Trump firm on tariffs amid GOP pushback
Washington — President Donald Trump stood firm Monday in his pledge to impose stiff 25 percent tariffs on foreign steel and 10 percent tariffs on foreign aluminum, setting up a showdown with House Speaker Paul Ryan and other Republicans who oppose the action.
“No, we’re not backing down,” Trump told reporters at the White House after he had tweeted that morning he would not reverse his position on the tariffs unless Canada and Mexico agree to sweeping changes to the North American Free Trade Agreement.
The defiance from Trump came after Republican congressional leaders increasingly broke with the president, signaling that a deviation for their traditional stance on the importance of free trade might be a bridge too far for rank-and-file members of the GOP.
“We are extremely worried about the consequences of a trade war and are urging the White House to not advance with this plan,” AshLee Strong, a spokeswoman for Ryan, said in a statement that was an unusual rebuke to the president. “The new tax reform law has boosted the economy and we certainly don’t want to jeopardize those gains.”
Republican leaders of the House Ways and Means Committee circulated a letter opposing Trump’s plan, and GOP congressional leaders suggested they may attempt to prevent the tariffs if the president moves forward.
Two dozen conservative groups, including the Club for Growth, FreedomWorks and the National Taxpayers Union, urged Trump to reconsider, writing in a letter that the tariffs would be “a tax on the middle class with everything from cars to baseball bats to even beer.”
Trump blindsided Republican lawmakers and even some members of his own staff last week with his surprise declaration on tariffs. Some free-trade Republicans warned over the weekend of the folly of starting a trade war.
U.S. trade representative Robert Lighthizer, who has overseen U.S. negotiations on NAFTA, said the administration has offered to exclude Canada and Mexico from tariffs on steel and aluminum as an incentive to reach a deal on the trade agreement.
He said that if Mexico, the U.S. and Canada don’t renegotiate the trade pact in next two months, Washington might put the talks on the back burner until after a new Mexican president is elected or takes office.
The Dow Jones industrial average was up 336.7 points Monday, a gain of 1.4 percent, on optimism that the president would not follow through.
The president started the morning on Monday by tying the tariffs to demands that Canada and Mexico capitulate to proposed changes to NAFTA.
“We have large trade deficits with Mexico and Canada. NAFTA, which is under renegotiation right now, has been a bad deal for U.S.A. Massive relocation of companies & jobs,” Trump tweeted. “Tariffs on Steel and Aluminum will only come off if new & fair NAFTA agreement is signed.
“Also, Canada must treat our farmers much better,” he continued. “Highly restrictive. Mexico must do much more on stopping drugs from pouring into the U.S. They have not done what needs to be done. Millions of people addicted and dying.”
Canada and Mexico have promised to retaliate if Trump follows through with the plan, which is likely to increase the cost of building cars.
In previous rounds of the NAFTA talks, U.S. negotiators proposed increasing the minimum percentage of parts that must be made in the U.S., Canada or Mexico — from 62.5 percent to 85 percent — in order to escape tariffs when imported to this country. And they want to require that 50 percent of parts come from the U.S. Canada and Mexico have thus far rejected what they see as hardline proposals from the U.S., and they have pushed the time frame for resolving differences possibly into 2019.
U.S. Sen. Gary Peters, D-Bloomfield Township, raised concerns that Trump’s tariff proposal will have unintended consequences that could harm the U.S. auto industry.
“I certainly understand we’ve got to deal with the dumping of steel, particularly from the Chinese,” Peters said in an interview Monday with The Detroit News editorial board. “You got to have rules in place. You can’t let someone just basically ignore them and dump, which the Chinese has. You’ve got to focus on that. ... If we’re looking at trade, it’s got to be comprehensive and I’d be concerned that with auto parts, then you’d have auto parts using cheap Chinese steel.”
An auto industry group agreed, warning Monday that “no one wins a trade war.”
“Tariffs are taxes, and the result will be more expensive vehicles — effectively erasing any positive change Americans saw from the 2018 tax reform bill,” Cody Lusk, president of the American International Automobile Dealers Association, which lobbies for foreign carmakers, said in a statement.
That warning was a response to a tweet by the president Saturday that he would tax European cars if the European Commission followed through on retaliatory tariffs on Levi’s jeans, Harley-Davidson motorcycles and Kentucky bourbon.
“If the E.U. wants to further increase their already massive tariffs and barriers on U.S. companies doing business there, we will simply apply a Tax on their Cars which freely pour into the U.S,” he tweeted Saturday. “They make it impossible for our cars (and more) to sell there. Big trade imbalance!”
Associated Press contributed.