President Trump on Thursday signed a pair of executive orders to impose tariffs on steel and aluminum imports from all countries that will exclude Canada and Mexico, and give him plenty of options for future changes — including a possible increase in the tariff levels — depending on U.S. economic conditions and the actions of other U.S. trading partners.
Surrounded by steelworkers and members of his Cabinet, the president signed the controversial order after days of confusion and backlash among lawmakers and administration officials, many of whom complained publicly or to colleagues about the hastiness of the process and the potential disadvantages new tariffs could bring to a variety of industries and their states.
“I’m delivering on a promise I made on the campaign and a promise I’ve been making for a good part of my life,” Trump said, claiming the tariffs would begin to correct a “long overdue problem” of massive deficits and unfair trade practices by other countries.
A senior administration official briefed reporters ahead of the signing on Thursday, describing the tariffs of 25 percent and 10 percent on steel and aluminum imports as “absolutely essential to our economic and national security.”
“This has been extremely and carefully vetted, well-litigated, and well-actualized,” the official said of the plan, claiming it fulfills a campaign promise Trump made on June 28, 2016, when he indicated he would aggressively use U.S. trade laws to “defend this nation [and] defend this nation’s workers.”
“Nobody, particularly in the beltway, should express any kind of surprise at the actions we are taking,” the official said. “These have been some of the most well-discussed actions … probably in the history of trade actions.”
Under Section 232 of the decades-old Trade Expansion Act, the steel and aluminum tariffs will go into effect 15 days from Thursday and include immediate exclusions for Canada and Mexico, with whom the U.S. is currently working to renegotiate the North American Free Trade Agreement. The executive order will also allow other trade partners to approach the Trump administration with alternative ways to counter “the threat and impairment” of U.S. national and economic security that is caused by imports from their country, and escape the tariffs.
“President Trump has built a flexible set of tariffs, which will allow us to address our security relationships in a way that will also, in an ironclad way, allow us to ensure that we defend our aluminum and steel imports,” said the senior administration official. “Importantly, for now, Canada and Mexico will be excluded from tariffs and we will have ongoing discussions with Canada and Mexico about our security relationship.”
The executive order gives U.S. Trade Representative Robert Lighthizer broad authority to negotiate tariff levels with other countries, which could be increased at any point if, for example, the Trump administration struck a deal to permanently exempt Canada and Mexico.
“The tariffs that have been set … based on a calculus which is designed to ensure a healthy steel and aluminum industry, and that’s based on an ability to earn a reasonable rate of return. If Canada and Mexico were to be excluded, we would perhaps have to maybe raise the tariffs on everybody else to ensure that our steel and aluminum industries are defended,” the official said, describing the executive order as “wonderfully flexible.”
National Trade Council Director Peter Navarro and Commerce Secretary Wilbur Ross have worked closely since last April to help U.S. companies by imposing higher tariffs on countries, which they say will reduce massive trade deficits and rebuild the steel and aluminum industries.
The senior administration official argued that both sectors are “under threat of being weakened, or in the case of aluminum, being driven to extinction,” noting that six smelters have closed in the U.S. since 2013 and only two are currently operating at full capacity.
But members of the president’s own administration, including outgoing National Economic Council Chairman Gary Cohn, have pushed back against the tariffs, claiming they will devastate consumers and come at a cost to domestic businesses. More than 100 Republican lawmakers echoed that sentiment in a letter to the White House on the eve of Trump’s executive order.
The senior administration official cast the pushback Trump has faced as “hair-on-fire rhetoric … from lobbyists, politicians, and the swamp creatures” who are spreading “fake news.”
“There will be no significant price effects, job effects or inflation down the stream,” the official said. He said the only noticeable impact will be on items like “a six-pack of soda or beer,” where the price might increase by “a cent-and-a-half to two cents,” or on the cost of metal used by the military for F-18 and F-35 fighter jets.
