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WASHINGTON, DC - MARCH 01: U.S. President Donald Trump (2R) participates in a meeting with leaders of the steel and aluminum industries at the White House March 1, 2018 in Washington, DC. Trump announced planned tariffs on imported steel and aluminum during the meeting, with details to be released at a later date. (Photo by Win McNamee/Getty Images)

Trump slaps tariff on foreign steel and aluminum

Steel and aluminum tariff will be counterproductive, say lawmakers, economists, trade representatives.

Republican lawmakers were quick to respond to a sweeping tariff, or import tax, on imported steel and aluminum after President Donald Trump surprised supporters by announcing the planned move on Thursday.

According to the White House plan, the U.S. will impose a tariff of 25 percent on foreign steel imported into the U.S. and 10 percent tariff on foreign aluminum, a move the President says is designed to boost domestic production of U.S. metals and bolster steel and aluminum industries.

Almost immediately, foreign trade officials in Canada, Mexico, China, the European Union (EU) and Brazil announced they will issue or are considering appropriate countermeasures to balance the White House plan to change trade policy by imposing tariffs on metal imports, opening the door to retaliatory export taxes on U.S. goods, which some believe are likely in the days ahead.

At a White House meeting with Secretary of Commerce Wilbur Ross and U.S. metal industry executives Thursday, the president indicated wording for a Presidential Order is being drafted and should be ready for signing sometime next week. The president indicated he would sign the measure and establish tariffs as soon as possible.

Surprised Lawmakers

News sources speculated the announcement came as a surprise to both lawmakers and many within the President’s staff. The announcement ended a months-long debate in the White House that many say divided select members of the president’s top advisers. Lawmakers also expressed surprise at the announcement following the White House meeting.

The reaction from U.S. lawmakers was swift and largely critical of the president’s plan, even from Republican supporters. According to Business Insider, Sen. Ben Sasse (R-Nebraska) called the move "a massive tax" for Americans. Sen. Orrin Hatch, (R-Utah), a long-time Trump ally and supporter, said he encourages the president to carefully consider the implications of such a move.

Hatch authored recent legislation to overhaul the nation's tax code. He said that plan was designed to give taxpayers a break and warned steel and aluminum tariffs can potentially erase those cuts as consumers and industry begin to feel the crunch of troubling trade problems.

"Let's be clear: The president is proposing a massive tax increase on American families," Sasse told reporters. "Protectionism is weak, not strong."

Sen. John Cornyn (R-Texas) also issued a strong warning, saying new tariffs imposed by Trump could lead to negative outcomes such as a trade war with U.S. trading partners.

Almost immediately, the New York Stock Exchange (NYSE) began falling, dropping about 400 points before closing. Traders say they are concerned that auto companies like General Motors will have to pay more for the steel and aluminum in its cars and trucks and are likely to pass along those charges directly to car and truck buyers.

Threat to Farm Exports

Analysts say not only consumers, but also industry and business may feel the sting of new steel and aluminum tariffs. Commercial construction could greatly slow down in the months ahead as developers delay construction projects. Democrats on The Hill warn that Trump's move will greatly affect any plans to rebuild U.S. infrastructure because of the added costs caused by the policy.

Sen. Pat Toomey, (R-Pennsylvania), called Trump's move "a big mistake," and farm group officials agreed, expressing concern that U.S. agricultural products may be targeted for retaliation measures. Sen. Pat Roberts, (R-Kansas), head of the Senate Agriculture Committee, says the move to impose tariffs on steel and aluminum is a threat to U.S. farm exports.

"Every time you do this, you can expect a trade retaliation," Roberts said. "And agriculture is the number one target. I think this is terribly counterproductive," Roberts reported to Business Insider.

Sen. Hatch, who has demonstrated strong support for the successful renegotiation of the North American Free Trade Agreement (NAFTA), appeared agitated during a cable news interview following Thursday’s announcement.

“Tariffs on steel and aluminum are a tax hike the American people don’t need and can’t afford,” Hatch told reporters.

According to the BBC, European Commission President Jean-Claude Juncker said the tariffs would put thousands of European jobs at risk.

"We will not sit idly while our industry is hit with unfair measures," Juncker told the BBC. "The EU will react firmly and commensurately to defend our interests."

Germany's steel industry federation, WV Stahl, said the US measures violated the rules of the World Trade Organization and would have a major impact on Germany's steel market.

Officials in China and Korea failed to detail what plans or policy changes they are considering, but both countries have indicated they will consider countermeasures against U.S. tariffs on steel and aluminum. A Fox Business analyst said Thursday that while the move is designed to breathe life into a faltering U.S. steel and aluminum industry, economists and trade officials in Washington warn a resulting trade war could cause a serious setback for the U.S. economy in the coming months.

 

 

 

 

 

TAGS: Legislative
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