Nation & World

Trump tariffs easier on allies, for now

Trump opens door to new trade pitches from U.S. partners

Canadian Foreign Minister Chrystia Freeland, Mexican Economy Minister Ildefonso Guajardo and U.S. Trade Representative Robert Lighthizer take part in a joint news conference on the closing of the seventh round of NAFTA talks in Mexico City, Mexico March 5, 2018. REUTERS/Edgard Garrido
Canadian Foreign Minister Chrystia Freeland, Mexican Economy Minister Ildefonso Guajardo and U.S. Trade Representative Robert Lighthizer take part in a joint news conference on the closing of the seventh round of NAFTA talks in Mexico City, Mexico March 5, 2018. REUTERS/Edgard Garrido

WASHINGTON — President Donald Trump imposed tariffs Thursday on imported steel and aluminum but offered relief to some U.S. allies as he bucked many in his own party to pursue his long-held goal of rewriting what he views as rigged rules of international trade.

The tariffs, set to take effect in 15 days, mark Trump’s broadest step yet to favor U.S. industries over foreign competitors. But they stop short of his earlier intention to impose sweeping tariffs that would hit U.S. allies and rivals alike.

The tariffs contain an initial exemption for Canada and Mexico, as the administration seeks broader trade concessions from both countries as it renegotiates the North American Free Trade Agreement.

And Trump is opening the door to exemptions for other countries as well, saying he will consider carve outs for other allies that change their trade policies.

These terms effectively invited every foreign ally to undergo a fresh trade negotiation with the United States.

“I’ll have a right to go up or down depending on the country, and I’ll have a right to drop out countries or add countries,” Trump said Thursday in an appearance alongside his Cabinet. “We’re going to be very fair, we’re going to be very flexible, but we’re going to protect the American worker — as I said I would do in my campaign.”

But where Trump sees an opportunity to protect U.S. manufacturing and blue-collar workers, his fellow Republicans — joined by some Democrats, business leaders and many economists — fear he’s embarking on a process that could escalate into a war that would suck in other sectors of the economy including agriculture.

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According to the Iowa State Data Center, Iowa’s three biggest export destinations are Canada, Mexico and Japan.

Republican Iowa Sen. Joni Ernst said on a radio program she had tried repeatedly to get through to the White House to register her complaints and finally was able to meet with officials in the vice president’s office Wednesday night.

“I think there’s a lot of calls going to him right now from a number of congressmen, senators, that are displeased about the policy,” Ernst said. “This needs to be well thought through, and I think it just came out of the blue. And again, I think retaliation, especially against states like Iowa, is going to be very, very heavy. It’ll be heavy-handed.”

The fear of U.S. firms — and farmers — losing access to foreign markets was heightened Thursday when 11 Pacific nations signed their own agreement to lower tariffs, enacting a version of the Trans-Pacific Partnership that the United States initially pursued as a way to deepen trade with Asia but that Trump canceled.

While GOP leaders expressed relief that Trump had at least initially spared some allies, they continued to push him o abandon his plans.

“I disagree with this action and fear its unintended consequences,” said House Speaker Paul Ryan, R-Wis. “We will continue to urge the administration to narrow this policy so that it is focused only on those countries and practices that violate trade law.”

But despite widespread GOP condemnation of the tariffs, few fellow Republicans appeared to have much appetite to challenge the move legislatively, especially given the difficulties of assembling a veto-proof majority to oppose a president of their own party. Republicans are particularly wary of crossing their party’s most visible figure ahead of a midterm elections.

The tariffs do a have a small coalition of supporters in Congress, including some Democrats from states whose industries stand to benefit.

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For those countries subject to the tariffs, steel imports will be taxed at 25 percent and aluminum imports at 10 percent. If Mexico and Canada win permanent exemptions, tariffs on imports from other nations may be increased beyond 25 percent, a Trump official said.

The announcement kicks off a period of additional economic and political uncertainty.

Before Trump finalized the tariffs, trading partners had threatened retaliation if he moved forward. Jean-Claude Juncker, the president of the European Commission, identified potential targets that have political significance: bourbon from Kentucky, the home state of Senate Majority Leader Mitch McConnell, R-Ky., and Harley-Davidson motorcycles based in Ryan’s home state of Wisconsin.

China, another major U.S. trade partner where former Iowa Gov. Terry Branstad is ambassador, stopped short of threats but mocked the decision.

“What an extremely stupid move,” said Li Xinchuang, vice secretary general of the China Iron and Steel Association. “A desperate attempt by Trump to pander to his voters, which I think in fact runs counter to his ‘America First’ pledge.”

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