WASHINGTON — President Donald Trump insisted Monday that he's "not backing down'' on his plan to impose stiff tariffs on imported steel and aluminum despite anxious warnings from House Speaker Paul Ryan and other congressional Republicans of a possible trade war.
The president said that North American neighbours Canada and Mexico would not get any relief from his plan to place the tariffs on the imports but suggested he might be willing to exempt the two longstanding allies if they agreed to better terms for the North American Free Trade Agreement.
"No, we're not backing down,'' Trump said in the Oval Office, seated with visiting Israeli Prime Minister Benjamin Netanyahu. "We've had a very bad deal with Mexico, we've had a very bad deal with Canada — it's called NAFTA,'' Trump said.
The president opened the door to exempting the two countries from the planned tariffs, telling reporters, "that would be, I would imagine, one of the points that we'll negotiate.'' But he added, "If they aren't going to make a fair NAFTA deal, we're just going to leave it this way.''
Trump spoke shortly after a spokeswoman for House Speaker Ryan said the GOP leader was "extremely worried'' about the tariffs setting off a trade war and had urged the White House "to not advance with this plan.'' Republican leaders of the House Ways and Means Committee, meanwhile, circulated a letter opposing Trump's tariff plan.
The administration says the tariffs are necessary to preserve the American industries — and that imposing them is a national security imperative. But Trump's comments and tweets earlier in the day suggested he was also using them as leverage in the current talks to revise NAFTA. The latest round of a nearly yearlong renegotiation effort is concluding this week in Mexico City.
He tweeted, "Tariffs on Steel and Aluminum will only come off if new & fair NAFTA agreement is signed. Also, Canada must treat our farmers much better. Highly restrictive. Mexico must do much more on stopping drugs from pouring into the U.S.''
In the meantime, Trump's tariff plan has been branded "absolutely unacceptable'' by Canadian Prime Minister Justin Trudeau of Canada, and Jean-Claude Juncker, president of the European Commission has said the European Union could respond by taxing American goods including Bourbon, blue jeans and Harley Davidson motorcycles.
We have large trade deficits with Mexico and Canada. NAFTA, which is under renegotiation right now, has been a bad deal for U.S.A. Massive relocation of companies & jobs. Tariffs on Steel and Aluminum will only come off if new & fair NAFTA agreement is signed. Also, Canada must..— Donald J. Trump (@realDonaldTrump) March 5, 2018
...treat our farmers much better. Highly restrictive. Mexico must do much more on stopping drugs from pouring into the U.S. They have not done what needs to be done. Millions of people addicted and dying.— Donald J. Trump (@realDonaldTrump) March 5, 2018
The tariffs will be made official in the next two weeks, White House officials said Monday, as the administration defended the protectionist decision from critics in Washington and overseas.
Speaking on "Fox and Friends,'' White House trade adviser Peter Navarro said: "25 per cent on steel, and the 10 per cent on aluminum, no country exclusions — firm line in the sand.''
Trump's pronouncement last week that he would impose the tariffs roiled markets and rankled allies.
The across-the-board action would break with the recommendation of the Pentagon, which pushed for more targeted tariffs on metals imports from countries like China and warned that a wide-ranging move would jeopardize national security partnerships. But Commerce Secretary Wilbur Ross, whose agency oversaw reviews of the industries that recommended the tariffs, said Sunday on ABC's "This Week'' that Trump is "talking about a fairly broad brush.''
Republican South Carolina Sen. Lindsey Graham said the sweeping action would let China "off the hook,'' adding the tariffs would drive a wedge between the U.S. and its allies.
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"China wins when we fight with Europe,'' he said on CBS's "Face the Nation.'' ''China wins when the American consumer has higher prices because of tariffs that don't affect Chinese behaviour."
Trump has threatened to tax European cars if the EU boosts tariffs on American products in response to the president's plan to increase duties on steel and aluminum.
British Prime Minister Theresa May raised her "deep concern'' at the tariff announcement in a phone call with Trump Sunday. May's office says she noted that multilateral action was the only way to resolve the problem of global overcapacity."
But Ross rejected threats of retaliation from American allies as "pretty trivial'' and not much more than a "rounding error.''
And Navarro argued Monday that "there are virtually no costs here.''
"If you put a 10-per-cent tariff on aluminum, it's a cent and a half on a six pack of beer and it's $25,000 on a $330 million (Boeing 777),'' Navarro said.
President finding unlikely allies on tariff issue
Trade politics often cut along regional, rather than ideological, lines, as politicians reflect the interests of the hometown industries and workers. But rarely does a debate open so wide a rift between a president and his party — leaving him almost exclusively with support from his ideological opposites.
Labour unions and liberal Democrats are in the unusual position of applauding Trump's approach on grounds it will bolster jobs in a depleted industry, while Republicans and an array of business groups are warning of dire economic and political consequences.
In the 2016 election, Trump's criticism of trade agreements and China's trade policies found support with working-class Americans whose wages had stagnated over the years. Victories in big steel-producing states such as Ohio, Pennsylvania and Indiana demonstrated that his tough trade talk had a receptive audience.
Both House candidates in next week's special election in Pennsylvania have embraced the president's plans for tariffs. They addressed the topic Saturday in a debate that aired on WTAE in Pittsburgh.
China wins when we fight with Europe. China wins when the American consumer has higher prices because of tariffs that don't affect Chinese behaviour.Republican Sen. Lindsey Graham
"For too long, China has been making cheap steel and they've been flooding the market with it. It's not fair and it's not right. So I actually think this is long overdue,'' said Democratic candidate Conor Lamb.
"Unfortunately, many of our competitors around the world have slanted the playing field, and their thumb has been on the scale, and I think President Trump is trying to even that scale back out,'' said Republican candidate Rick Saccone.
But Trump's GOP allies on Capitol Hill have little use for the tariff approach. They argue that other industries that rely on steel and aluminum products will suffer. The cost of new appliances, cars and buildings will rise if the president follows through, they warn, and other nations could retaliate. The end result could erode the president's base of support with rural America and even the blue-collar workers the president says he trying to help.
"There is always retaliation, and typically a lot of these countries single out agriculture when they do that. So, we're very concerned,'' said Sen. John Thune, R-S.D.
Gov. Scott Walker, R-Wis., asked the administration to reconsider its stance. He said American companies could move their operations abroad and not face retaliatory tariffs.