Yesterday morning, my colleague Dan Ikenson warned of a possible announcment by President Trump related to tariffs on steel and aluminum, to be imposed on (extremely flimsy) “national security” grounds. That announcement did come (as Trump was speaking to steel and aluminum company executives), and everyone is still trying to sort out what it means. This is from the Washington Post:
Speaking at the White House, the president said he has decided on tariffs of 25 percent for foreign-made steel and 10 percent for aluminum.
“We’ll be imposing tariffs on steel imports and tariffs on aluminum imports,” the president said. “…You will have protection for the first time in a long while, and you’re going to regrow your industries.”
It certainly feels like Trump is finally going to make good on his frequent threats to impose tariffs (putting aside the usual “trade remedy” kind, which all presidents impose). But if you are looking for signs of hope, note that nothing has actually been signed yet. All Trump did was say that he would impose tariffs. And recall this sequence of events from last year:
– In late January, Trump signed a Presidential memorandum on “Construction of American Pipelines,” and said: “We are – and I am – very insistent that if we’re going to build pipelines in the United States, the pipes should be made in the United States. … From now on, we’re gonna start making pipeline in the United States. We build it in the United States; we build the pipelines; we wanna build the pipe. Gonna put a lot of workers, a lot of steel workers, back to work. Okay. We will build our own pipeline. We will build our own pipes.”
– Then in February, he said this: “We have also taken steps to begin construction of the Keystone Pipeline and Dakota Access Pipelines. Thousands and thousands of jobs, and put new buy American measures in place to require American steel for American pipelines. In other words, they build a pipeline in this country, and we use the powers of government to make that pipeline happen, we want them to use American steel. And they are willing to do that, but nobody ever asked before I came along. Even this order was drawn and they didn’t say that.”
– By early March, however, the White House quietly announced that the Keystone XL pipeline would not be subject to a requirement to use American steel.
Is it possible that a similar pullback will happen with the steel/aluminum tariffs? U.S. trading partners, some members of Congress, and U.S. companies that use steel/aluminum will work hard to convince the White House not to go forward. (Reports like this one may help: “Electrolux puts $250 million U.S. investment on hold over Trump tariff hike.”)