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Trump Administration Plans To Extend Steel And Aluminum Tariffs To Canada, Mexico And EU

May 31, 2018
Originally published on June 1, 2018 9:52 am
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It's been three months since President Trump declared trade wars are good and easy to win. That theory is about to be tested. The administration is imposing stiff new tariffs just after midnight tonight. The move targets imported steel and aluminum from key U.S. allies - Canada, Mexico and the European Union. Those tariffs will raise prices for American businesses and consumers. And trading partners say they'll retaliate with tariffs of their own on U.S. goods. NPR's Scott Horsley joins us now in the studio to talk more. Hey there, Scott.

SCOTT HORSLEY, BYLINE: Hi, Audie.

CORNISH: Other countries like China, Russia and Japan, they were already facing tariffs - right? - on steel and aluminum exports. So what's new about this latest announcement?

HORSLEY: You're right, Audie. Most the world's actually been feeling these tariffs - 25 percent on steel, 10 percent on aluminum - ever since March. But these key allies - Canada, Mexico and the E.U. - were given a temporary reprieve. They happen to be the United States' biggest foreign suppliers of steel aluminum. And the thought was maybe in the NAFTA negotiations or talks with Europe they might be able to find a way around these tariffs. So far, however, those talks have not produced a breakthrough, so the tariffs are going into effect. Commerce Secretary Wilbur Ross announced that this morning, though he did say the negotiations may continue. And so the tariffs could be reversed.

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WILBUR ROSS: The president has the ability unilaterally to increase tariffs, decrease tariffs, eliminate them, impose quotas instead, impose a combination of tariffs and quotas more or less to do anything he wishes.

HORSLEY: The goal of these tariffs, Audie, is to shore up the domestic steel and aluminum industry. So if the Trump administration can find another way to do that or if they get other concessions from our trading partners, these tariffs could be unwound.

CORNISH: Right. As a result, the domestic steel and aluminum companies have welcomed this, right? I mean - but what kind of reaction is it getting from other kinds of businesses and politicians?

HORSLEY: Well, the stock market has not liked this. The Dow tumbled this - on this news by nearly 1 percent. And this is one issue where the president's fellow Republicans have been especially outspoken in their criticism. Tennessee Senator Lamar Alexander, for example, issued a statement today calling these tariffs a big mistake. He's worried they're going to raise the price of automobiles for automakers who are big employers in Tennessee. In fact, these tariffs are going to raise costs for all kinds of businesses that use steel and aluminum whether that's, you know, bass boats or beer cans. And there are a lot more American workers in those using industries than there are in the steel mills and aluminum smelters.

CORNISH: Elsewhere in the program we're going to hear from France's finance minister. But tell us a little bit about what kind of retaliation the U.S. could face from Canada, Mexico and others.

HORSLEY: We are already hearing about retaliatory tariffs. They've been cued up and ready to go for some time. The Europeans are going after Harley-Davidson motorcycles, Kentucky bourbon. Mexico's targeting cheese and pork. Canada's planning a whole laundry list of tariffs on products ranging from lawnmowers to sailboats to toilet paper. Justin Trudeau, the prime minister, though, was careful to say Canada remains America's partner.

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PRIME MINISTER JUSTIN TRUDEAU: This is not about the American people. We have to believe that at some point common sense will prevail. But we see no sign of that in this action today by the U.S. administration.

HORSLEY: Trudeau was particularly incensed that these are being justified on national security grounds when Canada of course is a longtime military ally.

CORNISH: That's NPR's Scott Horsley. Scott, thank you.

HORSLEY: You're welcome. Transcript provided by NPR, Copyright NPR.