Adviser: No exceptions on tariffs

Washington PostWASHINGTON — The Trump administration sent mixed signals about its new aluminum and steel tariffs Sunday, saying that any exceptions for allies are unlikely but also leaving room for an unpredictable president to change his mind.

White House trade adviser Peter Navarro appeared to draw a firm line against case-by-case exemptions as he defended President Donald Trump's sudden imposition of trade premiums, which are likely to hit Canada and Europe hardest.

"That's not his decision," Navarro said when asked about the possibility of exemptions. "As soon as he starts exempting countries, he has to raise the tariff on everybody else," Navarro said when asked about Canada and the European Union. "As soon as he exempts one country, his phone starts ringing with the heads of state of other countries."

In a separate interview on CNN, Navarro suggested that Trump could indeed grant exceptions if doing so would serve U.S. interests. And Commerce Secretary Wilbur Ross said that although he does not expect Trump to change his mind, he does not rule it out.

Republican lawmakers, including Sen. Lindsey Graham of South Carolina, called the tariff decision wrongheaded and misdirected. Graham said Trump isn't even punishing China, the country that might deserve it.

"Please reconsider," Graham said in a direct appeal to Trump on CBS's Face the Nation.

The decision would hurt automobile manufacturing in his state while "letting China off the hook," Graham said.

"You're punishing the American taxpayers and you are making a huge mistake," the senator said.

British Prime Minister Theresa May was among the first to raise concerns directly with Trump, asking that he reconsider a policy opposed by many in Trump's own party and the White House, and that close allies say will start a global trade war.

May's office said she spoke with the president on Sunday morning and "raised our deep concern at the president's forthcoming announcement on steel and aluminum tariffs, noting that multilateral action was the only way to resolve the problem of global overcapacity in all parties' interests."

The White House did not immediately release its own statement on the call.

In several interviews, Navarro asserted that the cost to U.S. consumers from any retaliatory actions would be a penny or two on a "six-pack of beer or Coke" and that Americans would be willing to pay a small penalty for the security of preserving domestic aluminum and steel production. He was challenged by interviewers on both his math and his premise.

Trump blurted out the trade tariff decision, including the percentage tariffs on both kinds of imports, during a White House meeting last week. A formal announcement is expected by the end of this week, administration officials said Sunday.

The biggest burden of Trump's new tariffs — 25 percent on steel and 10 percent on aluminum —would be borne by Canada, the largest U.S. trading partner. Canada is the largest exporter of steel and aluminum to the United States, supplying $7.2 billion worth of aluminum and $4.3 billion of steel last year. Overall, the United States runs a trade surplus with Canada, which buys $48 billion worth of U.S. automobiles and $40 billion of machinery, in addition to agricultural products.

Follow trends affecting the local economy

Subscribe to our free Business by the Bay newsletter

We’ll break down the latest business and consumer news and insights you need to know every Wednesday.

Loading...

You’re all signed up!

Want more of our free, weekly newsletters in your inbox? Let’s get started.

Explore all your options

The steel and aluminum tariffs would also hit Britain, Germany, South Korea, Turkey and Japan, countries with which the United States has close national security ties.

The E.U. has threatened retaliatory tariffs on U.S. manufactured goods, including motorcycles and blue jeans, and the worry is that the tit-for-tat will harm American businesses that export, while raising costs for businesses that rely on a global supply chain.

Trump is facing criticism from members of his own party over his trade plan, including from some of the top economists who advised his campaign. Navarro brushed off the criticism, arguing that Trump was alone in the GOP on trade during the 2016 presidential campaign — and won anyway.

"All 16 of those candidates didn't agree with his policies, either," Navarro said on CNN. "They're dead wrong on the economics — there's no downstream effect here. There's only a president .?.?. saving and defending our aluminum and steel industries."

Ross, appearing on ABC's This Week, said he expects the formal rollout of the tariffs this week.

"I have not heard him describe particular exemptions," Ross said.

As for speculation that White House economic adviser Gary Cohn might quit over the new policy, with which he apparently disagrees, Ross said Trump likes to hear opposing views before he makes decisions.

"Gary Cohn, as far as I know, is certainly not going to walk out," Ross said on ABC.

Navarro cast the decision as a national security imperative to protect vital manufacturing industries at home and said Trump is acting to fulfill a campaign promise to U.S. workers.

Economists warn that any benefit in terms of jobs could be far outweighed by increased steel costs for U.S. automobiles, wind turbines, shale oil and gas drilling rigs, and more.

In Twitter posts on Saturday, Trump vowed to strike back at European leaders who said they would retaliate.

"If the E.U. wants to further increase their already massive tariffs and barriers on U.S. companies doing business there, we will simply apply a Tax on their Cars which freely pour into the U.S. They make it impossible for our cars (and more) to sell there. Big trade imbalance!" he tweeted.

The Wall Street Journal has called the steel and aluminum tariffs the single-worst policy decision of Trump's young presidency.

Trump, however, got a boost Sunday from Sen. Joe Manchin III, D-W.Va., who said on CNN that the president's tariff plan was "welcome."

"In West Virginia, we've lost thousands and thousands of jobs," Manchin said. "When you look at who produces the steel in the world, 50 percent of the steel comes from China .?.?. connect the dots."

"Even if they're saying it might not come directly," he said. "The president has put this on the table, I welcome it. Let's look at it and see what they roll out."