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March 08, 2018 at 04:27 PM
President Donald Trump followed through on his pledge to impose stiff tariffs on imported steel and aluminum, while excluding Canada and Mexico and leaving the door open to sparing other countries on the basis of national security.
The president signed a proclamation authorizing the tariffs at a meeting Thursday afternoon with workers from the steel and aluminum industries. The U.S. will levy a 25 percent duty on steel and 10 percent on aluminum, the same level Trump promised when he revealed the plan March 1, according to a senior administration official who briefed reporters before the signing. The tariffs will take effect in 15 days, the official said.
“Today I’m defending America’s national security by placing tariffs on foreign imports of steel and aluminum,” Trump said, flanked by workers from the industries and economic advisors who had backed the plan.
The president said U.S. political leaders preceding him had allowed the decline of manufacturing in the nation, and cited a protectionist predecessor, President William McKinley, in defense of the tariffs. “Our factories were left to rot and to rust all over the place,” Trump said.
Gary Cohn, the National Economic Council director who announced his resignation on Tuesday after failing to persuade Trump against the tariffs, stood in the back of the room.
Exempting some nations marks a compromise from Trump’s initial plan for across-the-board tariffs, which was harshly criticized by members of his own Republican party who said it would cost U.S. jobs, raise consumer prices and hit American manufacturers. Trading partners including the European Union threatened retaliation, triggering fears of a trade war. International Monetary Fund Managing Director Christine Lagarde said no one wins in a trade battle and warned the proposed tariffs could have a serious negative economic impact.
Message Received
The message appeared to get through. Trump agreed to exclude Canada and Mexico from the duties because of their status as key regional allies and partners with the U.S. in renegotiating a new North American Free Trade Agreement, said the official, who spoke on condition of anonymity. Any U.S. trade partner has the option of asking to be excluded from the tariffs, the official said, and allies could be excluded if they can demonstrate how the tariffs would damage their national security.
U.S. aluminum and steel stocks, which had declined earlier Thursday, continued to trade lower as Trump prepared to comment on his administration’s import tariffs plan.
U.S. Steel Corp. was down 2.8 percent at 3:30 p.m. in New York, after earlier falling as much as 4.6 percent, while Nucor Corp., the largest American producer, dropped 2.9 percent. Alcoa Corp., the biggest U.S. aluminum producer, was down 1 percent after declining as much as 2.8 percent, while Century Aluminum Co. was down 7.1 percent.
The prospect of further exclusions should trigger a push by U.S. allies in Europe, Australia and elsewhere to lobby for similar treatment to Canada and Mexico.
