After a year of thrilling skeptical conservatives with an economic agenda of tax cuts and deregulation, President Trump veered sharply away from his free market supporters Thursday by announcing plans to slap big tariffs on steel and aluminum imports.
Mr. Trump said he would sign into law next week tariffs of 25 percent on steel and 10 percent on aluminum. The levels are in line with Commerce Department recommendations after a 10-month investigation determined that those imports threaten national security.
The tariffs were necessary to combat foreign countries’ dumping of steel and aluminum in the U.S., said Mr. Trump, who blamed unfair trade practices for wiping out domestic production and helping ship manufacturing jobs abroad.
“What they do is they dump massive amounts of product on our country, and it just kills — it destroys our companies and our jobs. And it’s been happening for so many years,” Mr. Trump said at a meeting with steel and aluminum industry executives.
The remarks echoed Mr. Trump’s populist campaign rhetoric that flummoxed conservatives but won over the blue-collar voters who were crucial to his upset election win.
We must protect our country and our workers. Our steel industry is in bad shape. IF YOU DON’T HAVE STEEL, YOU DON’T HAVE A COUNTRY!
— Donald J. Trump (@realDonaldTrump) March 2, 2018
Putting his tough talk on trade into action still shook up Washington.
The announcement fueled infighting among White House advisers, ignited objections from Republican lawmakers and drew cheers from usually wary Democrats.
It also put the stock market into a nosedive. Fear that the U.S. was on the verge of a trade war sent the Dow Jones industrial average tumbling more than 500 points immediately after the announcement.
The blue chip index closed for the day at 24,608 for a loss of 420 points or 1.68 percent
The rumblings of a trade war were registering in Canada, the No. 1 supplier of steel and aluminum to the U.S.
Canadian Foreign Affairs Minister Chrystia Freeland called the tariffs “absolutely unacceptable.”
“It is entirely inappropriate to view any trade with Canada as a national security threat to the United States,” she said. “Should restrictions be imposed on Canadian steel and aluminum products, Canada will take responsive measures to defend its trade interests and workers.”
The European Union also threatened to impose countermeasures in retaliation for U.S. tariffs.
“We will not sit idly while our industry is hit with unfair measures that put thousands of European jobs at risk,” said European Commission President Jean-Claude Juncker.
Conservatives and business leaders in the U.S. warned that tariffs would drive up the costs of products that rely on inputs of steel and aluminum, including infrastructure sectors such as transportation, manufacturing, agriculture and energy.
“Aluminum is critical to the well-being of America’s beer industry as more than half of the beer produced annually is packed in aluminum cans or aluminum bottles,” said Jim McGreevy, president of the Beer Institute. “According to third-party analyses, this 10 percent tariff will create a new $347.7 million tax on America’s beverage industry, including brewers and beer importers, and result in the loss of 20,291 American jobs.”
Mr. Trump made the announcement amid confusion at the White House. The planned rollout was put on hold after advisers clashed, with top aides assuring reporters that there wouldn’t be an announcement.
The president ignored that advice.
A steadfast supporter of the tariffs has been Commerce Secretary Wilbur L. Ross Jr., who organized the meeting with industry leaders.
The steel executives applauded the plan.
“We are not protectionists; we want a level playing field,” said U.S. Steel Corp. CEO Dave Burritt.
Competing with foreign companies that use unfair trade practices was like playing “the whack-a-mole game,” he said.
After the meeting, John Ferriola, CEO of steel producer Nucor Corp., pushed back when a reporter asked about pressure on Mr. Trump not to impose tariffs.
“I believe that he feels some pressure from the voters who elected him in the last election, when he promised to bring jobs back to America by protecting trade laws and defending our trade laws,” he said.
However, a stampede of Republicans attempted to pressure the president against tariffs.
Sen. Ben Sasse, a Nebraska Republican and frequent critic of Mr. Trump, was among the first out of the gate.
“Let’s be clear: The President is proposing a massive tax increase on American families,” he said. “Protectionism is weak, not strong. You’d expect a policy this bad from a leftist administration, not a supposedly Republican one.”
In response, White House press secretary Sarah Huckabee Sanders said the president had nothing to apologize for.
“I don’t know that the president will or should ever apologize for protecting American workers — and certainly not to Sen. Sasse,” she said.
Republicans slamming the tariffs included Senate Finance Committee Chairman Orrin G. Hatch of Utah, Sen. Patrick J. Toomey from steel-dominant Pennsylvania and staunch conservative Sen. Mike Lee of Utah.
Joshua Bolten, president of the Business Roundtable, said the group “strongly disagrees” with the president on this score.
“It will hurt the U.S. economy and American companies, workers and consumers by raising prices and resulting in foreign retaliation against U.S. exporters,” he said. “Using ‘national security’ tools to implement tariffs could embolden other countries to impose ‘national security’ tariffs on U.S. exporters or otherwise restrict U.S. goods and services sold to their markets.”
Larry Kudlow, the economic analyst and conservative commentator who helped Mr. Trump craft his tax cut plan, tweeted his disappointment also.
“Tariffs are taxes on users, think cars, trucks, planes, cans etc. POTUS so good on taxes & regs, so bad on trade,” he wrote.
The proposal nevertheless attracted Democrats to the president’s side.
Senate Minority Leader Charles E. Schumer, New York Democrat, urged Mr. Trump to pursue tariffs when the Commerce Department made the recommendation last month.
Rep. Bill Pascrell Jr. of New Jersey, the top Democrat on the tax-writing House Ways and Means Committee, faulted Mr. Trump for not imposing the tariff sooner.
“Chinese companies subsidized by their government have unfairly flooded our market with cheap steel and aluminum for too long, at the cost of American manufacturing jobs,” he said. “We need meaningful action to support American industry and American workers. President Trump’s continued delay threatens American jobs, destabilizes markets and unsettles our closest allies.”
⦁ Seth McLaughlin contributed to this report.
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