The Fix | Analysis
March 8, 2018 at 5:31 PM
President Trump's week of tariff uncertainty was so chaotic that even the top White House staffer who won the internal debate wound up looking a little foolish.
Trump finally announced Thursday that he would impose a 25 percent tariff on steel imports and a 10 percent tariff on aluminum imports. Those are the same numbers he shared last week but about which there had been considerable uncertainty. Yet there is a catch: He will exempt Canada and Mexico and potentially other countries from the tariffs, on a case-by-case basis.
Which is exactly what his top trade adviser, Peter Navarro, had suggested over the weekend would not happen — or at least was a bad idea. In interviews Sunday, Navarro repeatedly made the case against exemptions.
“If you exempt Canada, then you have to put big tariffs on everybody else,” Navarro told CNN.
He repeatedly argued that exemptions would throw the whole thing out of whack, saying that “as soon as you exempt one country, then you have to exempt another country.” He told Fox News: “As soon as he starts exempting countries, he has to raise the tariff on everybody else” and “As soon as he exempts one country, his phone starts ringing with the heads of state of other countries.”
Well, it turns out that this is exactly what Trump decided to do. According to The Washington Post's main story on the tariff announcement, “Other countries with a 'security relationship' to the United States may seek exemptions by opening talks with the administration on 'alternative ways' to address the threats the administration alleges their products pose to national security.”
Here's the thing, though: The indefinite exemptions for Canada and Mexico already cover 25 percent of the steel imported to the United States. Navarro said that merely exempting Canada would force the other tariffs to have to be increased; what if Trump adds Japan and/or South Korea to the list?
Doing so would also seem to at least partly defeat the purpose of the tariffs. The presidency has no inherent authority to adjust tariffs, but Congress long ago began allowing presidents latitude on trade that affects national security — which is how Trump is justifying the new tariffs. But if the tariffs are meant to bolster the U.S. steel and aluminum industries in the name of national security, providing exemptions would seem to undermine that goal.
If the countries providing 25, 30 or even 40 percent of the steel coming into the United States — it would be 40 percent if Japan and South Korea were also exempted — are not subject to the new tariffs, that would not seem to be much of a boon to U.S. steel manufacturers. And that is especially if it just means more importation from the exempted countries.
And this is not over yet. Trump apparently will be negotiating future possible exemptions, meaning we could essentially see a series of miniature trade deals with individual countries, each affecting the steel and aluminum industries in new ways.
Which is what Navarro argued would be a bad idea just four days ago.