The White House scrambled Friday to deal with a flood of questions and criticisms from around the globe after President Trump’s surprise announcement a day earlier that he would impose tariffs of 25% on imported steel and 10% on aluminum from China and other countries.
In a hastily called briefing for reporters, one senior administration official said the new tariffs would apply to those metals imported from all nations, seemingly clarifying whether Trump might exempt certain allies like Canada.
But the official left open the door to possible changes as he described the blanket, double-digit duties as a “preliminary decision” and said that the president’s tariff proclamation “in principle” would be finalized next week after a legal scrubbing.
The official provided no other details of the measure, which Trump indicated he would sign sometime next week. Trump also told steel executives called to the White House on Thursday that the tariffs would last a “long” time.
Trump’s announcement surprised some of his own top officials, who on Friday appeared to be continuing an internecine battle in the White House over Trump’s protectionist leanings.
At the same time, officials also sought to contain a fallout from Trump’s off-the-cuff rollout of the tariff news, which shocked U.S. lawmakers and business groups, and elicited a sharp response from Canada, the biggest exporter of steel to the U.S., as well as other trading partners.
European Union officials said they would potentially target American products, such as bourbon and Harley-Davidson motorbikes, for tariffs if Trump carried out his plan to levy global tariffs on the metals. And one European firm, Swedish-based Electrolux, said that it is putting on hold its $250 million commitment to invest in a Tennessee plant because of concerns about the impact of potential tariffs on imported steel and aluminum.
Major stock indexes in Europe and Asia sank on Friday on fears of a trade war. Stocks in the U.S. ended moderately down Friday after plunging the previous day after Trump’s announcement.
Trump on Friday morning brushed off concerns about the downside risks of his planned tariffs, tweeting that “trade wars are good, and easy to win.”
Trump’s authority to impose the tariffs is based on a U.S. law that grants the president wide discretion to apply trade sanctions on the grounds of national security.
In a series of tweets Friday, Trump reiterated the need to “protect our country and our workers,” and seemed to single out China without naming it: When “a certain country” gets “cute,” he wrote, “don’t trade anymore-we win big. It’s easy!”
China, however, was only the 11th-largest exporter of steel to the United States last year. About 40% of American steel imports come from countries in which the United States has collective defense alliances such as Canada, Germany and South Korea, said Andy Rothman, an investment strategist at Matthews Asia in San Francisco.
Few economists would agree with the president about the efficacy of trade wars. In March 2002, President George W. Bush imposed global tariffs of up to 30% on various types of imported steel, although some countries were excluded and it was not done in the name of national security.
Still, Bush lifted the tariffs after 20 months as the World Trade Organization ruled the action illegal and Europe threatened to retaliate with tariffs of its own — on citrus from Florida, Harleys made in Wisconsin and other U.S. goods. The tariffs lifted steel prices, and Bush claimed they allowed the domestic industry to get back on its feet. But by some estimates, the steel duties cost some 200,000 domestic jobs in 2002, about one-fourth of them in metal-making, machinery and transportation equipment and parts sectors.
For that and related political reasons, many Republicans also oppose Trump’s trade stance.
Sen. Ben Sasse (R-Neb.) said in a biting statement, “Trade wars are never won. Trade wars are lost by both sides. Kooky 18th century protectionism will jack up prices on American families — and will prompt retaliation from other countries. Make no mistake: If the President goes through with this, it will kill American jobs — that’s what every trade war ultimately does. So much losing.”