to the exact opposite outcome of the administration’s stated objective, which is to protect American jobs,” Walker said.
Tim Phillips, president of the Koch Brothers-backed Americans for Prosperity, noted that Trump narrowly won in Iowa and Wisconsin, two heavily rural states that could suffer if countries impose retaliatory tariffs on American agricultural goods.
“It hurts the administration politically because trade wars, protectionism, they lead to higher prices for individual Americans,” Phillips said. “It’s basically a tax increase.”
