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Amid resistance, Trump backs away from controversial trade plan

July 26, 2017

President Trump said Tuesday that his administration is delaying a long-awaited verdict on whether to restrict imports of foreign steel, again punting on a decision that has divided U.S. industries and his own administration, as well as strained ties with some of the country's closest allies and trading partners.

 | July 25, 2017 |The Washington Post]

“[W]e’re waiting till we get everything finished up between health care and taxes and maybe even infrastructure,” the president told the Wall Street Journal.

Trump's remarks follow a month-long period in which stakeholders expected an imminent decision. Administration officials had said they would deliver a report by the end of June determining whether steel imports have compromised U.S. national security by crippling the domestic steel industry.

But political and practical obstacles have delayed the decision. Foreign allies that export steel to the United States and U.S. companies that would see their costs rise because of the measure have opposed the plan, as well as some administration officials who fear triggering a trade war.

Gathering the data necessary for the decision also appears to be more difficult than the administration foresaw. Steel companies were still getting requests for information from the Commerce Department as recently as last week, said a steel industry official who declined to be named to discuss private conversations.

Trump told the Journal that the administration would be addressing steel dumping, which he described as “a very unfair situation.” But he added that “we don’t want to do it at this moment.”

The decision is being closely watched as an indicator of whether Trump will deliver on his trade promises. The tariffs or quotas the administration was considering would have been the president’s first major move to fulfill the protectionist, America-first trade policy that was one of the pillars of his candidacy.

For months, the administration kept industry guessing about whether these ideas were mostly campaign rhetoric or the basis for an ambitious repositioning of U.S. trade policy.

“President Trump made a promise to America’s steelworkers, and there is certainly going to be disappointment with this delay,” said Scott Paul, president of the Alliance for American Manufacturing, which represents steelworkers and steel companies. “We fully expect the administration to be true to its word and to protect our national security and stand up for America’s steelworkers.”

Some who had lobbied against the tariffs greeted the president’s more measured approach. But John Foster, a steel trader who has opposed the tariffs, said postponing the choice “leaves a cloud of uncertainty that is almost as paralyzing as a bad decision.” He said that imports of steel have fallen off because traders fear being hit with a retroactive tariff.

“Either do something, or do nothing and say it’s over, which would be the right decision in my humble opinion,” he said. “Until they and traders and mills know what the rules of the game are, we can’t play the game.”

Among the strongest voices against the measure were U.S. farmers, who feared retaliation from foreign countries. Agricultural products are among America's largest exports to the European Union and other major U.S. steel trading partners, who have said they would retaliate against trade measures they see as unjust.

On July 11, 18 agricultural groups, including the National Pork Producers Council, sent a letter to Commerce Secretary Wilbur Ross arguing that restrictions on steel and aluminum could result in other countries retaliating by restricting their products, an outcome that they said would be “disastrous for the global trading system and for U.S. agriculture in particular.”

Other domestic industries that use steel in their products spoke against the measure, arguing that tariffs would increase their costs and cut into their profits. The American Automotive Policy Council, which represents companies including Ford and General Motors, wrote in testimony in late May that the costs to the auto industry would outweigh the benefits to the steel industry.

Officials from the Treasury Department, the Defense Department and the National Economic Council, including its influential director Gary Cohn, also pushed against the measure.

Under the law, the administration has 270 days to complete the report — giving it until January 2018. But both Trump and Ross had pushed for a much earlier result.

On multiple occasions, Trump expressed his support for restricting steel imports.

“Wait till you see what I’m going to do for steel and your steel companies,” he said in a speech in Cincinnati on June 7. “We’re going to stop the dumping and stop all of these wonderful other countries from coming in and killing our companies and our workers. We’ll be seeing that very soon. The steel folks are going to be very happy.”


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