Trump steel tariffs order divides industry stakeholders

WASHINGTON—President Trump's order levying steep tariffs against most imported steel and aluminum has elicited starkly different responses from various sectors.

Trump signed the order in the late afternoon of March 8, surrounded by workers from the steel and aluminum industries. The order establishes a 25 percent tariff on all steel imported into the U.S., and a 10 percent tariff on all imported aluminum.

"We want a lot of steel coming into this country, but we want it to be fair, and we want to protect our workers," Trump said in a speech at the signing ceremony.

He said he would temporarily exempt Canada and Mexico from the tariffs, and monitor the effect these exemptions will have on national security.

The steel industry and the United Steelworkers union are enthusiastic about the tariffs, while organizations such as the U.S. Tire Manufacturers Association and the Association of International Automobile Dealers Association have condemned the tariffs as harmful to both manufacturers and consumers dependent on products made from steel and aluminum.

"We strongly urge you to consider the unintended and substantial negative consequences that trade restrictions on steel imports will have for downstream U.S. manufacturers," the USTMA and its 10 tire manufacturer members told President Trump in a March 7 letter.

But Scott Paul, president of the Alliance for American Manufacturing, praised the president's actions in a statement released during the signing ceremony.

"We hope the era of American trade surrender is coming to an end," Paul said. "I thank President Trump for starting that process.

"Steel and aluminum workers are already being hired back, and as the result of stronger industries, we believe these will be the first of many new jobs created in America's manufacturing communities," he said.

Republican members of Congress also expressed opposition to the tariffs. House Speaker Paul Ryan, R-Wis., met with Trump, trying to dissuade him from an action that might cause a backlash in an election year.

House Ways and Means Committee Chairman Kevin Brady, R-Texas, also met with Trump after his March 1 announcement. Brady reportedly asked him to take a narrower approach to tariffs, targeting countries such as China rather than Canada and the European Union.

"I applaud the president for targeting unfairly traded steel and aluminum," Brady was quoted as saying on the Ways and Means website. "But unlike the tariffs that also sweep up fairly traded steel and aluminum, especially with trading partners like Canada and Mexico, they should be excluded from this tariff."

Gary Cohn, director of the National Economic Council and chief economic adviser to the president, announced his resignation March 6 because of his sharp disagreement with Trump over tariffs.

Trump announced the tariffs under Section 232 of the Trade Expansion Act of 1962, which allows the president to impose trade restrictions on any import that may threaten national security.

On the morning of March 8, the president said he would be "very flexible" regarding possible exemptions for some steel-importing countries. He also said March 5 that he might consider ending the tariffs if the North American Free Trade Agreement is renegotiated in a way he finds favorable to the U.S.

"We're going to build our steel industry back and we're going to build our aluminum industry back," Trump said during a March 1 "listening session" with representatives of the U.S. steel and aluminum industry, the minutes of which were posted on the White House website.

David Burritt, president and CEO of United States Steel Corp., hailed the president's decision at the same listening session.

"Having been somebody that has global views and believes in free trade, we know when it's completely unfair." Burritt said. "We are not protectionists. We want a level playing field. It's for our employees; to support our customers."

In a March 3 statement, USW International President Leo W. Gerard also praised Trump's action, especially as related to China.

"American aluminum and steel manufacturers and their workers have railed for decades against the trade regulations scofflaws that bankrupted U.S. mills and destroyed U.S. jobs," Gerard said.

"China has conducted a trade war against the United States since the day in 2001 that the World Trade Organization granted the Asian giant membership," he said.

However, Gerard also said the tariff plan needed to be fine-tuned to exempt Canada.

"Canada is not the problem," Gerard said. "The United States and Canada have integrated manufacturing markets and our union represents trade-impacted workers in both nations. In addition, the defense and intelligence relationship between the countries is unique and integral to our security.

"Any solution must exempt Canadian production," Gerard said. "At the same time, Canada must commit to robust enforcement and enhance its cooperation to address global overcapacity in steel and aluminum."

The USTMA has opposed a sweeping tariff against imported steel since the U.S. Department of Commerce began the Section 232 investigation last year. The tire-grade steel that tire makers need is simply not manufactured in the U.S., the USTMA has reiterated at Section 232 hearings.

Two weeks before President Trump announced the tariffs, Commerce issued a report recommending high tariffs on both steel and aluminum.

"We are concerned that the Department of Commerce's recommendations may have unintended consequences for domestic tire manufacturers and the workers and industries they support," USTMA President and CEO Anne Forristall Luke said when the agency released its recommendations.

"High-quality steel is critical for tire production," Luke said. "Domestic steel mills use a production process that is unable to produce the steel necessary to make tires."

In the March 7 letter, the USTMA and its members said steel tariffs would only bring harm to the 56 tire-related manufacturing facilities in 18 states and the 250,000-plus jobs they support.

"Tire cord-quality steel wire rod is produced using basic oxygen furnace technology, which generally is employed only by foreign wire rod suppliers," the letter said.

"Any action that curtails the availability of the supply of tire cord or tire cord-quality steel wire could potentially have a cascading negative impact on U.S. commerce, since the transportation industry and the military depend on a reliable supply of tires to ship goods throughout the country," it said.

"Further, a disruption in tire manufacturing in the U.S. would threaten national security, since the U.S. military relies on the tire industry to provide high-performing and durable tires to aid in national defense," it said.

The AIADA said that since steel and aluminum are so integral to auto manufacturing, the tariffs would only raise new car prices substantially.

"In addition to paying more for their vehicles, American consumers and workers can also expect to bear the brunt of the retaliatory tariffs other countries will almost certainly place on goods manufactured and exported from the United States," the association said.

The Trade Partnership, an international trade and economic consulting firm, has just released a report saying the proposed steel and aluminum tariffs will cost the U.S. some 146,000 jobs, including more than 5,000 in motor vehicles and parts and more than 1,200 in rubber, plastics and chemicals.

"While employment increases in sectors making steel and aluminum, it declines in every other sector of the U.S. economy," the report said. "More than five jobs would be lost for every one gained."

The American Wire Producers Association was one of 15 manufacturing associations that signed a Feb. 12 letter to President Trump, stating that steel and aluminum tariffs would have a harmful effect on the more than 1 million jobs their members represent.

"Our member companies source the majority of their steel requirements from the domestic steel industry, but we also require continuing access to global supply chains," the letter said. "This is necessary as there are many types of steel products that are simply not available from domestic steel mills."

A spokeswoman for Bridgestone Metalpha, Bridgestone's Clarksville, Tenn.-based manufacturer of tire grade-steel wire, said the company was closely monitoring the situation.