Trump Rolling Out Trade Tariffs, Sparing Mexico, Canada

WASHINGTON (CN) – Defying the wishes and warnings of congressional Republicans and business groups, President Donald Trump on Thursday announced new tariffs on imported steel and aluminum.

The orders Trump unveiled at the White House on Thursday put in place a 25 percent tariff on steel imports and a 10 percent tariff on aluminum. Mexico and Canada are initially exempted from the tariffs, but Trump threatened the tariffs will snap into place if the countries cannot reach an agreement on the current NAFTA negotiations.

A senior administration official also said the tariffs will be “flexible” and that other countries will have the chance to make the case to U.S. Trade Representative Robert Lighthizer that they too should be exempt.

Trump suggested the United States will take into account a country’s military contributions when determining whether to exempt it from tariffs.

“We subsidize may rich countries with our military,” Trump said Thursday. “They pay not 100 cents on the dollar in some cases, not 50 cents on the dollar and they’re massively wealthy countries. So we have to stop that. And that will enter into the equation.”

Both tariffs take effect in 15 days.

The 25 percent tariff is one percentage point higher than the figure the Commerce Department recommended in February, while the aluminum tariff exceeds the department’s recommendation by roughly two points.

Trump cited national security concerns in justifying the tariffs, saying the U.S. relies on both materials to build military ships and equipment and that a burgeoning steel industry is important for the nation’s security. The 1962 Trade Expansion Act gives the president the authority to impose tariffs on goods if doing so is in the interest of national security, though the law is rarely used.

“The actions we are taking today are not a matter of choice, they’re a matter of necessity for our security,” Trump said.

Congressional Republicans, including Speaker of the House Paul Ryan, R-Wis., and Senate Majority Leader Mitch McConnell, R-Ky., have vocally opposed the tariffs in recent days, with more than 100 GOP members of the House of Representatives sending a letter to Trump on Wednesday asking him to back down.

Economists and trade experts have expressed concern that Trump’s tariffs could spark a trade war as other countries respond to the move in kind. European Union Trade Commissioner Cecilia Malmstrom on Wednesday warned the EU could respond by puttin in place its own tariffs on U.S. products like bourbon, peanut butter and cranberries.

The World Trade Organization’s rules allow countries to impose tariffs for national security reasons and experts  warn the United States using the justification could give other countries more room to do the same. Malmstrom on Wednesday said the EU has “serious doubts” about the justifications for Trump’s tariffs and that she is skeptical they will clear WTO rules.

David Gantz, a law professor at the University of Arizona who focuses on trade, said in an interview that countries have traditionally avoided imposing tariffs on national security grounds precisely for this reason.

“If the U.S. says well, this is national security, what’s to prevent China or Russia deciding that something they’re going to do is national security six months from now or a year from now?” Gantz said. “So, there’s no way to close the barn door once that horse gets out.”

Congress has no oversight authority under the Trade Expansion Act to challenge Trump’s tariffs, giving Republicans who oppose the plan little legislative recourse. Trump would likely not sign a law stripping him of his authority to set tariffs and too many Democrats are sympathetic to the trade policy to make a veto override plausible, Gantz said.

Lawmakers could choose to file a lawsuit claiming the tariffs on steel and aluminum exceed the authority Congress granted the president in the law, but courts would likely stay out of the issue out of their tradition of letting the executive and legislative branches settle political questions, Gantz said.

“Basically I don’t think there’s a lot the Congress could do except put some pressure on,” Gantz said.

Sen. Jeff Flake, an Arizona Republican who has been critical of Trump, announced in a press release shortly after the White House announcement that he plans to introduce a bill that would nullify the Trump tariffs.

“These so-called ‘flexible tariffs’ are a marriage of two lethal poisons to economic growth – protectionism and uncertainty,” Flake said in a statement. “Trade wars are not won, they are only lost. Congress cannot be complicit as the administration courts economic disaster. I will immediately draft and introduce legislation to nullify these tariffs and I urge my colleagues to pass it before this exercise in protectionism inflicts any more damage on the economy.”

Ryan likewise criticized the tariffs, saying he is concerned about their broader impacts on the economy.

“I disagree with this action and fear its unintended consequences,” Ryan said in a statement. “I am pleased that the president has listened to those who share my concerns and included an exemption for some American allies,  but it should go further.”

In a speech on the Senate floor before the announcement Thursday, Senate Minority Leader Chuck Schumer, D-N.Y., said while the “instincts” Trump has shown in enacting the tariffs are correct, the actual orders are too broad.

“Both Democrats and Republicans have been blind to this and President Trump isn’t,” Schumer said. “But I would say to you Mr. President, don’t swing blindly and wildly at our foe, China, establish a well-placed jab at China. Set them back. Let them know we mean business. President Trump ought to rethink his plan so it actually achieves what he says he wants it to achieve.”

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