Washington, DC — After a week of hints and uncertainty, President Donald Trump said Thursday he would soon announce tariffs on imported steel and aluminum but with temporary exemptions for Canada and Mexico as he seeks to revise the North American Free Trade Agreement. He suggested Australia and “other countries” might also be spared, a shift that could soften the international blow amid threats of retaliation by trading partners.
Opponents of the tariffs spent Thursday engaged in last-minute lobbying to blunt the impact.
“We’re going to be very fair, we’re going to be very flexible but we’re going to protect the American worker as I said I would do in my campaign,” Trump said during a Cabinet meeting.
The president reiterated that he would levy tariffs of 25 per cent on imported steel and 10 per cent on aluminum but would “have a right to go up or down depending on the country and I’ll have a right to drop out countries or add countries. I just want fairness.”
The president indicated Canada and Mexico’s treatment would be connected to the ongoing NAFTA talks, which are expected to resume in early April.
White House officials said specifics of Trump’s plan remained fluid, and it was unclear when the tariffs would be finalized. Administration officials have sought to iron out how certain national security “carve-outs” might be put in place to lessen the economic impact of the tariffs.
The process of announcing the penalties has been the subject of an intense debate and chaotic exchanges within the White House, pitting hard-liners against free trade advocates such as outgoing economic adviser Gary Cohn aiming to add more flexibility for U.S. trading partners.
The fight over tariffs comes amid intense turmoil in the West Wing, which has seen waves of departures and negative news stories that have left Trump increasingly isolated in the Oval Office, according to two senior officials speaking on the condition of anonymity to discuss internal thinking. Trump was still hearing last-minute pleas from opponents of the tariff plan, and White House officials said they couldn’t predict how the day would shake out.
Steel and aluminum workers were invited to the White House for an afternoon meeting with Trump, but it was unclear if the president plans to sign final orders or simply to discuss his pledge to impose the tariffs.
Peter Navarro, Trump’s trade and manufacturing adviser, said in an interview on Fox Business on Wednesday that the tariffs would go into effect within about 15 to 30 days and that the proclamation signed by the president would include a clause that would not immediately impose tariffs on Canada and Mexico.
Press secretary Sarah Huckabee Sanders told reporters the exemptions would be made on a “case by case” and “country by country” basis, a reversal from the policy articulated by the White House just days ago that there would be no exemptions from Trump’s plan.
Congressional Republicans and business groups are bracing for the impact of the tariffs, appearing resigned to additional protectionist trade actions as Trump signals upcoming economic battles with China.
The looming departure of Cohn, a former Goldman Sachs executive who has opposed the promised tariffs, set off anxiety among business leaders and investors worried about a potential trade war.
“We urge you to reconsider the idea of broad tariffs to avoid unintended negative consequences to the U.S. economy and its workers,” 107 House Republicans wrote in a letter to Trump.
At the White House, officials were working to include language in the tariffs that would give Trump the flexibility to approve exemptions for certain countries.
“He’s already indicated a degree of flexibility, I think a very sensible, very balanced degree of flexibility,” Commerce Secretary Wilbur Ross told CNBC. “We’re not trying to blow up the world.”
Trump signalled other trade actions could be in the works. In a tweet, he said the “U.S. is acting swiftly on Intellectual Property theft.” A White House official said Trump was referencing an ongoing investigation of China in which the U.S. trade representative is studying whether Chinese intellectual property rules are “unreasonable or discriminatory” to American business.
The official, who was not authorized to discuss internal deliberations and spoke on the condition of anonymity, said an announcement on the findings of the report — and possible retaliatory actions — was expected within the next three weeks.
Business leaders, meanwhile, continued to sound the alarm about the potential economic fallout from tariffs, with the president and CEO of the U.S. Chamber of Commerce raising the spectre of a global trade war. That scenario, Tom Donohue said, would endanger the economic momentum from the GOP tax cuts and Trump’s rollback of regulations.
“We urge the administration to take this risk seriously,” Donohue said.
The president has said the tariffs are needed to reinforce lagging American steel and aluminum industries and protect national security. He has tried to use the tariffs as leverage in ongoing talks to renegotiate NAFTA, suggesting Canada and Mexico might be exempted from tariffs if they offer more favourable terms under the trade agreement.
Associated Press writers Darlene Superville, Zeke Miller, Matthew Daly and Alan Fram in Washington and Lorne Cook in Brussels contributed to this report.