Trump’s Passion for Tariffs Faces Stiff Headwinds From His Party


President Donald Trump’s zeal for new a round of tariffs is running into cold, hard economic and political reality: lawmakers from his own party who think it’s a bad idea.

Twice this week Trump has raised the idea of trade penalties he calls a “reciprocal tax,” only to have White House officials insist there’s no plan in the works for such an action. During a televised meeting at the White House on Tuesday, Republican lawmakers told Trump the new tariffs he’s mulling for aluminum and steel imports would likely do more harm than good, costing greater jobs among automakers and manufacturers than they protect.

Penalties raising the cost of aluminum and steel imports alone could reverberate through the economy, hiking up prices for everything from aircraft to electrical wiring and beer cans.

The prospect of a trade war with other major economies could further rattle financial markets already unsteady over concerns about inflation and interest-rate increases. Trump has had to balance those realities with his own protectionist campaign rhetoric and calls from his political base for action that matches it.

“We have countries that are taking advantage of us. They’re charging us massive tariffs for us to sell our product into those countries. And when they sell to us, zero,” Trump said during the meeting in the Cabinet room. “We’re like the stupid people, and I don’t like to have that anymore.”

Special Election Looms

Trump has been making similar comments since his days on the campaign trail and throughout much of his time in office, frequently singling out countries such as China, South Korea, Mexico and Canada. 

He may face fresh political pressure to act as a special election approaches in a Pittsburgh-area congressional district where Trump’s protectionist, pro-manufacturing messaging from the campaign trail boosted him to victory in Pennsylvania in 2016.

But his talk has been bolder than his actions so far. He promised during the campaign to declare China a currency manipulator on “Day One,” but never has. He threatened to impose tariffs on companies that send jobs overseas and then ship their products back into country, but he’s not done so. He flirted last April with announcing a U.S. withdrawal from Nafta, and then backed down.

Cautious Lawmakers

At least seven Republican lawmakers at the White House meeting Tuesday urged Trump to be cautious about taking any action that could set off a trade war with China or other countries. Several warned that Trump’s proposals would raise prices for manufacturers dependent on those materials — especially car companies — and for consumers.

“I think we do need to be careful here that we don’t start a reciprocal battle on tariffs,” Senator Roy Blunt, a Missouri Republican told Trump.

At the same time, some Democrats from states Trump carried — and the more populist voters who propelled him into office — are pushing for actions that resemble the president’s trade threats.

Trump instructed the Commerce Department last year to probe whether imports of steel and aluminum represent a threat to U.S. national security, under the seldom-used Section 232 of a 1960s trade act. Trump, who has until mid-April to decide on any restrictions, said on Tuesday that he’s considering quotas and tariffs, among other options. The investigations are seen to primarily target China, which the U.S. blames for creating excess capacity and dragging down global prices.

One hurdle the administration faces in its 232 deliberation is the chasm between steel and aluminum producers versus the industries that make products from the raw metal. Trump’s push to expedite the investigations last year was met with opposition by aluminum and steel users that said a larger number of jobs would be lost if the U.S. placed tariffs on imports.

The argument is that parts producers of everything from automobiles to aircraft to wiring in homes and office buildings would pay a higher price for metal if they can’t procure material from foreign sources that could cost less. By putting tariffs on imports, it effectively raises the price of imports so that domestic steel and aluminum producers aren’t being undercut.

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