Trump Formally Orders Tariffs On Steel, Aluminum Imports | KERA News

Trump Formally Orders Tariffs On Steel, Aluminum Imports

Mar 8, 2018
Originally published on March 27, 2018 1:31 pm

Updated at 4:47 p.m. ET

President Trump ordered steep tariffs on imported steel and aluminum from every country except Canada and Mexico. It's the boldest move to date for the president who campaigned on a protectionist platform that is sharply at odds with Republicans' free trade orthodoxy.

Trump signed the orders Thursday afternoon during a White House event featuring steel and aluminum workers in blue jeans and holding hard hats.

"A strong steel and aluminum industry are vital to our national security, absolutely vital," Trump said. "Steel is steel. You don't have steel, you don't have a country."

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House Speaker Paul Ryan, R-Wis., issued a statement disagreeing with the administration's approach, arguing instead for "targeted enforcement" against bad trade practices by countries like China.

"I disagree with this action and fear its unintended consequences. I am pleased that the president has listened to those who share my concerns and included an exemption for some American allies, but it should go further," Ryan said. "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."

The president ordered a 25 percent tariff on imported steel and a 10 percent levy on imported aluminum to take effect in 15 days. Although Trump initially wanted to apply the tariffs worldwide, carve-outs were added for Canada and Mexico for the time being. Aides say exceptions could be made for other U.S. allies.

Canada is the leading supplier of imported steel and aluminum to the U.S., accounting for 16 percent of imported steel and 41 percent of imported aluminum, as CNBC has reported.

Trump said the order would show "great flexibility and cooperation toward those that are real friends."

Domestic steelworkers have applauded the president's move.

"Everybody's just happy," said Mark Goodfellow, head of the Steelworkers Local 420A in Massena, N.Y., where Alcoa employs about 500 people. "It feels like the American worker is getting a break and finally getting a shot to compete on a level playing field."

U.S. Steel announced plans to restart one of two idle blast furnaces in Granite City, Ill., and call back some 500 workers. Century Aluminum plans to invest $100 million in its smelter in Hawesville, Ky., and hire 300 additional workers.

"My father worked in the industry and worked at that plant for 40 years," Dusty Stevens, a superintendent at the Century plant, said at the White House event Thursday. "This hits home for all of us in Hawesville."

Both the steel and aluminum industries have been under heavy pressure from imports. In recommending tariffs or quotas, the Commerce Department noted that employment in the domestic steel industry has shrunk by 35 percent in the past two decades, while the aluminum industry shed nearly 60 percent of its jobs between 2013 and 2016.

"Those are bedrock, backbone industries of this country," said White House trade adviser Peter Navarro. "And the president is going to defend them against what is basically a flood of imports that have pushed out American workers, aluminum smelters. And we can't afford to lose them."

Authority for the tariffs comes from a seldom-used law from the 1960s that was designed to protect domestic industries deemed vital to national defense.

But Defense Secretary Jim Mattis questioned that premise, noting that military demand for steel and aluminum can be met with just 3 percent of domestic production. What's more, unless the U.S. declares war on its neighbor to the north, metal supplies from Canada are not likely to be compromised.

Experts say the real challenge for industry is China, which produces almost as much steel in a month as the U.S. does all year. But the U.S. has already imposed anti-dumping measures against Chinese producers, and relatively little Chinese metal flows directly into the U.S. market.

"Even though China's overcapacity is weighing down global prices, it's not the direct cause of a loss of our aluminum and steel industries," Navarro said. "The direct cause is simply the foreign steel that crosses our borders. And that is what we must stop."

Critics worry that tariffs will increase costs for businesses and consumers and could spark retaliation from America's trading partners. Republican lawmakers have been urging the White House to adopt a more surgical approach.

"We're on the verge of a painful and stupid trade war, and that's bad," Sen. Ben Sasse, R-Neb., said in a statement. "This isn't just bad for farmers and ranchers in Nebraska who need to buy a new tractor, it's also bad for the moms and dads who will lose their manufacturing jobs because fewer people can buy a more expensive product. Temporary exceptions for Canada and Mexico are encouraging, but bad policy is still bad policy."

Ultimately, it is unlikely that lawmakers will take action to counter the president, despite technically having the ability to do so.

The tariffs have also caused friction within the administration. Trump's top economic adviser and free trade advocate Gary Cohn announced his resignation on Tuesday.

"President Trump is a unique negotiator," Agriculture Secretary Sonny Perdue said this week, as Radio Iowa reported. "Sometimes he keeps people off balance, even his own staff."

Many farmers are heavily dependent on export markets and could be hit hard in a trade war. Asked for his advice, Perdue chuckled softly and said, "Pray."

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President Trump is making good on his pledge to protect the U.S. steel and aluminum industries. This afternoon, the president ordered steep tariffs on imported steel and aluminum. Critics, including Republicans in Congress, warn the move will drive up prices and could spark retaliation by other countries. The impact was softened somewhat because Trump exempted imported metal from both Mexico and Canada - that's the leading U.S. supplier. In a few minutes, we'll hear what lawmakers have to say. First, NPR's Scott Horsley joins us from the White House. Hey, Scott.

SCOTT HORSLEY, BYLINE: Good to be with you.

KELLY: We have been awaiting this formal order for a week since the president first telegraphed his intent to impose tariffs. What was the scene like there at the White House?

HORSLEY: Well, the event took place in the Roosevelt Room. There were some cabinet officials on hand and a lot of men and some women in blue jeans and holding hard hats. They looked on as the president signed orders imposing a 25 percent tariff on imported steel and a 10 percent tariff on imported aluminum. Those are actually larger levies than the Commerce Department had recommended. The president says he wants to protect homegrown steel mills and aluminum smelters that he considers vital to national security.


PRESIDENT DONALD TRUMP: We want to build our ships. We want to build our planes. We want to build our military equipment with steel, with aluminum from our country.

HORSLEY: This was the strongest move to date by a president who campaigned on an aggressive protectionist platform. And it comes, Mary Louise, on the same day that 11 other countries around the Asia-Pacific region were actually signing that big trade agreement that Donald Trump pulled out of.

KELLY: Indeed it is. What's going on with the exemptions we just mentioned for Canada and Mexico because initially the president had said these tariffs need to apply to everybody - every country?

HORSLEY: He did. He was worried that otherwise any country that was exempted would just become a backdoor for imports from the rest of the world to come through and evade the tariff. But after tremendous pressure, Trump agreed to at least a temporary exemption for Canada and Mexico that could be extended. It sort of depends on how talks proceed on extending - or rewriting the North American Free Trade Agreement. And the president said he might grant exemptions to other U.S. allies as well. The carve-out for Canada is especially important because, as you mentioned, that's the biggest exporter of steel and aluminum. Canada accounts for about 16 percent of imported steel in this country and 41 percent of imported aluminum.

KELLY: Well, how big a deal is this today for steel and aluminum workers?

HORSLEY: For the workers, it's a big deal. Both these industries have been badly beaten up by foreign competition. I talked this week with Mark Goodfellow who heads the Steelworkers Local in Massena, N.Y., where there's an Alcoa aluminum smelter. Their workforces - only about a third of what it was two decades ago. But Goodfellow says, with this announcement, things are looking up.

MARK GOODFELLOW: Everybody's just happy that we're - it feels like the American workers is getting a break and finally getting a shot to compete on a level-playing field.

HORSLEY: We had an announcement this week that U.S. Steel plans to restart one of two idle blast furnaces in Illinois and call back 500 workers. Also Century Aluminum is planning to invest money in an advanced aluminum smelter and hire an extra 300 workers in Kentucky.

KELLY: In Kentucky. Why has the president faced so much opposition though?

HORSLEY: Well, for every worker in a steel mill or an aluminum smelter, there are more than 40 who work in industries that use steel and aluminum. And those companies will have higher costs and could be at a disadvantage. Here's how Missouri Senator Roy Blunt put it in a meeting with the president.


ROY BLUNT: We make aluminum, and we make steel in Missouri. But we buy a lot of aluminum, and we buy a lot of steel as well. From bass boats to beer cans, there's a lot of aluminum out there.

HORSLEY: And there's also the threat that there could be retaliation by other countries against U.S. exports.

KELLY: All right. Thank you, Scott.

HORSLEY: You're welcome.

KELLY: NPR's Scott Horsley at the White House. Transcript provided by NPR, Copyright NPR.