White House Announces Tariffs On Steel And Aluminum From Key Allies

May 31, 2018
Originally published on May 31, 2018 10:13 am
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DAVID GREENE, HOST:

We're covering a big announcement from the White House this morning. The White House has announced that it is going to impose tariffs on several key allies. This is Commerce Secretary Wilbur Ross speaking a little while ago to reporters about President Trump's decision.

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WILBUR ROSS: He has decided in the case of Canada, Mexico and the European Union not to extend the exemptions. And therefore, they will be placed under the 25 percent tariff on steel and the 10 percent tariff aluminum effective midnight tonight.

GREENE: OK, the commerce secretary there. Let's talk more about this with NPR's Mara Liasson. Hi there, Mara.

MARA LIASSON, BYLINE: Hi there, David.

GREENE: So tell me more about exactly what Secretary Ross is announcing here.

LIASSON: He's announcing that, in effect, the trade war is back on. It was on hold, but now it's potentially back on. They had given exemptions to our allies - the EU, Canada and Mexico - to see if they could work something out on steel. That failed. So now steel and steel products imported from the EU, Canada and Mexico will be a lot more expensive. It's going to drive up prices for American businesses and consumers. Other countries that had gotten these temporary exemptions - South Korea, Argentina, Brazil and Australia - will not have tariffs put on them because they negotiated quotas. They agreed to drop the number of steel products that they send to the U.S. so that they will be exporting less steel to us.

GREENE: Now this has been a very complicated story to follow. And you have a lot of people around the world talking about what the implications of this might be. But what is the White House argument, essentially that it's protecting U.S. industries and this was something they had to do?

LIASSON: Yes. They want to protect U.S. industries. They're doing this under Section 232 of the trade laws, which gives them the ability to do it if it's in the interest of national security. And they define national security quite broadly. They say we have to have a robust domestic steel industry in order to have good national security. They're not saying that Mexico and Canada and the EU are national security threats. That's what's so confusing to people. They're our allies, after all. What they're saying is that anything that hurts our domestic steel industry hurts our economy, therefore hurts our national security.

But Secretary Ross was more explicit when he basically said today - he said the president's overwhelming objective is to reduce our trade deficit. The trade deficit is something that president Trump has been obsessed with for more than 30 years. It's a metric that he believes defines strength or weakness in an economy, kind of like television ratings. No - very few economists agree with him. The trade deficit doesn't measure an economy's strength or weakness, but he thinks it does. And this is what he wants to do.

GREENE: So what do we expect from these countries? I mean, they've threatened retaliation, right?

LIASSON: Yes, they've threatened retaliation. The EU has listed a whole bunch of American products that it will retaliate against, including Kentucky whiskey, just happens to be where Mitch McConnell is from, including Harley-Davidson motorcycles, just happens to be made in Wisconsin near Paul Ryan.

GREENE: They're familiar with American politics, these countries.

LIASSON: And, of course, they could also hit back on American agriculture products. And farmers are a big part of Donald Trump's base. Today, Wilbur Ross said that Secretary Perdue - the secretary of agriculture - has been given kind of carte blanche by the president to do whatever necessary to protect farmers if, in fact, the EU goes through with this retaliation. So I guess I'm thinking about maybe they're going to start the strategic soybean reserve and buy all the soybeans from farmers so they won't be hurt. Everybody is going to have tofu in their school lunches or something.

GREENE: (Laughter) OK, we'll see if that happens. Well, and Wilbur Ross after announcing these tariffs dealing with the EU, Canada, Mexico, he's off to China tomorrow - right? - another country that's hit by U.S. tariffs and trade restrictions.

LIASSON: Yes and another country where the U.S. has not been successful at achieving its objectives yet with China. China has a very strong hand to play. They want China to reduce its trade deficit. They want China to not steal American technology. And they want them to stop subsidizing industries of the future. Very hard to accomplish those things.

GREENE: All right. NPR's Mara Liasson. Mara, we appreciate it.

LIASSON: Thank you. Transcript provided by NPR, Copyright NPR.