In the category of “we can’t make this stuff up,” there reportedly has been in the past 24 hours an all-out war within the Trump administration over any tariffs to be implemented as a result of the Section 232 investigations into steel and aluminum imports. On February 16, the Department of Commerce publicly released reports on the national security impact of U.S. imports of steel mill products and of wrought and unwrought aluminum, finding that these imports threaten to impair the national security and recommending a range of remedy options, including tariffs and quotas. In the weeks since, U.S. industry and members of Congress have weighed in on the potential impact of these prospective tariffs and quotas on the U.S. economy, taxpayers and other industries reliant upon steel and aluminum imports, and the potential negative impact of tariffs and quotas on key U.S. allies.
A press announcement was initially planned for today, March 1, to announce the president’s decision, then it was postponed, then it was ostensibly cancelled. The scheduling problems appeared to be related to reports that National Economic Council Director Gary Cohn and White House trade adviser Peter Navarro were seeking vastly different remedies. Cohn reportedly wanted a more targeted approach to applying any tariffs, while Navarro was pushing for global tariffs at rates higher than recommended in Commerce’s reports. Chief of Staff John Kelly, Defense Secretary James Mattis and National Security Adviser H.R. McMaster had also sought a more nuanced response. When the White House announced instead that a meeting today with steel and aluminum industry executives would take place, it was expected to be nothing more than a “listening session” for the president.
And, it was … right up until the end of the session. After receiving comments from industry executives and repeatedly mentioning bad trade deals that have destroyed U.S. companies, the president said, “We’re going to take care of the situation, okay? So steel and aluminum will see a lot of good things happen. We’re going to have new jobs popping up. We’re going to have much more vibrant companies.” And then, in response to a question from the White House press pool, the president announced – likely to the surprise of his staff and everyone in the room – that he intended to implement tariffs for an unlimited time period of 25 percent on steel imports and 10 percent on aluminum imports, stating that “it’s [the policy is] being written now.”
A transcript of the “listening session” is available here. By the end of the trading day, the Dow Jones Industrial Average had fallen almost 2 percent; however, U.S. steel and aluminum companies saw gains. China and the European Union have already announced they will retaliate, either through their own measures or through remedies obtained in the WTO dispute settlement process. Stay tuned!