Trump Says Adjustment of Metals Tariffs Would Be 'Flexible'
By Michael C. Bender, Peter Nicholas and Rebecca Ballhaus
WASHINGTON -- President Donald Trump on Thursday said he would maintain flexibility to adjust proposed metals tariffs on a country-by-country basis, hours before he is expected to meet with metal industry executives and workers to discuss the new trade actions.
"We're going to be very flexible," Mr. Trump said at the outset of a cabinet meeting at the White House. The president said tariffs might not be necessary on Canada and Mexico if the North American Free Trade Agreement was renegotiated to his satisfaction.
Mr. Trump also suggested there could be a carve-out for Australia, which he called a "great country" and a "long-term partner."
"We'll be doing something with them," he said of Australia. "We'll be doing something with other partners."
Mr. Trump said the new tariffs would start at 25% on steel and 10% on aluminum, but could be adjusted for specific countries.
"I'll have a right to go up or down depending on the country," he said, adding that he could also add or drop countries from the tariffs.
"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," he said.
Mr. Trump later Thursday is scheduled to hold a meeting with metal industry workers, though it remains uncertain whether he will formally roll out his proposal to impose tariffs on steel and aluminum imports there.
"Looking forward to 3:30 P.M. meeting today at the White House," the president tweeted earlier Thursday. "We have to protect & build our Steel and Aluminum Industries while at the same time showing great flexibility and cooperation toward those that are real friends and treat us fairly on both trade and the military."
The president is expected to sign a decree this week laying out his plan to impose new tariffs on steel and aluminum, sparing both Canada and Mexico, after people on both sides of the issue made final pleas to either scuttle the measure or ensure he doesn't back off. The tariffs would usher in a turn in trade policy that could recalibrate relations between the U.S. and its allies and trading partners.
By about 3:30 p.m. on Wednesday, the decision was made inside the White House to start inviting industry workers to a meeting with Mr. Trump the next day where the president would sign the measure. But by Wednesday night, White House officials warned the paperwork wouldn't be ready in time.
White House officials released the president's public schedule for Thursday without mention of the proclamation signing or the meeting with workers. On Thursday morning, top aides said it remained unclear whether the proclamation would be ready for the meeting.
The preparation for the tariff rollout comes as more than 100 Republican House members sent an urgent letter Wednesday to the White House pressing for Mr. Trump to change course. In their letter, the GOP lawmakers urged the president to reconsider "broad tariffs to avoid unintended negative consequences to the U.S. economy and its workers."
They added that "tariffs are taxes that make U.S. businesses less competitive and U.S. consumers poorer." The GOP missive followed a similar one from members of a business-friendly House Democrats group urging hearings on the shifting trade policy.
The proclamation signing, which could happen as soon as Thursday afternoon, would cap a tumultuous few weeks in the White House, where advisers have been sparring over the direction of U.S. trade policy, with the tariffs handing a victory to the protectionist wing led by adviser Peter Navarro and playing a part in Tuesday's resignation of Gary Cohn, director of the National Economic Council.
Mr. Navarro said Wednesday that the plan would exempt Canada and Mexico at the outset and that they would remain free of the new tariffs if they successfully concluded negotiations rewriting the North American Free Trade Agreement.
"There's going to be an opportunity for Canada and Mexico to successfully negotiate a fair new Nafta, but if that is unsuccessful then tariffs will be imposed," Mr. Navarro said. He added that the two nations would be spared the tariffs -- which are slated to hit other countries within 30 days -- even if the Nafta negotiations took many more months.
He said the proclamation would be written in a way that would invite other countries to also seek to offer concessions in return for exclusion from the tariffs. But he added that for each country excluded, tariffs would have to be raised on those remaining to offer the same level of protection to the domestic industry.
"The president is well aware that anytime you remove someone from the universe for a good reason, in order to continue to defend those industries you have to make an upward adjustment to the tariffs on the remaining countries," Mr. Navarro said.
On Wednesday, about a dozen White House officials were consumed by the final details of the proclamation, rushing in and out of offices, and cutting short phone calls as changes were approved.
By about 3:30 p.m., the decision was made to start inviting industry workers for an announcement with the president on Thursday. But by Wednesday night, White House officials warned the paperwork wouldn't be ready in time. White House officials released the president's public schedule for Thursday without mention of the proclamation signing.
House Ways and Means Committee Chairman Kevin Brady (R., Texas), who was the lead signature on the House GOP letter, was preparing to meet with Mr. Trump, according to a person familiar with the matter. White House chief of staff John Kelly had arranged the meeting to give Republicans a last chance to make their case to the president, according to a House GOP aide.
For their part, pro-tariff forces took steps to show that Mr. Trump's rationale for the levies was sound. U.S. Steel said Wednesday that it would call back 500 workers in anticipation of the tariffs.
"We are definitely going to end up with these tariffs," Treasury Secretary Steven Mnuchin said Wednesday on Fox Business, "and we're going to roll this out very, very quickly."
Mr. Trump's tariff plans will set the U.S. apart from many of its allies, including those with whom it had been negotiating under President Barack Obama to form a 12-nation trading bloc that spanned the Pacific. Instead, the Trans-Pacific Partnership, which the U.S. withdrew from early in Mr. Trump's presidency, will be signed in Chile on Thursday with the 11 remaining members, including Japan, Vietnam, Australia, Chile and Peru.
Even with the proclamation, the terms of how it is enforced may remain fluid, allowing the Trump administration to use the prospect of including -- or exempting -- countries from the steel and aluminum tariffs as leverage in broader trade negotiations, such as the Nafta discussions now under way with Canada and Mexico.
That would signal a full shift from the U.S.'s previous emphasis on multilateral trade deals to using the threat of tariffs on individual countries to wring concessions that officials view to be in the U.S. interest. It may also, however, spark retaliatory measures from countries hit by the tariffs, potentially affecting trade in a wide range of imported and exported goods.
Among the remaining hang-ups in the White House is how to give the president flexibility to approve exemptions. One concern was that creating exemptions would undercut the national-security rationale for the new tariffs, one official said.
"Let's be very clear. We're not looking to get into trade wars," Mr. Mnuchin said.
Mr. Trump announced his decision to impose tariffs last week at a meeting surrounding by U.S. steel and aluminum executives, but left several key details, including the scope and duration of the tariffs, to be completed. The move came amid an intense internal debate among his top advisers.
Divisions remain within Mr. Trump's cabinet. Agriculture Secretary Sonny Perdue said Wednesday he is concerned about potential retaliation against U.S. agricultural exports, adding that the U.S. should "maintain relations with our allies that make sense."
Mr. Perdue, who hails from the peanut-growing state of Georgia, said in an interview that he is aware that the European Union this week included American peanut butter along with other products in its list of U.S. products facing possible retaliation.
"We're concerned not only about retaliation but certainly the costs of the inputs," he said, noting that farmers rely on products made of steel and aluminum.
Mr. Perdue supported an exclusion for Mexico and Canada if the two countries reach a deal with the U.S. on overhauling Nafta. "Most people believe that China has been the real issue," he said at an event co-sponsored by The Wall Street Journal.
Commerce Secretary Wilbur Ross, a proponent of the new tariffs, said the expected announcement "is a very good and very important step for the president to take and quite consistent with his campaign promises and with things he had informally discussed for years prior to the campaign."
--Siobhan Hughes, Louise Radnofsky, William Mauldin and Jacob M. Schlesinger contributed to this article.
Write to Michael C. Bender at Mike.Bender@wsj.com, Peter Nicholas at firstname.lastname@example.org and Rebecca Ballhaus at Rebecca.Ballhaus@wsj.com
(END) Dow Jones Newswires
March 08, 2018 12:38 ET (17:38 GMT)Copyright (c) 2018 Dow Jones & Company, Inc.