A White House trade adviser has suggested that Trump could grant exceptions if doing so would serve US interests. Picture / AP
The Trump Administration sent mixed signals about its new aluminum and steel tariffs, saying that any exceptions for allies are unlikely but also leaving room for an unpredictable president to change his mind.
White House trade adviser Peter Navarro appeared to draw a firm line against case-by-case exemptions as he defended President Donald Trump's sudden imposition of new trade premiums, which are likely to hit Canada and Europe hardest.
"That's not his decision," Navarro said when asked about the possibility of exemptions. "As soon as he starts exempting countries, he has to raise the tariff on everybody else," the adviser said when asked about Canada and the European Union.
"As soon as he exempts one country, his phone starts ringing with the heads of state of other countries."
In a separate interview on CNN, Navarro suggested that Trump could indeed grant exceptions if doing so would serve US interests. And Commerce Secretary Wilbur Ross said that although he does not expect Trump to change his mind, he does not rule it out.
Republican lawmakers, including Senator Lindsey Graham of South Carolina, called the tariff decision wrongheaded and misdirected. Trump isn't even punishing China, the country that might deserve it, Graham said.
"Please reconsider," Graham said in a direct appeal to Trump on CBS' Face the Nation."
The decision would hurt automobile manufacturing in his state while "letting China off the hook", Graham said.
"You're punishing the American taxpayers and you are making a huge mistake," the senator said.
British Prime Minister Theresa May was among the first to raise concerns directly with Trump, asking for a reconsideration of a policy opposed by many in Trump's own party and the White House, and that close allies say will start a global trade war.
May's office said she spoke with the president on Sunday morning and "raised our deep concern at the president's forthcoming announcement on steel and aluminum tariffs, noting that multilateral action was the only way to resolve the problem of global overcapacity in all parties' interests".
The White House did not immediately release its own statement on the call.
In a contentious interview with Fox News Sunday host Chris Wallace, Navarro insisted that other countries won't retaliate in a way that hurts US consumers, something disputed by many economists and some Republican lawmakers.
"There are no downstream price effects on our industries that are significant," Navarro said on Fox, one of several interviews he did as the administration sought to promote and defend a decision that appears likely to start a global trade war.
In several interviews, Navarro asserted that the cost to US consumers from any retaliatory actions would be a penny or two on a "six-pack of beer or Coke" and that Americans would be willing to pay a small penalty for the security of preserving domestic aluminum and steel production. He was challenged by interviewers on both his math and his premise.
Trump blurted out the trade tariff decision, including the percentage tariffs on both kinds of imports, during a White House meeting last week. A formal announcement is expected by the end of this week, administration officials said.
The biggest burden of Trump's new tariffs would be borne by Canada, the largest US trading partner. Canada is the largest exporter of steel and aluminum to the United States, supplying US$7.2 billion ($10b) worth of aluminum and US$4.3b of steel last year. Overall, the United States runs a trade surplus with Canada, which buys US$48b worth of US automobiles and US$40b of machinery, in addition to agricultural products.
The steel and aluminum tariffs would also hit Britain, Germany, South Korea, Turkey and Japan, countries with which the United States has close national security ties.
The EU has threatened retaliatory tariffs on US manufactured goods, including motorcycles and blue jeans, and the worry is that the tit-for-tat will harm American businesses that export, while raising costs for businesses that rely on a global supply chain.
Navarro said on Fox that the national security and economic security provision Trump cited in announcing the 25 per cent tariffs on steel and 10 per cent on aluminum is "country-agnostic", meaning that it applies across the board.
But speaking on CNN, Navarro suggested that there could be exemptions in "particular cases where we need to have exemptions so that business can move forward".
In the same interview, he also pushed back on the Pentagon's argument that the new trade policy could have an adverse effect on national security, arguing against giving allies a pass on the tariffs because "as soon as you exempt one country, then you have to exempt another country".
We are on the losing side of almost all trade deals. Our friends and enemies have taken advantage of the U.S. for many years. Our Steel and Aluminum industries are dead. Sorry, it’s time for a change! MAKE AMERICA GREAT AGAIN!
— Donald J. Trump (@realDonaldTrump) March 5, 2018
Allies are concerned about the tariffs because they supply more steel directly to the United States than China - which dominates a major part of the global steel trade and Trump's rhetoric.
"If you exempt Canada, then you have to put big tariffs on everybody else," Navarro said on CNN.
Trump is facing criticism from members of his own party over his trade plan, including from some of the top economists who advised his campaign. Navarro brushed off the criticism, arguing that Trump was alone in the GOP on trade during the 2016 presidential campaign - and won anyway.
"All 16 of those candidates didn't agree with his policies, either," Navarro said on CNN. "They're dead wrong on the economics, there's no downstream effect here. There's only a president ... saving and defending our aluminum and steel industries."
Ross, appearing on ABC's This Week, said he expects the formal rollout of the tariffs this week.
"I have not heard him describe particular exemptions," Ross said.
As for speculation that White House economic adviser Gary Cohn might quit over the new policy, with which he apparently disagrees, Ross said Trump likes to hear opposing views before he makes decisions.
"Gary Cohn, as far as I know, is certainly not going to walk out," Ross said on ABC.
In an interview on NBC's Meet the Press, Ross said he "has no reason to think" that Trump will reverse himself under pressure, but he did not rule it out.
"Whatever his final decision is, is what will happen," Ross said. "What he has said, he has said; if he says something different, it'll be something different."
Navarro cast the decision as a national security imperative to protect vital manufacturing industries at home and said Trump is acting to fulfill a campaign promise to US workers.
Economists warn that any benefit in terms of jobs could be far outweighed by increased steel costs for US automobiles, wind turbines, shale oil and gas drilling rigs, and more.
In Twitter posts on Saturday, Trump vowed to strike back at European leaders who said they would retaliate.
"If the EU wants to further increase their already massive tariffs and barriers on US companies doing business there, we will simply apply a Tax on their Cars which freely pour into the US. They make it impossible for our cars (and more) to sell there. Big trade imbalance!" he tweeted.
Navarro accused Wallace, the Fox host, of "fanning the flames" of a trade war, and he bristled when asked on CNN whether the Trump administration would consider pulling the United States out of the World Trade Organization.
"That's a provocative question," he said. "The best-case scenario here is that the World Trade Organization wakes up and realises we're not going to take it anymore."
The Wall Street Journal has called the steel and aluminum tariffs the single-worst policy decision of Trump's young presidency.
Trump, however, got a boost Sunday from Senator Joe Manchin III, who said on CNN that the president's tariff plan was "welcome".
"In West Virginia, we've lost thousands and thousands of jobs," Manchin said. "When you look at who produces the steel in the world, 50 per cent of the steel comes from China ... connect the dots," he said.
"Even if they're saying it might not come directly," he said. "The president has put this on the table, I welcome it. Let's look at it and see what they roll out."
On CBS, Manchin said trade should be "tit-for-tat".
"Free trade has't worked well for West Virginia," the senator said.
Ohio Governor John Kasich, a Republican, also appearing on CNN, excoriated the president over the planned tariffs.
"You just don't do things like that off the cuff," Kasich argued. "Trade wars that divide us from our allies make no sense."
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