President Donald Trump declared that he won’t retreat from his plan to impose tariffs on steel and aluminum imports after House Speaker Paul Ryan rejected the plan, saying the U.S. economy could suffer.
Asked Monday about the remarks from Ryan’s office, Trump was undeterred. “No, we’re not backing down,” he told reporters at the White House, less than an hour after the speaker’s office aired his concerns.
Ryan spokeswoman AshLee Strong said in a statement, “We are extremely worried about the consequences of a trade war and are urging the White House to not advance with this plan. The new tax reform law has boosted the economy and we certainly don’t want to jeopardize those gains.”
The spokeswoman’s statement marked an unusual public break between Ryan and the president. Ryan of Wisconsin has supported Trump even in some of the most controversial moments of his presidency.
While Trump has regularly railed about China’s trade practices, the impact of the tariffs of 25 per cent on imported steel and 10 per cent on aluminum may be most felt by U.S. allies, the European Union, Canada and Mexico.
Harley-Davidson Inc., the motorcycle maker based in Ryan’s home state, is facing threats of retaliation from Europe over Trump’s plans for steel and aluminum tariffs. European Commission President Jean-Claude Juncker said the EU may target imports of the company’s motorcycles as well as Kentucky bourbon and Levi Strauss jeans. Harley already is being hit by a deepening slump in U.S. motorcycle demand, which has spurred job cuts and a plant closure at the Milwaukee-based company.
House Republicans tasked with tax and trade policy are drafting a letter addressed to Trump “expressing concerns about ‘the prospect of broad, global tariffs on aluminum and steel imports,”‘ according to Lauren Aronson, a spokeswoman for the Ways and Means Committee. Chairman Kevin Brady of Texas has urged more targeted tariffs on unfairly traded products, rather than broad measures that could hurt economic growth, Aronson said.
Senator Mike Lee, a Utah Republican, tweeted about his bill to limit the president’s ability to impose tariffs without approval from Congress. “In a government system with checks and balances, the President should not have the power to unilaterally levy or alter tariffs,” he wrote.
Trade is one of the most glaring policy disagreements between Trump and Republican lawmakers. Conservative groups, including the Club for Growth, a pro-free market organization, have cautioned that tariffs would hurt the economy and Republican chances to hold on to both chambers of Congress in this year’s midterm elections.
“The idea of imposing steel or aluminum tariffs of any kind is an affront to economic freedom,” said Club for Growth President David McIntosh. “Tariffs will also harm the pro-growth effects of the tax cuts, stall the economy, incite a trade war, and help hand the election to the Democrats.”
Senate Finance Chairman Orrin Hatch, a Utah Republican whose committee oversees trade matters, said last week, “Tariffs on steel and aluminum are a tax hike the American people don’t need and can’t afford.” He urged Trump to “carefully consider all of the implications of raising the cost of steel and aluminum on American manufacturers and consumers.”
Trump has used the threat of the tariffs as a negotiating point in talks taking place with Mexico and Canada on renegotiating the North American Free Trade Agreement.
Until recently, the U.S. probe into the national security risks of steel and aluminum had been considered separate from the NAFTA discussions. But Trump revived his complaints about NAFTA being a “bad deal” for the U.S. in a tweet on Monday and linked the talks underway in Mexico to the tariffs.
“Tariffs on Steel and Aluminum will only come off if new & fair NAFTA agreement is signed,” Trump tweeted.
Canada, the biggest supplier of steel and aluminum to the U.S., and Mexico, the No. 4 source of steel, have asked to be excluded from the tariffs.
The president’s decision caught the NAFTA negotiators off guard, and his intervention may complicate a process that had already been yielding little progress on the most contentious issues.
“I applaud the president for targeting unfairly traded steel and aluminum,” Brady told reporters in Mexico City on Sunday. “But blanket tariffs that also sweep up fairly traded steel and aluminum, especially with trading partners like Canada and Mexico — they should be excluded.”