Trump administration officials are scrambling to finalize the president’s proposed steel and aluminum tariffs by the end of the week amid fierce opposition from congressional Republicans and frenzied negotiations with world leaders.
Republican lawmakers have lobbied President Trump to narrow the scope of his tariffs or choose a tactic that poses fewer economic risks after he announced his plan to tax all imported steel and aluminum, regardless of origin, in order to protect American manufacturing.
Trump has softened his tone on the tariffs this week in the face of withering opposition from U.S. allies and members of his own party. Other senior administration officials have worked to calm political and market unrest by walking back Trump’s threat to apply the tariffs universally, instead suggesting countries can negotiate their way to an exemption.
But Trump’s insistence that his administration finalize the tariffs by Friday has left American allies with little time to strike a deal that prevents their metals from facing the tax when exported to the U.S. And the truncated timeline has put pressure on a process that was already fraught with internal disagreements and confusion, leaving some senior aides rushing to push through a policy they have long fought to kill.
The resignation on Tuesday of Gary Cohn, Trump’s top economic adviser, heartened some of Trump’s populist allies — many of whom had long harbored suspicions about Cohn’s fidelity to the Trump agenda.
“America is doing a victory lap,” one former Trump campaign hand told the Washington Examiner after exalting that Cohn “didn’t stop tariffs.”
However, Cohn’s departure could heighten concerns about Trump’s protectionist tendencies. Cohn was reputedly one of the most influential internal critics of tariffs. His unexpected exit this week was widely perceived as a sign that the National Economic Council chair had surrendered the fight against Trump’s tariffs.
Tony Fratto, a former Treasury Department official in the Bush administration, said Cohn’s abrupt resignation and the chaotic way Trump has rolled out his tariff proposal suggests the policy process has broken down inside the West Wing.
“To me, the most important part of NEC director’s job is to run the policy process. There are way too many issues for a White House to deal with to just allow people to make policy by walking through one of the doors of the Oval Office,” Fratto told the Washington Examiner. “It looks like that’s exactly what happened here.”
Fratto predicted Cohn’s replacement “will want guarantees” that the policy process will never again unravel at a crucial decision point, as it appears to have done over the past week.
“It’s impossible to do the that job if people can hack the process and cut out other key people in government,” Fratto said. “For example, I don’t know if the Treasury secretary was able to debate the decision before it was made, but he’s first in line in dealing with leaders of other economies. I’m sure his phone was ringing off the hook when the tariff decision was announced.”
Meanwhile, GOP members have spent the week attempting to persuade Trump to slow down and consider a more refined strategy for addressing trade deficits.
House Speaker Paul Ryan, R-Wis., advocated on Tuesday for a “more surgical approach” that targets “the true abusers” of international trade law while avoiding the “unintended consequences” of a trade war or job losses in other industries.
“We’ve had multiple conversations about this,” Ryan said of Trump. “He knows our view.”
Sen. David Perdue, R-Ga., was among a handful of lawmakers who met Tuesday with White House chief of staff John Kelly about trade, an aide told the Washington Examiner. That aide highlighted Perdue’s successful role last year in keeping the proposed border adjustment tax out of the bill Republicans ultimately passed in December.
As the White House and GOP lawmakers prepared to turn their attention from healthcare to tax reform last summer, House Republican leaders proposed a border adjustment tax — a tax on imported products — as a way to offset the revenue loss that corporate tax cuts would cause. Trump, once against the idea, was seemingly beginning to warm up to the measure before Perdue personally intervened and helped convince Trump to stick to his original opposition. GOP leaders eventually scrapped the proposal.
Republicans on Capitol Hill have expressed optimism that Trump’s threat to impose tariffs could evolve the way his campaign-era threats to tear up NAFTA or pull out of the North Atlantic Treaty Organization did. In both cases, Trump has retreated to more nuanced positions that left American trade and security relationships intact and avoided the cataclysmic results his critics predicted.
Members of Trump’s Cabinet have already shown signs that the administration is inclined to shield key trading partners from the tariffs, which Trump initially pitched as a 25 percent tariff on all steel imports and a 10 percent tariff on all aluminum imports.
Treasury Secretary Steve Mnuchin told lawmakers on Tuesday that the administration remains open to exempting Canada and Mexico from the duties if both countries concede to more favorable terms for the U.S. during North American Free Trade Agreement talks. Trump has also signaled his willingness to spare Canada and Mexico from the tariffs if they agree to a “fair” NAFTA, although it is unclear whether either country would have enough time to meet the president’s demands before the administration finalizes the tariffs this week if the duties took effect immediately.
Commerce Secretary Wilbur Ross took that sentiment further on Wednesday, suggesting any country willing to negotiate favorably with the administration could avoid facing Trump’s tariffs on the metals they export to the U.S.
“The president indicated that if we can work something out with Canada and Mexico, they will be exempted,” Ross told Bloomberg in an interview Wednesday morning. “It’s not inconceivable that others could be exempted on a similar basis.”
And Trump’s tweet Wednesday about confronting China over its trade deficit with the U.S. was another signal the president may be responding to Republicans’ pleas that he focus his efforts on the countries responsible for the global steel glut rather than punish all trading partners for it equally.
The White House was urging allies to highlight the president’s “consensus…that there should be no country exclusions” in messaging guidance circulated as recently as Monday, according to talking points obtained by the Washington Examiner.
But in talking points sent to allies on Wednesday, the White House had shifted to emphasizing the likelihood that Canada would receive an exemption from the duties.
“[A]ssuming we get a new NAFTA deal done,” the talking points noted, “Canada will be exempted.”
Trump and Canadian Prime Minister Justin Trudeau spoke about trade Monday evening after Trudeau dialed the White House to lodge his concerns about the coming tariffs, according to Canadian media. The two leaders also discussed NAFTA, although neither country has revealed details about which terms they might rework in order to satisfy Trump’s requests.
Ford O’Connell, a Republican strategist, compared the evolution of Trump’s tariff proposal to the way his gun control ideas have fluctuated in meetings over the past month.
“I look at this a lot like gun negotiations with the GOP,” O’Connell said. “Trump is going to look for the sweet spot.”
