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Trump links tariff relief for Canada, Mexico to NAFTA talks


Washington, DC — President Donald Trump on Monday said North American neighbours Canada and Mexico will get no relief from his new tariffs on steel and aluminum imports unless a “new and fair” free trade agreement is signed.

The Trump administration says the tariffs are necessary to preserve the American industries — and that doing so is a national security imperative. But Trump’s latest tweets suggest he’s also using the upcoming tariffs as leverage in ongoing talks to revise the North American Free Trade Agreement. The latest round of a nearly year-long renegotiation effort is concluding this week in Mexico City.

The tariffs will be made official in the next two weeks, White House officials said Monday, as the administration defended the protectionist decision from critics in Washington and overseas.

Speaking on “Fox and Friends” Monday, White House trade adviser Peter Navarro said: “25 per cent on steel, and the 10 per cent on aluminum, no country exclusions — firm line in the sand.”

Trump’s pronouncement last week that he would impose tariffs on imported steel and aluminum, roiled markets and rankled allies. The president appeared unbowed Sunday, as he tweeted that American “Steel and Aluminum industries are dead. Sorry, it’s time for a change!”

The across-the-board action breaks with the recommendation of the Pentagon, which pushed for more targeted tariffs on metals imports from countries like China and warned that a wide-ranging move would jeopardize national security partnerships. But Commerce Secretary Wilbur Ross, whose agency oversaw reviews of the industries that recommended the tariffs, said Sunday ABC’s “This Week” that Trump is “talking about a fairly broad brush.”

Republican South Carolina Sen. Lindsey Graham said the sweeping action would let China “off the hook,” adding the tariffs would drive a wedge between the U.S. and its allies.

“China wins when we fight with Europe,” he said on CBS’s “Face the Nation.” ‘‘China wins when the American consumer has higher prices because of tariffs that don’t affect Chinese behaviour.”

Trump has threatened to tax European cars if the EU boosts tariffs on American products in response to the president’s plan to increase duties on steel and aluminum.

British Prime Minister Theresa May raised her “deep concern” at the tariff announcement in a phone call with Trump Sunday. May’s office says she noted that multilateral action was the only way to resolve the problem of global overcapacity.”

But Ross rejected threats of retaliation from American allies as “pretty trivial” and not much more than a “rounding error.”

And Navarro argued Monday that “there are virtually no costs here.”

“If you put a 10 per cent tariff on aluminum, it’s a cent and a half on a six pack of beer and it’s $25,000 on a $330 million (Boeing 777),” Navarro said.

Trade politics often cut along regional, rather than ideological, lines, as politicians reflect the interests of the hometown industries and workers. But rarely does a debate open so wide a rift between a president and his party — leaving him almost exclusively with support from his ideological opposites.

Labour unions and liberal Democrats are in the unusual position of applauding Trump’s approach on grounds it will bolster jobs in a depleted industry, while Republicans and an array of business groups are warning of dire economic and political consequences if he goes ahead with the tariffs.

“Good, finally,” said Sen. Sherrod Brown, an Ohio Democrat and progressive as he cheered Trump’s move. Sen. Bob Casey of Pennsylvania, a Democrat who has called for Trump to resign, agreed.

“I urge the administration to follow through and to take aggressive measures to ensure our workers can compete on a level playing field,” Casey tweeted.

As a candidate, Trump made his populist and protectionist positions on trade quite clear, at times hitting the same themes as one of the Democratic presidential candidates, Vermont Sen. Bernie Sanders.

“This wave of globalization has wiped out totally, totally our middle class,” Trump told voters in the hard-hit steel town of Monessen, Pennsylvania, during one of his campaign stops. “It doesn’t have to be this way.”

Trump’s criticism of trade agreements and China’s trade policies found support with white working-class Americans whose wages had stagnated over the years. Victories in big steel-producing states such as Ohio, Pennsylvania and Indiana demonstrated that his tough trade talk had a receptive audience.

Both candidates in a March 13 House election in Pennsylvania have embraced the president’s plans for tariffs. They addressed the topic Saturday in a debate that aired on WTAE in Pittsburgh.

“For too long, China has been making cheap steel and they’ve been flooding the market with it. It’s not fair and it’s not right. So I actually think this is long overdue,” said Democratic candidate Conor Lamb.

“Unfortunately, many of our competitors around the world have slanted the playing field, and their thumb has been on the scale, and I think President Trump is trying to even that scale back out,” said Republican candidate Rick Saccone.

But Trump’s GOP allies on Capitol Hill have little use for the tariff approach. They argue that other industries that rely on steel and aluminum products will suffer. The cost of new appliances, cars and buildings will rise if the president follows through, they warn, and other nations could retaliate. The end result could erode the president’s base of support with rural America and even the blue-collar workers the president says he trying to help.

“There is always retaliation, and typically a lot of these countries single out agriculture when they do that. So, we’re very concerned,” said Sen. John Thune, R-S.D.

Gov. Scott Walker, R-Wis., asked the administration to reconsider its stance. He said American companies could move their operations abroad and not face retaliatory tariffs.

“This scenario would lead to the exact opposite outcome of the administration’s stated objective, which is to protect American jobs,” Walker said.

Tim Phillips, president of the Koch Brothers-backed Americans for Prosperity, noted that Trump narrowly won in Iowa and Wisconsin, two heavily rural states that could suffer if countries impose retaliatory tariffs on American agricultural goods.

“It hurts the administration politically because trade wars, protectionism, they lead to higher prices for individual Americans,” Phillips said. “It’s basically a tax increase.”

 

 

White House gets pressure from within U.S. to spare Canada from steel tariffs

Alexander Panetta

Washington, DC — The Trump administration is coming under political pressure at home to exclude Canada from global tariffs on steel and aluminum, and while stating its preference for holding firm it’s leaving the door open just the tiniest crack to the possibility of adjustments.

Lawmakers, businesses, and hosts on the Sunday political talk-shows all challenged the logic of slapping a national-security tariff on a peaceful next-door neighbour, pushing the administration to justify its move.

The administration says a final announcement is coming next week. On Sunday, it signalled that President Donald Trump is leaning toward a no-exceptions-for-anyone attitude — but then added some potential asterisks.

In the midst of an internal tug-of-war within the White House the administration was represented on the talk shows by two of its most prominent trade hawks, Trump advisor Peter Navarro and Commerce Secretary Wilbur Ross.

Both appeared to suggest the decision is close to final.

While no countries will be excluded, Navarro said some industries could get exemptions. This is of keen interest to Canada’s auto sector, which is a leading supplier of steel and aluminum to the U.S.: “There’ll be an exemption procedure for particular cases where we need to have exemptions so business can move forward,” Navarro said on CNN.

Ross held out the slim prospect of some changes: “We shall see,” he told NBC’s “Meet The Press.”

“(Trump) has made a decision at this point,” he said of the 25 per cent tariff for steel and 10 per cent tariff for aluminum. “If he for some reason should change his mind, then it’ll change. I have no reason to believe he’s going to change his mind.”

The administration is being deluged with demands from its own political allies to relax its policy. The same two top Republican lawmakers who shepherded Trump’s tax-cut achievement through Congress, Kevin Brady and Orrin Hatch, have pleaded for revisions.

A senator of a border state said he’s already hearing from businesses at home. Angus King, an Independent senator from Maine, compared Trump’s plan to the devastating U.S. tariffs of the 1930s. He said companies in his state fear price increases for steel.

King said any trade actions should be targeted to discourage Chinese dumping — not hit the entire world.

“You want to do these kinds of things with a scalpel — not a chainsaw,” King told NBC.

To apply the tariffs, the U.S. is invoking a rarely used clause in a 1962 trade law that allows the president to declare tariffs if required by national security. The White House argues that the wording is broad, and that national security also could include employment and economic stability of the domestic steel industry.

“I don’t think we need to block Canadian steel in the name of national security. They’re annoying. You know, they’re too nice. But we don’t fear a war with Canada,” King said.

Every host of the big weekly U.S. talk shows raised the Canada angle.

Fox News’s Chris Wallace asked how the White House can possibly justify using a national security excuse for imposing tariffs on a close NATO partner, and legal member of the U.S. military-industrial complex.

CNN’s Jake Tapper asked Navarro to imagine how Canada might see this: “From the perspective of Canada … Canada would say, ‘National security exemption? We fight with you in every war. Our soldiers are right next to your soldiers in every conflict. What possible scenario could you envision where we wouldn’t supply you with steel and aluminum?”‘

But the general response from Trump officials was that everyone should prepare for tariffs. When Navarro was asked on Fox whether Trump would exclude anyone, he responded in the negative.

“That’s not his decision,” Navarro replied.

“As soon as he starts exempting countries he has to raise tariffs on everybody else. As soon as he exempts one country his phone starts ringing from the heads of state of other countries.”

He added more details in an interview with CNN: “Canada’s 40 per cent of the (American aluminum) market. If you exempt Canada, then you have to put big, big tariffs on everybody else. So this is a measured, targeted approach.”

He was repeatedly pressed on the Canada issue in these interviews. Navarro did leave out the possibility of certain industries being exempted.

The issue has sparked a ferocious debate within the White House. Last week, it appeared Trump had frozen out the free-traders in his office and made this announcement with the support of hawks like Navarro.

American press reports have also described the president feeling angry and isolated in recent days. His administration has been hit with resignations, infighting and conflict-of-interest allegations involving the president’s own son-in-law, Jared Kushner.

A South Carolina Republican called it folly.

Sen. Lindsey Graham mentioned the Volkswagen and BMW plants in his state and expressed fear of how a trade war might affect jobs there. He said there’s reason to pursue China for intellectual-property theft and product dumping, but this is hitting all the wrong targets.

He addressed Trump directly in his interview on CBS’s “Face The Nation.”

“You’re letting China off the hook,” Graham said.

“You’re punishing the American consumer and our allies. You’re making a huge mistake here. Go after China — not the rest of the world.”