Ryan Urges Trump to Take Targeted Approach on Metals Tariffs -- 2nd Update

03/06/18 12:43 PM EST
By Siobhan Hughes and William Mauldin 

WASHINGTON -- House Speaker Paul Ryan stepped back Tuesday from calls for President Donald Trump to drop aluminum and steel tariffs, instead urging the White House to take a more tailored approach focusing on countries that abuse the trading system.

The president's announcement last week that he planned to impose global tariffs of 25% on steel and 10% on aluminum prompted worries among the congressional wing of the party that the move could provoke retaliation and hurt businesses that use steel and aluminum.

On Monday the president tied the move to negotiations over the North American Free Trade Agreement. He said the tariffs would stick until the U.S. had entered into a "new and fair" trade agreement with Mexico and Canada. Mr. Ryan had warned through a spokeswoman of triggering a trade war and urged Mr. Trump to back down.

On Tuesday, the Wisconsin Republican modulated his language and said that while some trade was unfair, the U.S. would be better served to go after wrongdoers.

"There is clearly abuse occurring," Mr. Ryan told reporters. "Clearly, there is overcapacity dumping in trans-shipping of steel and aluminum by some countries, particularly China, but I think the smarter way to go is to make it more surgical or more targeted."

Also on Tuesday, Treasury Secretary Steven Mnuchin said the proposed tariffs wouldn't apply to Mexico and Canada if the countries hammer out a deal on a new version of Nafta. The comments echoed the approach taken by U.S. trade representative Robert Lighthizer at the conclusion of Nafta talks Monday in Mexico City. Mr. Trump said the tariffs would be finalized this week, but it is unclear when the U.S., Canada and Mexico could achieve a deal on a Nafta overhaul

Many lawmakers have called for U.S. allies to be excluded from the import tariffs, and some want certain metal products, including those not produced in the U.S., to be exempted.

Mr. Ryan detailed his preferred approach one day after the House had returned from a weekend break. Many House Republicans on Monday night called for a more targeted approach to tariffs, with some saying that tariffs should apply to countries that abuse the system and others saying that the U.S. should impose tariffs only on narrow classes of metals, such as finished products.

"We are extremely worried about the consequences of a trade war and are urging the White House to not advance with this plan," AshLee Strong, a spokeswoman for Mr. Ryan, said on Monday. "The new tax reform law has boosted the economy and we certainly don't want to jeopardize those gains."

On Tuesday, Mr. Ryan wasn't asked about what sort of legislative options might be available to Congress should Mr. Trump refuse to back down. Congressional Republicans haven't ruled out potential legislative action aimed at blocking metals tariffs, according to a Republican familiar with the matter.

Congress, which has constitutional authority over taxes and tariffs, in recent decades has repeatedly delegated some powers to the executive branch. Lawmakers who oversee trade say the law that allows for Mr. Trump's planned tariffs on steel and aluminum gives presidents wide latitude to restrict imports on national-security grounds.

One GOP senator said Tuesday that Mr. Trump's planned tariffs shows Congress should take back some authority over trade.

"Over the years Congress has ceded way too much authority to the executive branch in a variety of [areas], but few more so than in the trade space where presidents have an awful lot of unilateral authority granted to them by Congress," Sen. Pat Toomey (R., Pa.) said in an interview. "More of that should be in the hands of Congress. We are in the process of exploring how one might achieve that."

Mr. Toomey is one of the Senate's most pro-free trade members, though he represents a manufacturing-intensive state where many voters support trade protection

Mr. Trump wants to protect the steel industry from what he sees as unfair competition from trading partners and especially from China. His plan to impose tariffs of 25% on steel imports and 10% on aluminum imports is set to benefit domestic U.S. producers.

The tariff move will also boost the cost of metals for a host of U.S. industries such as automobiles and construction equipment that use steel and aluminum. That worries Republican lawmakers who are supportive of the broader business community and wary of taxes and tariffs.

--Greg Ip and Kate Davidson contributed to this article

Write to Siobhan Hughes at siobhan.hughes@wsj.com and William Mauldin at william.mauldin@wsj.com


(END) Dow Jones Newswires

March 06, 2018 12:43 ET (17:43 GMT)

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