Trump makes good on promise to raise tariffs on imported goods
President Donald Trump authorized tariffs of 10 percent on an additional $200 billion worth of Chinese imports on July 10, the latest move by the administration to honor the president's promise to take action against unfavorable trade practices.
The order came on the heels of Trump's July 6 decision to impose tariffs on $34 billion worth of Chinese products, which prompted China to retaliate by placing similar tariffs on $34 billion in U.S. exports to China.
"As a result of China's retaliation and failure to change its practices, the president has ordered USTR to begin the process of imposing tariffs of 10 percent on an additional $200 billion of Chinese imports," Lighthizer said.
The proposed tariffs are spelled out in a list in a Federal Register notice.
During his campaign, Trump pledged to slap tariffs on imports from countries he believed were cheating the United States.
"Any country that devalues their currency in order to take unfair advantage of the United States, and all of its companies who can't compete, will face tariffs and taxes to stop the cheating. And when they see that, they will stop the cheating," Trump said during a campaign rally in Tampa, Fla.
Over the last several months, the president has followed through with this promise.
On March 8, 2018, Trump issued proclamations adjusting imports of steel and aluminum. The proclamations created a 25 percent tariff on imported steel and a 10 percent tariff on imported aluminum, with exemptions for Canada and Mexico. The tariffs took effect March 23.
Trump said the tariffs would bolster protection for domestic metal industries considered critical to national security. Under section 232 of the Trade Expansion Act of 1962, the executive branch has the authority to conduct investigations into the effects of certain imports on national security and adjust those imports as necessary.
In his proclamations, Trump cited a report from the Commerce Department detailing its investigation into the impact on national security of steel and aluminum imports. Commerce Secretary Wilbur Ross recommended tariffs or quotas on imported steel and aluminum, noting that employment in the domestic steel industry decreased by 35 percent during the last two decades, and the aluminum industry lost almost 60 percent of its jobs between 2013 and 2016.
"The actions we are taking today are not a matter of choice; they are a matter of necessity for our security," Mr. Trump said during a signing ceremony at the White House.
Since the March 8 proclamations, Trump has updated or tweaked the steel and aluminum tariffs multiple times with separate proclamations.
The move drew heavy criticism from both Democrats and Republicans, with many politicians and pundits arguing that Trump's "America First" protectionism would put a strain on the United States' relationships with several critical allies. Some questioned the sincerity of Trump's claim that the tariffs are essential to national security, especially after a Twitter attack of Canadian Prime Minister Justin Trudeau in which Trump said the tariffs were "in response to (Trudeau's) 270% on dairy."
Trump's tariffs also triggered retaliation from the affected countries, who responded by implementing tariffs on U.S. goods, including bourbon, farm products and metals. With China, the situation has escalated into a full-scale trade war.
Regardless of what happens next, Trump has stayed true to his campaign promise. We rate this Promise Kept.
C-Span, "Donald Trump Campaign Rally in Tampa, Florida," August 24, 2016
Office of the United States Trade Representative, "Statement By U.S. Trade Representative Robert Lighthizer on Section 301 Action," July 10, 2018
The White House, "Presidential Proclamation on Adjusting Imports of Steel into the United States," March 8, 2018
The White House, "Presidential Proclamation on Adjusting Imports of Aluminum into the United States," March 8, 2018
The White House, "Presidential Proclamation on Adjusting Imports of Steel into the United States," March 22, 2018
The White House, "Presidential Proclamation on Adjusting Imports of Aluminum into the United States," March 22, 2018
The White House, "Presidential Proclamation on Adjusting Imports of Steel into the United States," April 30, 2018
The White House, "Presidential Proclamation on Adjusting Imports of Aluminum into the United States," April 30, 2018
The White House, "Presidential Proclamation on Adjusting Imports of Steel into the United States," May 31, 2018
The White House, "Presidential Proclamation on Adjusting Imports of Aluminum into the United States," May 31, 2018
Commerce.gov, "U.S. Department of Commerce Announces Steel and Aluminum Tariff Exclusion Process," March 18, 2018
Commerce.gov, "Secretary Ross Releases Steel and Aluminum 232 Reports in Coordination with White House," February 16, 2018
NPR, "Trump Formally Orders Tariffs on Steel, Aluminum Imports," March 8, 2018
The Washington Post, "Trump imposes steel and aluminum tariffs on the E.U., Canada and Mexico," May 31, 2018
The New York Times, "Trump's Trade War With China Is Officially Underway," July 5, 2018
Waiting on steel and aluminum tariffs
At a meeting with steel and aluminum industry CEOs, President Donald Trump announced March 1, 2018, that he would impose tariffs of 25 percent on imported steel and 10 percent on imported aluminum.
"You're going to see a lot of good things happen," Trump said. "You will have protection for the first time in a long while, and you're going to regrow your industries."
Trump said he would sign the tariffs into effect the following week.
That has yet to happen.
Press Secretary Sarah Huckabee Sanders told reporters March 5 that "in terms of the specifics of what it looks like, I'm not going to get into that right now because those things are being finalized."
The same day, House Speaker Paul Ryan pushed back against tariffs.
"We are extremely worried about the consequences of a trade war and are urging the White House to not advance with this plan," said Ryan spokeswomen Ashlee Strong in a written statement. "The new tax reform law has boosted the economy and we certainly don't want to jeopardize those gains."
Tweets from Trump hinted that the final rules might exclude Canada and Mexico.
"Tariffs on steel and aluminum will only come off if new and fair NAFTA agreement is signed," Trump tweeted March 5.
Commerce Secretary Wilbur Ross also spoke of flexibility.
"We're not looking for a trade war," Ross said on CNBC March 7. "We're going to have very sensible relations with our allies. We hope and we believe that at the end of the day, there will be a process of working with the other countries that are our friends."
European Commission trade officials have floated a possible list of American goods that might be targeted if Trump makes good on his threat of tariffs. The items include Harley Davidson motorcycles (made in Wisconsin), bourbon (made in Kentucky), orange juice, peanut butter and cranberries.
Resistance to these tariffs is strong. As the controversy unfolded, Gary Cohn, the head of Trump's National Economic Council, announced he would step down in a few weeks.
We will see where this all leads, but for now, we keep the rating at In the Works.
White House, Remarks by President Trump in Listening Session with Representatives from the Steel and Aluminum Industry, March 1, 2018
Reuters, House Speaker Ryan hopes Trump will consider other approaches to steel tariff, March 1, 2018
White House, Remarks by President Trump and Prime Minister Netanyahu of Israel Before Bilateral Meeting, March 5, 2018
White House, Press Briefing by Press Secretary Sarah Sanders, March 5, 2018
National Review, 'We Are Extremely Worried' — Ryan Comes Out Strong against Trump's Trade War, March 5, 2018
Donald Trump tweet, March 5, 2018
The Guardian, Europe threatens tariffs on US peanut butter and orange juice as trade war looms, March 7, 2018
CNBC, Commerce Secretary Wilbur Ross: 'We're not trying to blow up the world' with tariffs, March 7, 2018
Investigations into trade practices could mean more tariffs
During his presidential campaign, Donald Trump called for tariffs on imports from countries that he deemed untrustworthy.
"I'm going to instruct my treasury secretary to label China a currency manipulator, the greatest in the world," Trump said at a campaign rally in Tampa. "Any country that devalues their currency in order to take unfair advantage of the United States, and all of its companies who can't compete, will face tariffs and taxes to stop the cheating. And when they see that, they will stop the cheating."
In other public appearances, Trump floated the idea of slapping a 45 percent tariff on Chinese exports to the United States.
The Treasury Department did not label China as a currency manipulator in an Oct. 17 report, but the political pressure on Trump to meet his campaign promise remains. So far, the White House administration's strategy has focused on increasing enforcement of fair trade practices.
Of note, the U.S. Commerce Department on Nov. 28 "self-initiated" an investigation into whether imports of aluminum sheets from China were being sold at unfairly low prices or were subsidized. If the investigation finds that either practice occurred, the Commerce Department will instruct U.S. Customs and Border Protection to begin collecting dues from U.S. companies importing Chinese-made aluminum sheets.
U.S. Commerce Secretary Wilbur Ross said the investigation is part of a larger initiative to increase enforcement.
"President Trump made it clear from day one that unfair trade practices will not be tolerated under this administration, and today we take one more step in fulfilling that promise," Ross said in the investigation's announcement. "We are self-initiating the first trade case in over a quarter century, showing once again that we stand in constant vigilance in support of free, fair and reciprocal trade."
Most Commerce Department trade cases are initiated after an industry group or company files a petition notifying the department of suspicious trade practices. It is unusual, but not unprecedented, for the Commerce Department to initiate investigations on its own.
The Commerce Department said it has increased the number of antidumping and countervailing duty investigations by 65 percent this year compared with last year.
Dan Ikenson, the director of the Cato Institute's Herbert A. Stiefel Center for Trade Policy Studies, said most of the Commerce Department's enforcement has little to do with the White House administration, and he doesn't think the increase in investigations is out of the ordinary. He said he thought the administration would take a more aggressive approach to imposing tariffs, given Trump's rhetoric during the campaign.
Still, it's clear that Trump is looking for avenues to implement tariffs. He asked the Commerce Department in April to investigate the effects of aluminum and steel imports on the needs of U.S. military defense. The results of the investigations could allow the government to raise broad tariffs on those industries, if the trade practices in those industries are shown to hurt national security.
Since the Commerce Department has taken a more aggressive stance on enforcement, there's a chance we could see more tariffs in the future. We'll rate this In the Works.
U.S. Commerce Department, "U.S. Department of Commerce Self-Initiates Historic Antidumping and Countervailing Duty Investigations on Common Alloy Aluminum Sheet From China," Nov. 28, 2017
U.S. Treasury Department, "Foreign Exchange Policies of Major Trading Partners of the United States," Oct. 17, 2017
The White House, "Aluminum Imports and Threats to National Security," April 27, 2017
U.S. Commerce Department, "Presidential Memorandum Prioritizes Commerce Steel Investigation," April 20, 2017
The New York Times, "Donald Trump Says He Favors Big Tariffs on Chinese Exports," Jan. 7, 2016
C-SPAN, Donald Trump campaign rally in Tampa, Aug. 24, 2017
Phone interview, Dan Ikenson, director of the Cato institute's Herbert A. Stiefel Center for Trade Policy Studies, Dec. 1, 2017